Recently, the Parliament passed a new law designed to grant a temporary crypto tax exemption for individuals earning gains from cryptocurrency transactions. This measure, however, hit a significant roadblock when the President (Klaus Iohannis) sent the text of the law to the Constitutional Court, on 22 December 2024. Of course, many potential investors and crypto enthusiasts are watching closely to see whether the measure will ultimately come into effect.
The proposed legislative package – here referred to as the “crypto tax exemption”—aims to suspend the obligation for individuals to pay income tax on profits gained from the transfer or sale of any crypto assets. According to the text that left the Parliament before being sent to the Constitutional Court, this income tax suspension would last until July 31, 2025.
So, essentially, it would give cryptocurrency investors a window of tax relief where they could sell their holdings (for instance, Bitcoin, Ethereum, or any other altcoin) and then transfer the money into their Romanian bank accounts. They would be able to do this without incurring a 10% income tax liability, which normally applies to gains from cryptocurrency transactions.
Currently, under the Romanian law, earnings from crypto sales are treated as “income from other sources” for tax purposes. The individual is required to calculate the gains (the difference between the selling price and the purchase price of the digital assets) and then pay a 10% income tax. Depending on the total annual income, some investors may also have to pay the health insurance contribution, if their overall annual earnings reach certain thresholds.
It is important to note that the health insurance contribution is due cumulatively on several types of income, if during a tax year they aggregate to a level that exceeds a certain minimum threshold. In addition to crypto gains, these types of income are: dividends, rental income, capital gains, interest income, etc.
So, the new law, focusing specifically on income tax obligations, would temporarily exempt individuals from the 10% income tax rate currently applicable to cryptocurrency gains, should the measure pass and be published in the Official Gazette.
As stated in the proposed law, the crypto tax exemption would apply immediately upon the law’s promulgation and publication, covering transactions up to and including July 31, 2025. This means that, if someone decides to sell Bitcoin in 2025, for example, and then transfer the earnings to their Romanian bank account, they would be able to benefit of this exemption – provided that the new law indeed goes into effect.
This is a significant policy shift, which signals an attempt by the Romanian authorities to map and understand the true size of the Romanian crypto market. By offering a period of zero income tax liability, the government aims to encourage investors to operate openly through Romanian bank accounts instead of seeking solutions abroad or keeping their crypto earnings unaccounted for within digital wallets on various crypto exchanges.
The President (Klaus Iohannis) sent the draft law to the Constitutional Court for a review of its constitutionality. It’s important to note that the challenge the President raised does not directly concern the crypto tax exemption itself. Instead, the President flagged possible constitutional irregularities in other parts of the legislative package.
Nevertheless, this means that, even if the segment about crypto tax exemption is perfectly fine from a constitutional standpoint, if any section of the same law is found unconstitutional, the entire law can be sent back for reconsideration or may be invalidated immediately. In that case, Parliament might have to make revisions, repass the legislation, and then resend it back to the President for final approval. Only after these steps are cleared can the law be published and enter into force. Until that happens, there is a waiting game, leaving crypto enthusiasts uncertain about any potential tax exemption they may benefit from.
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