Cryptocurrencies and criminal liability. The Romanian tax office has identified the amount of 48 million euros suspected of tax fraud

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By Cristian Roman, Lawyer Partner Iordăchescu & Associații

In an international context where the cryptocurrency market is hit by numerous scandals, we notice that these events are coming to the attention of investigators, including in Romania.
One of the largest trading platforms, FTX, recently declared bankruptcy in the United States of America after withdrawals of 6 billion dollars in 3 days. Current data shows that the platform still owes more than $3 billion to creditors. The former CEO of FTX, Sam Bankman-Fried, was extradited from the Bahamas and the Federal Court in Manhattan ordered his release on bail pending the criminal trial.
“And in our country, in the fall of 2022, 17 searches were carried out in the Capital and in the counties of Dâmboviţa, Ilfov and Olt, on persons suspected of tax evasion by hiding income obtained from transactions with virtual currencies and organized criminal groups, according to the data offered by the General Inspectorate of the Romanian Police,” says Cristian Roman, Lawyer Partner Iordăchescu & Asociații.
It is assumed that, in the period 2019 – 2022, 19 people would have constituted or joined an organized criminal group with the aim of committing the crime of tax evasion by hiding the taxable source represented by income obtained from transactions with virtual currencies from which a damage of over 3 million lei. According to a statement from the Treasury, the inspectors of the General Anti-Fraud Fiscal Directorate within ANAF initiated controls to verify the income obtained between 2016 and 2021 from the trading of cryptocurrencies through various decentralized platforms, such as Binance, KuCoin, Maiar, BitMart, FTX.

“In a first stage, revenues of over 131 million euros obtained by 63 Romanian citizens were identified. To date, DGAF inspectors have identified approximately 48.67 million euros omitted from the declaration, partially or fully.” continues Av. Christian Roman. These actions are carried out to ensure the increase in taxation and voluntary compliance among all categories of taxpayers. As a result of the controls carried out by ANAF, it is not excluded that criminal authorities are notified in relation to the inconsistencies found. We remind you that, by Law no. 30/2019, the Parliament introduced a new taxable source, namely the income from the transfer of virtual currency.
Thus, the persons who earn income from the transfer of virtual currency have the obligation to submit the single declaration regarding the income tax and social contributions owed by natural persons to the competent fiscal body, for each fiscal year, by May 25 inclusive of the year following the income generation. The payment deadline is the same as the deadline for submitting the single declaration.
According to the tax provisions, the tax rate of 10% is applied to the gain from the virtual currency transfer, determined as the positive difference between the sale price and the purchase price, including the direct costs of the transaction, once they are equalized in FIAT. Earnings below the level of 200 lei/transaction are not taxed to the extent that the total earnings in a fiscal year do not exceed the level of 600 lei.
“Non-payment of tax, in principle, only attracts the taxpayer’s fiscal liability, however, if he evades the fulfillment of fiscal obligations related to crypto-currency transactions, we can also discuss criminal liability. Law no. 241/2005 for the prevention and combating of tax evasion criminalizes the concealment of taxable income and the omission of the highlighting of income in accounting documents, when there is an obligation to keep accounts, even in the situation of transactions with virtual currencies. The increasingly impressive size of the cryptocurrency market has led to both the desire and the need for authorities to find ways to control and profit from these transactions, so at this point the public is faced with all several moral and legal dilemmas arising from this new reality.” concludes Christian Roman.

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