We provide below answers to the most frequent questions about Bitcoin tax regime in Romania. The answers are drafted by the best tax consultants, specialized in the taxation of individuals and cryptocurrencies.
They offer clarifications on the most commonly asked questions by our clients, such as: how must the taxable income from cryptocurrency transactions be determined?, must the entire income received be declared or just the profit?, what taxes are due on this type of income?, what is the applicable reporting tax obligation?, what do we do with losses from crypto transactions?, etc.
Such as any other fiat currency, Bitcoin can be bought and sold in cryptocurrency markets. Given that the value of Bitcoin fluctuates constantly in the market (Bitcoin market price can fluctuate significantly in just a few minutes), this makes it possible to make gains from these types of buy-and-sell transactions.
Thus, for investors it may seem very promising to invest in Bitcoin, even more than in transactions with shares or other types of assets, because they can generate significant short-term gains.
Historically speaking, before January 2019, the Romanian tax legislation did not regulate in any way the Bitcoin tax regime in Romania, or for income from profits made from the trading of any type of virtual currencies.
However, the fact that the taxation of cryptocurrencies in Romania was not specifically mentioned in the tax legislation does not mean that such gains could not be taxed by the authorities. The Romanian Tax Code (Law no. 227/2015) did not include them in any specifically defined category of income, but at the same time did not exclude such income from the general rule of taxation.
Therefore, the gains that an individual derived from buying and selling of Bitcoins or any other type of cryptocurrency (Ethereum, Ripple, Stellar, Litecoin, etc.) were considered taxable income and taxed as income from other sources even before January 2019.
Starting with January 20, 2019 however, based on the Ordinance no. 25/2018 which amended the Romanian Tax Code, the income derived from the transfer of digital currencies was for the first time specifically regulated from a tax perspective. More exactly, under Article 114, paragraph (2) of the Romanian Tax Code, the authorities introduced letter m), applying starting with the income tax due for the revenues generated in 2019.
Thus, under the newly introduced letter, starting with the revenues related to year 2019, it was clarified that the income from the transfer of digital currencies derived by individuals must be taxed as “income from other sources”.
Individuals who generate gains from Bitcoin transactions or any other digital currencies are required to pay 10% income tax in Romania.
As per the Romanian tax legislation in force, the taxable income is determined as the difference between the selling price of the currency and the purchase price, also deducting any transaction related costs.
In addition, the following tax exceptions apply:
Otherwise, all gains derived during the calendar year are taxed with 10% income tax.
Only the profits generated from the trading of digital currencies must be declared, and not the total revenue cashed-in. As explained above, the taxable gain must be calculated as the difference between the selling price (income cashed-in) and the purchase cost, deducting also the transaction related costs.
Given that the total income cashed-in also includes the amounts originally invested by the taxpayer, only the profits earned must be declared for taxation.
For example, if a person invests 10,000 Lei in Bitcoins and subsequently sells them for 12,000 Lei, the annual taxable income to be declared is determined as follows: 12,000 – 10,000 = 2,000 Lei.
As it is classified under the category of income from other sources, the only additional tax (apart from the income tax) that is due is the health insurance contribution (CASS).
However, CASS is only due if the annual taxable income that an individual generates from activities other than employment reaches a certain threshold. More exactly, if the total annual taxable income generated from Bitcoin transactions, determined according to the above rule, or cumulated with income other than salary (such as income from self-employment, investment, or rent) exceeds 6 minimum gross wages per economy, then the social health insurance contribution (CASS) is also due.
For the year 2023, this threshold is calculated at 3,000 lei x 6, which equals 18,000 lei per year. If the annual taxable income reaches this level, then the taxpayer also owes the Health Insurance Contribution (CASS). The contribution is calculated at 10% of the established taxable base, depending on the level of the annual income realized, at one of the following 3 thresholds:
More precisely, the CASS due for the year 2023 will be capped at 10% of 18,000 Lei (i.e., 1,800 lei), if the annual income for which the contribution is due is at least 18,000 lei but up to 36,000 lei. If the annual income reaches the level of 36,000 lei, but is less than 72,000 lei, then the due contribution will be calculated as 10% of 36,000 lei (i.e., 3,600 lei).
