According to a general definition capital gains tax or CGT is the type of tax that is imposed on profits generated from the sale of property, precious metals, bonds, and stocks. But it is important to note that not all countries impose such a tax. In Romania, capital gains tax is 0% in some cases, but more details about this type of taxation can be found from our Romanian accountants.
| Quick Facts | |
|---|---|
| Capital gains tax in Romania | 1% – 3% on the sale of stocks |
|
Annual reporting information and declarations |
Submitted to ANAF (National Agency for Fiscal Administration) |
|
Applicable legislation |
Fiscal Code, Law no. 142/2022 with modifications for Law no.227/2015 |
| How is the taxable amount calculated? | Calculation is based on the difference between the sale and acquisition price of the stocks |
| Exemptions on capital gains tax in Romania |
0% on capital gains derived from open-end collective investment funds, gifts, and interest derived by pension funds within European Union; 8% income tax on dividends distributed starting with 2023 |
| How is the ownership transfer taxed in Romania? |
0% capital gains tax on the transfer of property ownership, in case of inheritance |
| Capital gains through intermediaries |
Income tax withholding for transfers of securities made by intermediaries such as: – managers of alternative investment funds, – investment companies, – Romanian residents and non-residents with permanent establishment in the country |
| Income from the transfer of securities except for investments in gold |
Subject to income tax withholding for transfers made by intermediaries |
| Reporting the sale of shares in Romania |
Annual returns by the 25th of May of the following year |
| Capital gains tax for securities in Romania | 1% and 3% for securities acquired in a period of less or more than 365 days |
| Health insurance contribution |
Set at a 10% rate and due in case of capital gain for categories of income that reach the annual threshold of 6 minimum gross wages |
| Who is considered a tax resident in Romania? |
Individuals who live in Romania for a period that exceeds 183 days in any period of 12 consecutive months |
| How many double taxation treaties has Romania signed? |
Around 87 |
| Evaluation from a tax specialist for your company in Romania |
Our tax experts can provide information on taxation matters, including capital gains tax for your firm in Romania |
| Choosing our tax specialists in Romania |
– experience in a wide range of tax areas, – a team of accountants prepared in assisting corporate clients, – affordable prices for accounting services offered |
Information about capital gains tax in Romania
According to Romanian laws, a capital gains tax of 10% is imposed for the sale of stocks. The income generated from rents is also subject to the same capital gain tax and it is important to mention that it can be deducted by 40% in certain cases. Here are other details about the capital gains tax in Romania:
- According to Romanian tax legislation, employees who have earned income from stock option plans are not required to pay tax when granting or exercising these options.
- It is important to note that the sale of the underlying shares, individuals who obtain capital gains must take into account the capital gains tax.
- In terms of taxable income, it is calculated as the difference between the proceeds from the sale and the exercise price, except for the related commissions, where applicable.
- Revenues derived from foreign currency transactions are subject to taxation. 10% is the capital gains tax.
- In the case of properties sold with more than RON 450,000 the capital gains tax is 3%.
- It is important to know that the sale of personal items and capital gains are not subject to taxation. Exceptions are capital gains from the sale of real estate if a certain threshold is reached.
- Gifts are not subject to capital gains tax. Also, gifts consisting of real estate may be subject to capital gains tax, unless such a gift is received from or by relatives up to the third degree.
We remind you that our team of specialists is ready to offer complete help in terms of registration for taxation and payments related to a company. You can also request audits in Romania when necessary.
Capital gains tax in case of inheritances
The Romanian laws on property taxation mention that no capital gains tax is imposed for the transfer of ownership in the case of inherited real estate, as long as this process takes place in a maximum of two years. However, if this term is exceeded, and the transfer of ownership is not made, the capital gains tax will be 1% of the value of the respective inheritance. We invite you to talk to our team of accountants in Bucharest and find out what kind of taxation is required in Romania in different fields.
