Crypto Taxes in Romania: An In-Depth Guide
Crypto taxes in Romania are straightforward –
All income or profit made from crypto is subject to income tax rates of Romania.
But to understand how crypto taxes work in Romania, you need to know how crypto is treated from a tax perspective. In this guide, we’ll discuss the crypto taxation laws, different taxable events and how to report your taxes.
How Does the National Agency for Fiscal Administration (ANAF) View Cryptocurrency?
The legal status of cryptocurrency in Romania is still vague and unclear. However, we do know that the National Agency for Fiscal Administration (ANAF) doesn’t consider it a legal tender.
For now, as per the Romanian tax laws, any income or profit made from crypto falls under income from alternative sources.
How is Crypto Taxed in Romania?
As we mentioned, any income or profit made from crypto falls under income from alternative sources, and income from alternative sources is subject to the same income tax rules as any other income in Romania.
So, whether you sell crypto and realize a profit or receive crypto as payment for your products and services, you’ll be taxed under a flat 10% income tax rate.
Additionally, you’ll pay flat 10% social security contributions on top of your personal income taxes if your total income from an alternative source (crypto) exceeds 12x the gross national minimum wage (30,600 lei in 2022)
But of course, you can also offset your crypto losses against gains and carry forward your losses for up to 7 years.
There are also some tax breaks for Romanian taxpayers – you’re exempted from paying income taxes if you make less than 200 lei in a crypto transaction (only if your total crypto gains in a financial year don’t exceed 600 lei).
How to Calculate Crypto Taxes in Romania
Calculating crypto taxes in Romania is easy – just subtract the cost basis or acquisition cost from the selling price to calculate the profit.
Cost Basis – Selling Price = Capital Gain (Profit)
ANAF didn’t clarify which method you should use for calculating your cost basis yet, but here’s a guide to all the different accounting methods. For now, we’ll briefly cover the most common accounting method for calculating cost basis – the average cost basis method.
Average Cost Basis – To calculate your cost basis using this method, just divide the total acquisition cost of all your crypto that you own by the number of units of that coin.
So, for example, if you own 9 BTC and their total acquisition cost is $18000, the cost basis for 1 BTC will be $2000 ($18000/9).
As for calculating taxes for income received as crypto – you’ll pay income tax rates on the fair market value (FMV) of the crypto at the time of acquisition.
So, for example, if you received 5 BTC as payment for your freelance services. And the FMV of those 5 BTC at the time of receiving it was $8000. You’ll now pay 10% income tax rates on $8000.
All this may seem super complicated, especially if you’re an active crypto user with a long transaction history on your crypto wallets and exchanges. It’s highly impractical to track transactions and calculate your taxes manually. Instead, let a crypto tax tool, like Bitcoin.Tax do it for you.
Just connect all your crypto wallets and exchange accounts, select your preferred accounting method and relax. Bitcoin.Tax will automatically track all your transactions, calculate taxes, show opportunities to save taxes and create a tax report for you.
Crypto Taxable Events
The following are most common crypto taxable events and their tax consequences in Romania.
Selling or Spending Crypto
Any gains realized when selling or disposing of your crypto assets is subject to income taxes.
Swapping Crypto
Swapping one crypto for another is seen as a disposition. Hence, if you realize gains while swapping crypto, you’ll pay income taxes.
Getting Paid in Crypto
Getting paid in crypto for your services and products is treated the same as getting paid in fiat currency. Therefore, you’ll pay income tax rates on the FMV of your crypto at the time of acquisition.
Mining Crypto
Since mining crypto is a task, mining rewards can be considered a form of compensation or salary. Therefore, the same tax rule applies to mining rewards as getting paid in crypto – income taxes.
Staking or Lending Rewards
There are no official guidelines for ANAF on the taxation of staking and lending rewards. However, using the logic of crypto mining, we can assume that staking and lending rewards are most likely also subject to income taxes.
Airdrops & Hard forks
There are no clear guidelines on the taxation of airdrops and hard forks yet. The conservating approach would be to treat them as new income and pay income taxes.
Tax-Free Crypto Transactions
The following are some crypto transactions with no tax consequences –
Gifting Crypto
Even though there are no clear guidelines on the taxation of crypto gifts, based on existing tax laws, it’s mostly likely tax-free.
Buying and Holding Crypto
Since buying or holding crypto is not considered disposition, it’s tax-free.
Transferring Crypto Between Personal Wallets
Transferring crypto between different wallets is also not considered disposition since you still hold ownership of your coins. Hence, it’s tax-free.
How to Avoid Crypto Taxes in Romania
Since Romania is a part of the European Union (EU), all companies and businesses that provide financial services must obligate the EU on data sharing and anti-money laundering directives, which include companies verifying their users’ identity with KYC.
In short, the Romanian government can track your transactions and find out if you’re avoiding taxes. Needless to say, that is not an outcome you probably want since tax evasion can land you in jail. So, don’t avoid paying your crypto taxes in Romania.
However, even though you can’t entirely avoid your taxes, there are ways you can reduce your total crypto tax liability.
Firstly, make sure you’re utilizing the tax breaks provided to you. But other than that, gifting crypto to your family members is a great strategy to reduce your tax liability while keeping the crypto within your family. You can, of course, also consider doing tax loss harvesting.
Lastly, if you’re a high net-worth individual, we suggest you consult a tax professional to discuss and customize tax-saving strategies tailored to your situation.
How to Report Crypto Taxes in Romania
The financial tax year in Romania runs from 1st January to 31st December, while the deadline for reporting your taxes is 25th May.
You can report your crypto taxes in Romania online portal or via the post office using this form.
To make this process easy, you can use Bitcoin.Tax. It will automatically track all your transactions, calculate taxes and create a tax report for you.