As you probably already know, betting is legal in Romania, and this explains the large number of bookmakers operating in our country. Both the betting activity and the winnings obtained from this activity are 100 per cent legal, respecting the legislation imposed by the Romanian authorities.
This means that gambling is taxed, and punters must always be aware of the rules on taxation of income from betting. This is the topic we propose to address in the following lines.
Tax to be increased from one to three per cent
The bad news for punters is that taxes on betting winnings have increased this summer. The government has adopted an ordinance that has made several changes to the Tax Code, including changes to the tax threshold for sports betting income.
From August 1, 2022, the sports betting tax increases from one to three per cent, which is an increase that most punters who have made a profit this month will certainly have felt.
Tax thresholds for sports betting income
Here's how betting winnings are taxed following these changes made by the government:
- Winnings up to and including 10,000 lei will be taxed at 3 per cent of the amount withdrawn
- For winnings of more than 10,000 lei, a tax of 300 lei plus 20 per cent of the amount exceeding the 10,000 lei threshold will be paid. This tax rule applies to amounts withdrawn between RON 10,001 and RON 66,750 inclusive. In other words, if you withdraw the amount of 11,000 lei, then you will pay a tax of 300 lei + 20 per cent of 1000 lei, resulting in a tax of 500 lei that will go to the state budget
- Earnings over 66,750 lei are heavily taxed. If the amount withdrawn exceeds this threshold, then you will pay tax of 11,650 lei plus 40 per cent of the amount exceeding the threshold of 66,751 lei. For example, if you withdraw 90,000 lei, you will pay tax on 11,650 lei + 9300 lei, resulting in a total tax of 29850 lei
However, you should know that the tax on winnings is only levied on those betting agencies that have obtained a licence from the ONJN.
As not all bookmakers have obtained this licence necessary to operate on the Romanian market, it is important to note that it is illegal to play at bookmakers without a licence.
That's why you should know that legal bookmakers in Romania are for example Unibet, NetBet, Betfair and others (please check ONJN website). Only in this way you can have full legality whenever you place sports bets.
What do you need to know about taxes paid on betting winnings?
It is important to note that the punter does not have to worry too much about the taxation of the winnings obtained through this activity.
All this responsibility to pay taxes and duties on the income obtained from betting is the responsibility of the betting agencies, and thus the punter is spared the headache that the Romanian bureaucracy causes.
The amounts of money that bettors owe to the state are withheld directly at source, so when you make a withdrawal, you will notice that your account will not receive the full amount for which you have registered a withdrawal, but an idea less. Well, that missing amount is the tax that the bookmaker has withheld for you, so you don't have to make extra trips.
The betting agency will then take care of transferring the taxes to the Romanian state's bank accounts, so that each individual punter is spared the bureaucratic stress.
How much tax did punters pay before?
There have been increases in the tax on sports betting income, and until recently taxes were much lower. Here's how much punters pay for sports betting income:
- One per cent for income up to and including 66,750 lei
- 667,5 lei + 16 per cent of the amounts above 66.750 lei, up to the threshold of 445.000 lei, inclusive
- For the amounts of 445,000 lei tax of 61,187.5 + 25 per cent of the amount exceeding this threshold
So these are the most important things you need to know about the new gambling tax in Romania. Last but not least, you should make sure that you choose to play at a licensed bookmaker in Romania, in order to be able to carry out this activity in full legality.
Disclaimer: Play responsibly. Players must be over 18. For help visit https://www.gamcare.org.uk/.
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