Other details about the taxation system in Romania
Romania has an advantageous taxation system, compared to other countries in the European Union. Therefore, there are many who decide on foreign investments in this country. Here are some details about other taxes imposed in Romania:
- Corporate tax in Romania is 16% and applies to profits registered by a company or legal entity.
- Dividend tax in Romania is 5%.
- VAT in Romania is 19%, but there are also lower rates, depending on the services and goods offered for sale.
- Income tax rate in Romania is 10%, both for residents and non-residents.
If you want to find out more information about the taxation in Romania, please contact our Romanian accountants with experience in this field.
Capital gains earned through intermediaries – New regulations apply
According to the latest information, some changes have been made to the tax legislation, regarding the capital gains tax in Romania, made through “intermediaries”. Before explaining the new rules in this regard, you must understand the term “intermediaries. They can be:
- Romanian tax residents and tax non-residents with permanent residence in Romania.
- Self-managed investment companies.
- Investment management companies.
- Alternative investment fund managers.
In addition to the obligation to calculate the gain or loss, as the case may be, for each transaction carried out on behalf of a taxpayer, the annual reporting of this information by the taxpayer is done directly to ANAF. The intermediaries mentioned above have the obligation to calculate, withhold, declare and pay the income tax for each transaction registered, for the income obtained in Romania and abroad. The exception, in this case, is the income obtained from the transfer of investment gold.
For the earnings obtained through these intermediaries, the tax rates drop to 1% or 3%, and below we come with the explanation:
- Securities – 1% tax rate on capital gains from securities purchased and sold within a period of more than 365 days, calculated from the day of purchase. The 3% tax rate on capital gains from securities purchased and sold within a period of fewer than 365 days is calculated from the day of purchase.
- Derivatives – 1% tax rate on capital gains from derivatives held more than one year after purchase. 3% tax rate on capital gains from derivatives held less than one year after purchase.
The fiscal value of the shares sold is calculated using the weighted average cost method, also taking into account commissions for each individual transaction, regardless of the holding period. Thus, the capital gain can be determined.
It is important to state that the losses suffered by intermediaries from the transfer of securities or derivatives cannot be carried forward and compensated with future revenues. These losses are considered permanent for the respective taxpayers.
Also, according to the new changes to the legislation, there are transitional measures in relation to capital gains obtained for the current fiscal year, but you can find out more details from our Romanian accountants.
Tax reliefs available in Romania
Romania signed a number of double taxation agreements to avoid the double payment of taxes and also fiscal evasion. Considering this aspect and also the fiscal legislation, Romanian tax residents who are subject to income tax in a country with which Romania has settled a double taxation treaty are granted a tax credit or a tax exemption. In this case, the credit is conferred at the level of the tax paid overseas. However, such credit cannot surpass the tax to be paid in Romania. Available information on this topic can be found from our accountants in Romania who can also explain to you the capital gains tax in Romania.
Working with a team of accountants in Romania
If you want to set up a company in Romania, you can ask for accounting services from our local company. We have dedicated experts in each accountability area who can provide the exact services you need for your firm. Professionalism and efficiency are top attributes you can rely on when collaborating with our Romanian accountants.
Why invest in Romania
Romania is an excellent business destination, and foreign investors enjoy an optimal climate, a stable economy, and various incentives. If Romania is on your list of future investments, then it is important to note the advantages offered by the business climate, including geographical positioning that offers multiple connections, rich natural resources, an experienced workforce, the ease with which a company can be registered. The following statistical data broadly show the economic direction of Romania:
- Approximately USD 98 billion was the total FDI recorded in 2019.
- In terms of business with simplified formalities, Romania ranked 55th out of 190 world economies, as mentioned in the 2020 Doing Business report.
- Austria, Germany, the Netherlands, Cyprus, and Italy are the main investors in Romania.
So if you want more information about the taxation system in Romania and more precisely about capital gains tax in Romania, we invite you to contact our accounting company in Romania.