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Tax Residency and Romanian-Source Income for Non-Residents and Diaspora

The article explains when an individual becomes a Romanian tax resident, what qualifies as Romanian-source income and how this interacts with double tax treaties. It is aimed at Romanians living abroad and foreign nationals who earn income from Romania, offering practical examples and ANAF-focused risk points.

A recurring question for Romanians living abroad and for foreign individuals with ties to Romania is simple to formulate but complex to answer: where do I pay tax, to whom, and on which types of income? The answer is never purely administrative. It starts from the concept of tax residency and the definition of Romanian-source income. Combined with the rules in double tax treaties and the practice of the Romanian tax authority (ANAF), these concepts determine whether you are taxed on your worldwide income or only on income sourced in Romania, and how you can invoke treaty protection.This article primarily addresses two broad categories of individuals:
  • Romanians living and working abroad (the diaspora) who still have their domicile, properties or other ties in Romania; and
  • foreign nationals who derive income from Romania (employment, rentals, business income, dividends, independent activities, digital services, etc.).

We will look at the criteria for tax residency under the Romanian Fiscal Code and ANAF guidance, what is treated as Romanian-source income, the role of double tax treaties (in particular, those following the OECD Model Convention), how ANAF approaches residency in practice and in disputes, and several real-life scenarios: remote workers, cross-border directors and digital nomads who own property in Romania.

Criteria for Tax Residency in Romania

For individuals, the personal income tax regime depends on whether you are a tax resident in Romania or a non-resident. As a rule of thumb, residents are taxed in Romania on their worldwide income, while non-residents are taxed only on Romanian-source income. The Fiscal Code and ANAF’s residency guidance set out the criteria for determining residency.

Domestic rules on tax residency

Under the Fiscal Code and ANAF’s official guide on tax residency, an individual is generally considered a Romanian tax resident if any of the following main criteria are met:

  • they have their domicile in Romania, as reflected in their Romanian ID card; or
  • they have their centre of vital interests in Romania (stronger personal and economic ties in Romania than in any other state); or
  • they are physically present in Romania for one or more periods that exceed in total 183 days during any 12‑month consecutive period; or
  • they are a Romanian public servant or employee working abroad for the Romanian state (embassies, consulates, public institutions).

ANAF’s residency guide explains that individuals who leave Romania and intend to live abroad for more than 183 days must complete the Questionnaire for determining the tax residency upon departure from Romania, while those arriving in Romania on a long-term basis complete a similar questionnaire upon arrival. If these forms are not submitted, ANAF may continue to treat the individual as a Romanian tax resident, which can trigger taxation of worldwide income.

The 183‑day presence test

The best-known criterion is the 183‑day rule: if an individual is present in Romania for more than 183 days during a 12‑month period, they may become a Romanian tax resident. The key point is that the period is any rolling 12‑month period, not necessarily a calendar year. In practice, ANAF can check border crossing data and, once the 183‑day threshold is exceeded, will request the completion of the residency questionnaire.

According to ANAF’s materials and public guidance, the questionnaires can be filed both on paper and electronically through the e‑Tax (Spațiul Privat Virtual) or e‑government systems. The deadline is typically 30 days from the date on which the 183‑day threshold is reached for arrivals, while for departures the questionnaire is submitted before leaving Romania or within a specific timeframe indicated in the guide. Failing to respect these deadlines does not eliminate tax obligations, but can complicate discussions with ANAF.

Centre of vital interests

The centre of vital interests is less intuitive but very important in practice, especially for Romanians who “split” their life between Romania and another state or whose family remains in Romania. ANAF and tax doctrine explain that both personal and economic connections must be analysed:

  • personal ties: where the family lives (spouse, children), where the children go to school, where the main circle of friends is, where the person is involved in community life;
  • economic ties: the main place where professional activities are carried out, the principal place of business, ownership of real estate, bank accounts, investments, loans, insurance policies.

Even if a person spends fewer than 183 days in Romania, ANAF may argue that they remain tax resident if, overall, their personal and economic ties are stronger in Romania. Conversely, for Romanians in the diaspora, demonstrating that the centre of vital interests has genuinely moved to the destination state (primary home, family relocation, employment there, local bank accounts, etc.) is crucial to support non-resident status in Romania.

