Tax on cryptocurrencies held with Revolut
With ever-growing usage, the Revolut platform has become a giant in the financial sector, attracting an impressive number of users thanks to its innovative features and services. Since 2017, the year in which it added its cryptocurrency trading service, Revolut has broadened its users' horizons, adding a further dimension to the financial experience.
This development has opened the door to a growing number of financial enthusiasts exploring and investing in the field of cryptocurrencies. Against this background, it is essential to examine the tax implications of cryptocurrency transactions on Revolut.
We will look in detail at how these tax aspects may affect the management and declaration of cryptocurrency income on this ever-expanding platform.
What is Revolut?
Revolut is a financial institution and online banking services platform founded in 2015. It offers a wide range of financial services and money management tools, particularly in the context of international transactions and card use abroad. Revolut was initially launched as an alternative to traditional banking services, with an emphasis on the efficiency and flexibility of financial operations.
The main features of the Revolut platform include:
- Multi-currency cards: Users may obtain debit or credit cards allowing them to hold and use multiple currencies, thereby avoiding exchange fees on international transactions.
- Commission-free currency exchange: Revolut offers interbank exchange rates with no additional commission, making currency transactions more advantageous.
- Savings and investment services: Revolut provides features for saving and for investing in shares and other financial instruments.
- Premium and business services: The platform also offers premium options for users, as well as dedicated solutions for companies and businesses.
- Cryptocurrency trading: The platform allows trading in various cryptocurrencies, giving users the opportunity to invest in this class of digital assets.
The difference between Revolut and a crypto exchange
The main difference between Revolut and an exchange specialising in cryptocurrency trading is that, when you trade cryptocurrencies on Revolut, you hold a contract representing the value of the cryptocurrency, but you do not hold the digital asset itself. Revolut stores the cryptocurrencies on your behalf, and users have no direct access to the private keys.
On an exchange, you actually hold the digital assets. This affords greater autonomy and responsibility in managing cryptocurrencies.
Other differences include:
- Number of supported cryptocurrencies:
- Revolut: Supports a limited range of cryptocurrencies. It is suitable for those seeking a simplified trading experience with a few major cryptocurrencies.
- Cryptocurrency exchange: These platforms often offer a wider range of cryptocurrencies, including lesser-known tokens newly launched on the market.
- Advanced trading features:
- Revolut: Offers a simplified trading experience, suitable for beginners. Advanced features may be limited.
- Cryptocurrency exchange: Provides advanced features such as margin trading, complex orders and technical analysis. These are designed for experienced traders.
Revolut's fees for cryptocurrency trading
As of 27 June 2023, users on Revolut's Standard plan incur certain fees on cryptocurrency transactions.
These fees are calculated as the greater of a percentage fee of 1.49% of the transaction value and a fixed minimum fee, which varies by region: for the Nordic countries, Ireland and Switzerland, the minimum fee is £1.99 or the equivalent in local currency; for Western Europe, the United Kingdom and Cyprus (excluding the Nordic countries, Ireland and Switzerland) it is £1.49 or the equivalent in local currency; and for Eastern Europe it is £0.99 or the equivalent in local currency.
It is essential to note that these fees apply only to users on the Standard subscription and may vary by region.
Tax on income earned from trading cryptocurrencies on Revolut
When trading cryptocurrencies on the Revolut platform, users are liable to income tax on the gains derived from those transactions. Under tax legislation, a standard income tax rate of 10% applies to gains realised from cryptocurrencies.
It is important to bear in mind that the 10% income tax applies to the difference between the purchase price and the sale price of the cryptocurrencies. Before carrying out any transaction, Revolut users are advised to review the fees section of the app carefully and to be aware of the tax implications.
For more specific details tailored to Romanian tax legislation, we recommend reading the article on cryptocurrency taxes in Romania. It provides relevant information on the specific taxes, tax thresholds and other aspects of the tax treatment of cryptocurrency transactions under Romanian legislation.
Conclusions
In light of the rapid developments in the cryptocurrency field, tax management has become a crucial concern for users in Romania in 2024. This article has examined in detail the tax rules in force and their implications for cryptocurrency transactions on the Revolut platform.
In conclusion, awareness, staying constantly informed and working with tax experts are essential to navigating the complex terrain of cryptocurrency taxation successfully. By meeting their tax obligations and adapting to legislative changes, users in Romania can manage the tax aspects of cryptocurrency transactions effectively in 2024 and beyond.
We, the Buju Stanciu & Associates team, provide the support you need in managing the taxation of cryptocurrencies in Romania. Given the rapid changes in this field, full compliance with tax regulations is essential.