🇷🇴 Tax residency in Romania

So, you're wondering if Romania is going to slap its tax residency tag on you. It’s not as simple as just counting days, though that’s the big one. You’re officially a tax resident here if you spend 183 days or more within any 12-month period. Simple, right? Not quite.

That 183-day rule is the starting point, but Romanian tax law has a backup plan to catch you: the centre of vital interests test. Think of it as a way for them to say, "Okay, you were here 180 days, but your life is really here now." This is where it gets fuzzy. Factors include where your permanent home is, where your family ties are strongest, where you have significant economic interests, and where you habitually spend your free time. If these point to Romania, even if you haven't hit that 183-day mark, you could still be deemed a tax resident. It’s a subjective test, and that's where things can get dicey.

What actually pulls you in, even if you’re playing the short-stay game? Owning real estate here is a big one. If you buy an apartment or a house, it’s a strong signal that Romania is more than just a temporary stop. Similarly, having family – a spouse, children – living here permanently makes it harder to argue that your centre of vital interests lies elsewhere. And don't forget about registered businesses. If you set up a company in Romania and actively manage it, that’s a pretty clear indicator of significant economic ties. Even if you're not physically there for 183 days, these factors can push you over the line.

Now, let's talk numbers. If you are deemed a tax resident, Romania taxes you on your worldwide income. This is where that 10% flat tax rate sounds amazing. For most income types, like employment or freelance earnings, it’s a dream compared to many other European countries. So, if you earn, say, €30,000 per year, your Romanian tax bill would be just €3,000. That’s genuinely competitive. However, this flat rate applies to most things. Dividends might be taxed differently, often at 8%, and capital gains can have their own rules depending on the asset and holding period. It’s not always 10% on everything, but for your core income, it’s a sweet deal.

Romania doesn't really have a "special regime" for digital nomads in the way some countries do with specific visa tax breaks. The flat 10% is the closest thing we have to a special deal, and it’s just the standard rate for individuals. It shelters your main income from higher progressive rates, which is fantastic. But it doesn't offer exemptions for foreign-sourced income or anything like that. You're taxed on everything you earn globally, regardless of where it comes from, once you're a Romanian tax resident.

What about those pesky tax treaties? If you're from the US, the treaty aims to prevent double taxation. Generally, you'll be taxed where you are resident, but if you have income from US sources, the US will likely still want its cut. The treaty helps decide which country gets primary taxing rights. For the UK, similar principles apply. Your residency usually determines where you pay tax, but treaty provisions kick in to avoid you paying the full amount twice. For Germany, the treaty is also crucial. If you spend significant time in Romania and meet the residency tests there, Germany will typically concede its right to tax that income, provided Romania taxes it. The key is to understand how the treaty allocates taxing rights between your home country and Romania based on your specific circumstances.

when does hiring a local accountant make sense? If you’re just here for a few months and have simple freelance income taxed at 10%, maybe you can wing it. But if you own property, have a registered business, significant investments, or are unsure about the centre of vital interests test, paying for an accountant is a no-brainer. They can cost anywhere from €50 to €150 per month for basic services, but that fee pays for itself the moment they save you from a penalty, help you claim a deduction you missed, or simply give you peace of mind that you're compliant.

if you're in Romania for over half the year or have strong ties like property or family, prepare to pay that 10% on your worldwide income.

This is informational, not legal advice.