Cryptocurrency trading is risky, but it’s also one of the most profitable ways to make money. Unfortunately, with the volatile nature of digital assets, it can be hard to keep track of all your profits and losses. But Romania’s tax authorities are coming for you if you fail to report your gains!
The tax authorities in Romania have begun a crackdown on people who have failed to report income from cryptocurrency trading, announcing that they have identified almost €50 million of undeclared gains. Romania’s National Agency for Fiscal Administration (ANAF) made the campaign public, saying that authorities are investigating cases where taxpayers have not reported income from digital assets. The agency targets over 60 Romanian citizens who, as ANAF established, made €131 million in crypto revenues between 2016 and 2021.
It added that it had sent letters to individuals suspected of having failed to declare their gains or pay taxes on them, asking them to present their case by May 23. Those who fail to comply will face fines or even criminal charges. Tax inspectors have announced that a total of €48.67 million in digital assets was missing from tax returns, with the agency ordering the recovery of €2.10 million in unfulfilled tax obligations.
Romania says some individuals have declared their gains
The ANAF has also confirmed that gains from digital assets in the amount of approximately €15 million had been properly declared and the due income tax and social contributions paid in full.
The Romanian tax authority is looking to increase budget receipts and voluntary compliance among all categories of taxpayers. It also intends to check revenues from various other crypto-related operations, such as mining or trading non-fungible tokens (NFTs).
Germany revises tax for crypto gains
It’s been a year since Germany started taxing virtual assets, and the country has revised its policy. The German Ministry of Finance announced that the sale of acquired bitcoin and ether wouldn’t be taxed if individuals held the coins for more than one year. The change comes as a result of some users of virtual assets expressing concern over how their earnings would be taxed in Germany.
The original law required German taxpayers to declare gains from cryptocurrency transactions on their tax returns. But what if you bought bitcoin long ago and only recently sold it? You’d have to report your capital gains in this case—even though you may have already paid taxes on these profits when you originally made them.
That’s why Germany made changes to its tax laws. This new rule would help ensure that German citizens aren’t paying unnecessary taxes on income they’ve already earned elsewhere (or at least trying not to!).
If you don’t declare cryptocurrency profits in Romania, you could get in trouble with the ANAF’s anti-fraud department. The ANAF has been collecting data on cryptocurrency transactions and account information from the designated service providers, and its data-matching operation continues this year.
The agency is now sharing its knowledge about crypto-trading with its international counterparts, so if you make money from your crypto-trading activities, chances are that they know about it.
It’s hard to believe that crypto was still in its infancy just a few years ago, and only a few people were aware of it. However, everyone knows what a blockchain is and where they can buy cryptocurrencies.
National laws and authorities largely regulate the European crypto space. However, the legal environment for investors and businesses will change significantly with the upcoming EU-wide rules for the industry that will apply to various cryptocurrency transactions. Recently, representatives of the European Parliament, Commission, and Council agreed to adopt a set of anti-money laundering rules and a legislative package known as the Markets in Crypto Assets (MiCA) law.