The maximum value of CASS due for the year 2023 is 10% of 72,000 lei, when the annual income for which the contribution is due reaches or exceeds the maximum threshold of 72,000 lei.
Yes, even if you already pay health insurance contribution (CASS) for your salary income, if the income from virtual currency transactions (alone or cumulated with income other than salary) reaches the minimum threshold described above, you will still have the obligation to declare and pay CASS for this income as well.
The amount of CASS due must be calculated as described above.
This obligation is expressly established in the Romanian Tax Code, without any other exception in force for year 2023. Therefore, CASS on cryptocurrency transaction gains is due regardless of whether you also have the status of employee or not.
Individuals generating gains from cryptocurrency transactions must report this income to the Romanian tax authorities by submitting the annual tax return (“Declarația unică”). Thus, all individuals are required to declare the earnings they derive after the end of each year.
More precisely, the official deadline for submitting the annual tax return is May 25 of the year following the one during which the income is generated (for 2023, the tax reporting deadline is 25 May 2024). The reporting deadline may be extended by the authorities only in special circumstances.
The annual tax return can be submitted to Romanian tax authorities (ANAF) only in electronic format (online submission). The submission in electronic format can be done through the Virtual Private Space (on ANAF’s website), as well as through the online portal e-guvernare.ro. The submission through the e-guvernare.ro website can be done only by electronic signature (based on a qualified digital certificate).
If you need assistance with the preparation and submission of the annual tax return in Romania, you can find details on our assistance here: Romanian annual tax return assistance.
As explained above, if your taxable income from cryptocurrency transactions (determined according to the above explanations) generated during a tax year (calendar year) does not exceed the non-taxable ceiling of 600 Lei per year, then any gains below the level of 200 Lei per each transaction are tax exempt. The difference exceeding threshold of 200 lei per transaction is subject to taxation.
As per the legislation regulating Bitcoin tax regime in Romania, losses from crypto transactions cannot be compensated with gains generated during same ta year. If at the end of a tax year you are in a loss position, the loss cannot be carried forward to the next tax year.
Unlike the carryover of losses that the Romanian Tax Code allows in the case of security trading, this is not allowed in the case of virtual currency trading.
As foreigner living in Romania for more than 183 days within a 12 month consecutive period, you have the obligation to undergo the tax residency assessment procedure with the Romanian tax authorities. In practice, this means that the authorities will establish if you are deemed a Romanian tax resident or non-resident. For more details on the Romanian tax residence and the tax residence assessment procedure, please read our articles here: Romanian tax residency explained in details; Foreign nationals in Romania not complying with tax residency assessment subject to fine.
If the Romanian authorities deem you a Romanian tax resident, then you will have the obligation to report for tax purposes in Romania any type of income, including income from selling crypto, or any Bitcoin transactions.
As general rule, a Romanian tax resident (irrespective of his/her nationality) has the obligation to report to Romanian tax authorities any taxable income that one generates, from any sources (Romanian sources and foreign sources).
For this answer we will assume that you are Romanian tax resident, and that the income from Bitcoin transactions you generate is taxable in a country that has a double tax treaty (hereinafter “DTT”) in place with Romania.
If your income is already taxed in the other country, for the application of the avoidance of double taxation you will have to observe the specific article provisions in the DTT (on avoidance of double taxation). Generally, these provisions are established under article 23 or article 24 of the applicable DTT.
As general rule, when income is taxed in the source country, the DTT provides for deduction of the amount of tax paid in that country from the income tax due in Romania (as the country of tax residence). More precisely, this means that the amount of income tax due in Romania will be reduced with the amount of tax due in the source country. If applicable, the deduction can be actually applied in the Romanian annual tax return, as part of the annual tax reporting process.
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