The Fiscal Code has been modified and now includes the obligation to report the profits obtained from cryptocurrencies. The reporting obligation applies only if the virtual currencies are converted into lei or used for the purchase of products and services.
Individuals who earn money constantly from cryptocurrencies (over 600 lei a year) now have an official obligation to report their incomes annually and to pay taxes. Specifically, the revenues from virtual currencies from 2019 must be declared in 2020, in order to establish the taxes due. The reporting is done through the single declaration, which can be submitted either online or physically at the offices of the Treasury.
Taxation only for conversion into fiat currencies or acquisitions
According to Deloitte Tax Romania, taxation is only for cryptocurrencies converted into lei or currency or used to buy products or services.
“In the context where virtual currencies are not recognized in Romanian or European law as currencies, electronic currencies or real currencies, we believe that the natural person acquires a real benefit only when converting these virtual currency units into foreign currency units, legal currency (for example, highlighting the income in the bank account) or in goods or services that the individual actually benefits from. A contrary interpretation would be impractical, given the volatility of cryptocurrencies and the fact that transactions are usually carried out through trading platforms whose settlement is uncertain (not regulated, supervised or controlled by the state institutions) and the natural person could end up pay tax on a hypothetical income ”,
explained Raluca Bontaș, partner, and Cătălin Barbu, consultant, both from Deloitte Tax.
Therefore, profits from crypto-to-crypto transactions are not taxable.
If the total income obtained by a person in a year exceeds 12 minimum wages, CASS will be paid.
Profits from cryptocurrencies
Those who earn from 601 lei upwards from cryptocurrencies (incomes converted into lei or currency or used to purchase goods or services) must pay income tax of 10% of winnings. These revenues are reported in the single tax return filed with the Fiscal until March 15.
Those who earn at least 24,960 lei (including other incomes, not just cryptocurrencies) have to pay additional CASS of 10% of the respective amount.
The obligation to report annually the revenues from cryptocurrencies of over 600 lei, as income from other sources, and to pay taxes to the state was introduced earlier this year. Therefore, the single declaration of March 2020 must also include the profits obtained from cryptocurrencies made this year if they meet the above criteria.