We’re providing below answers to the most frequently asked questions regarding the Romanian taxation of capital gains from stock market investments done by individuals. The answers are provided by the best tax consultants, specialized in taxation of investment type of income.

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Romanian taxation of capital gains

More and more people are turning to investments in the stock market, forex and mutual investment funds. Stock markets have been on continuous growth for years, and investors are always thinking of generating as much profit as possible. When generating significant gains from stock transactions or receiving dividend payments as result of owning shares, investors automatically worry about the applicable tax treatment for such shares, as well as the tax reporting liabilities they have towards the authorities.

Individuals who obtain capital gains from Romanian investment funds or from the sale of shares issued by Romanian companies have the obligation to declare such income to tax authorities through the annual tax return (in Romanian: “declarația unică”).

It should be noted that, if you sell the shares through a Romanian broker, the brokerage firm has the legal obligation to provide you, at the end of each tax year, a portfolio report for the ended year. That record includes information about the total gains or losses you registered during the previous year from all sale transactions.

Regardless of whether you have made a gain or loss for the entire year, the respective amount must be declared to Romanian tax authorities (ANAF) via the annual tax return. If you are in a gain position, then you will have to pay tax. If you are in a loss position, then you will not owe any taxes, and the declared loss will be carried forward to the next year. Specifically, if you declare it to ANAF, the loss registered during a year will be taken into account when determining the final gain for the next tax year.

The deadline for submitting the annual tax form is 25 May of the following year. The reporting deadline can be extended by the authorities, as has happened in practice in the last 2 years.

The annual tax return in Romania can be submitted as follows:

Online, via the Virtual Private Space (in Romanian: Spațiul Privat Virtual), on the ANAF’s website – for this method you need to register a personal account in the Virtual Private Space;
Online, via the e-guvernare.ro website, by signing the tax form electronically, based on a qualified digital certificate; for this method it is necessary to purchase a qualified digital certificate in advance;
In hard copy, directly at any ANAF agency within the jurisdiction where you reside in Romania, or by post, through the acknowledgment of receipt method.

For more details on the Romanian annual tax return you can also read the article: Romanian annual tax return – frequently asked questions.

The amount of Romanian income tax due to the state as per the tax return can be paid as follows:

if you opt for cash payment, this can be done either at the local unit of the State Treasury or at the ANAF agency in the jurisdiction where you reside in Romania, or by payment postal order;
if you opt for online payment, this can be done through the Virtual Private Space (if you already have such account opened on the ANAF website), or by bank transfer, using internet banking, directly to the Treasury’s account; if you do not use the internet banking system of the bank where you have an account, you can also use the bank transfer option, directly at your bank’s counter.

The treasury account specific to annual tax payments due by individuals is the one with the termination 5504. It is important to note that the beginning part of the account differs depending on the county or district in which you reside.

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Romanian tax law applies the same tax treatment to non-resident individuals who derive taxable capital gains from Romania (if tax is applicable as per the tax treaty) that also applies to the same income obtained by Romanian residents.

As general rule applicable according to the Romanian Tax Code, non-residents are subject to taxation in Romania only for income obtained from Romania. In addition, for the purpose of taxing such income, the provisions of the double tax treaty between Romania and the individual’s country of residence (if one is in place) will apply, as per the case.

For the purpose of applying the tax treaty, non-residents must be able to prove tax residence in the other country (usually by a certificate of tax residence issued by the tax authorities of that country).

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