In 2014 the first Bitcoin ATMs opened up in Romania. What would have suggested an early interest in the topic was diminished by the statement of a finance ministry official who back then said: “There is some preoccupation with Bitcoin, but a legal framework is some time away and only after that will we analyze the need for a fiscal one.” Although today there are a few considerations by the government concerning the topic of cryptocurrencies the regulatory framework is hardly developed compared to other European countries.
Cryptocurrency taxes for individuals in Romania
As Bitcoins are not issued by authorized issuers the Romanian government does not consider them a currency under Romanian law. Thus, Bitcoin is defined to be a moveable good for which any transaction that implies a payment in Bitcoin is considered to be a barter.
For tax purposes, profits made from cryptocurrencies are subject to income or capital gains tax, both at a flat rate of 10% (capped of a maximum of EUR 5,000 per annum). For individuals the profits are included in the personal income tax return. Other than this information and a warning published by Romania's National Bank in 2015, stating that investing in such currencies involves high risk, there are no clear implications for the regulation of cryptocurrencies for personal use. Still it is to be expected that more regulations will be discussed in the future as the market in Romania sees rapid growth. A recent study by Statista identifies that 12% of Romanians own cryptocurrencies, hence are at second place after Turkey. Taxpayers (except for non-profit organisations and taxpayers deriving most of their income from agriculture) must submit the profit tax returns by the 25th day of the first month following the first, second, and third quarters. The annual profit tax return is due by 25 March of the following year if the fiscal years equals the calendar year; for the cases where the fiscal year is different than the calendar year, the annual profit tax return is due by 25th day of the third month after the end of the company’s fiscal year.
Cryptocurrency regulations for businesses in Romania
Generally companies and exchanges are allowed to use cryptocurrencies for their activities. If for example accepting payments in Bitcoin these are considered to be assets and taxed as income based on their market price. In Romania there are a few exchanges, yet its oldest, BTCxChange had to shut down its business due to the closure of its bank account. Another exchange, CryptoCoin Pro ended its relation with Romanian banks because of, what the CEO mentioned, "vague" reasons.
Further implications for businesses engaging with cryptocurrencies is a draft to regulate the issuance of electronic money which was published in July 2018. The draft is directed at "electronic money" but due to the definition, “monetary value stored electronically, including magnetic, representing a claim on the issuer issued on receipt of funds for the purpose of performing payment transactions and which is accepted by a person other than the issuer of electronic money”, also applicable for cryptocurrencies. For the issuance of electronic money the issuer must have a minimum of € 350,000 share capital and has to be approved by the Romanian National Bank (BNR). This includes full verification, tax payment history and legal records of all members of the issuing company. If authorization is guaranteed by the BNR it is valid for 12 months. Should the company fail to issue tokens in this period, the authorization expires. Any company issuing a cryptocurrency or tokens without the authorization of Romania's National Bank it faces imprisonment of 6 months to 3 years or monetary fines. When the draft bill will be passed into law is yet to be defined.
Government statements on cryptocurrencies in Romania
“It’s a challenge for the banking system because this area isn’t very well regulated and I believe that this should happen. It’s an area in which lots of money circulates, but it is also a new technology," says lan Laufer, Romania’s Business, Commerce and Entrepreneurship Environment Minister in 2017. Yet the number of clear statements on cryptocurrencies published by Romanian authorities is at a minimum. The approach of banks mostly is derived from the EU's perspective. The BNR for example classified digital currencies such as bitcoin as speculative assets, issuing a warning that they are speculative and risky and that the bank itself discourages any involvement. This position is reflected by other local banks which are for example closing bank accounts from crypto exchanges as stated above.
Free Crypto Tax & Portfolio Software
In recent years, it has been observed that the trade in cryptocurrencies such as Bitcoin, Litecoin and Ethereum has steadily increased. However, many cryptocurrency owners do not consider that the profits or losses from trading cryptos are taxable. Therefore Blockpit offers software that meets the requirements for traders of Bitcoin, Ether and Co. Besides the webapp Blockpit also offers a mobile app that is free for iOS and Android. With the API import, transactions can be imported from different exchanges without much effort. Taxes on cryptocurrencies do not need to be complicated - use Blockpit
The information provided in this blog post is for general information purposes only. The information was completed to the best of our knowledge and does not claim either correctness or accuracy. For detailed information on crypto regulations we recommend contacting a certified legal advisor in the specific country.
As this blog post refers to international crypto laws, the content will only be available in English. If you have any questions, please feel free to contact us on one of our social media channels.