Dual residence and treaty “tie‑breaker” rules

It is quite common for an individual to meet the domestic residency criteria in both Romania and another country (for example, the state where they work). In such cases, the double tax treaty between Romania and that state becomes decisive. Most treaties follow the OECD Model Convention and include “tie‑breaker” rules for individuals in the article on residency.

In the typical OECD‑based structure, the tie‑breaker rules apply in the following order:

  1. Permanent home: the person is deemed resident only in the state in which they have a permanent home available; if they have a permanent home in both states, move to the next test.
  2. Centre of vital interests: if the permanent home exists in both states, residency is assigned to the state with which the person’s personal and economic relations are closer (centre of vital interests).
  3. Habitual abode: if the centre of vital interests cannot be determined, or if no permanent home is available in either state, residency is assigned to the state where the person has their habitual abode, i.e. where they normally live, based on the frequency and regularity of stays.
  4. Nationality: if the individual has a habitual abode in both states or in neither, residency is assigned to the state of which they are a national.
  5. Mutual agreement: if the individual is a national of both states or of neither, the tax authorities of the two states must settle the question by mutual agreement.

The OECD Model Commentary elaborates on these tests and clarifies notions such as “permanent home” and “habitual abode”, including what happens where a home is rented to someone else but still available to the owner. As most Romanian treaties closely follow the OECD Model, these comments are often used as persuasive guidance in interpreting the treaty rules.

Diaspora: temporary vs. permanent departure

For Romanians who leave the country to work or study abroad, the practical question is: “Am I still a Romanian tax resident or not?” From ANAF’s perspective, the mere fact of working abroad does not automatically terminate Romanian tax residency. The key is to show, with documents, that your primary taxing jurisdiction is now the destination state and that your main income is taxed there as a resident.

Typically, to support non-resident status in Romania, the following elements are important:

  • completion and submission of the departure residency questionnaire to ANAF, together with the documents requested (foreign employment contract, rental or ownership contract for housing abroad, foreign tax residency certificate, etc.);
  • obtaining and presenting a tax residency certificate issued by the foreign tax authority, in accordance with Article 230 of the Romanian Fiscal Code, when you want to apply a double tax treaty;
  • documenting that the centre of vital interests is no longer in Romania (relocation of the family, closure or downsizing of economic activities in Romania, change of habitual abode, etc.).

If these steps are not taken, ANAF may continue to treat the individual as a Romanian tax resident (based on domicile), potentially leading to assessments on worldwide income and additional filing obligations (such as the annual individual tax return) even though the person is already paying tax abroad.

What Counts as Romanian-Source Income

The crucial distinction between residents and non-residents is that residents are generally taxable in Romania on their worldwide income, while non-residents are taxed only on Romanian-source income. The Fiscal Code (notably Article 115 for individuals and Article 223 for non-residents generally) contains an explicit list of income types that are treated as sourced in Romania.

Main categories of Romanian-source income

The provisions on income obtained from Romania generally treat the following as Romanian-source income, irrespective of whether the sums are actually paid in Romania or abroad:

  • Dividends paid by a Romanian tax resident company;
  • Interest paid by a Romanian resident or by a non-resident through a permanent establishment in Romania, if the interest is an expense of that permanent establishment;
  • Royalties paid by a Romanian resident or by a permanent establishment in Romania;
  • Commissions received from Romanian residents or permanent establishments in Romania;
  • Entertainer and sportsman income for activities physically performed in Romania;
  • Management and consultancy fees paid by a Romanian resident or by a permanent establishment in Romania;
  • Directors’ fees and similar payments received by foreign board members, directors or founders of Romanian companies;
  • Service fees for services performed in Romania (with certain exceptions, such as international transport and related services);
  • Independent personal services (freelance, professional services) carried out in Romania by non-residents, even if they do not reach the threshold of a permanent establishment;
  • Income from prizes, gambling and games of chance organised in Romania;
  • Income from the liquidation or reduction of share capital of a Romanian company.

In addition, the Fiscal Code treats as Romanian-source income any gains derived by non-resident individuals from renting or selling Romanian real estate, as well as from transferring shares or similar rights in Romanian companies. These are clearly linked to Romania and are taxed in Romania either through withholding tax or through self-assessment, depending on the category of income and on whether a double tax treaty applies.

Rental income and other income from Romanian real estate

Real estate is always connected to the state where it is located. Both the Fiscal Code and double tax treaties invariably provide that income from the rental or sale of real estate may be taxed in the state where the property is situated. Therefore, a non-resident (whether a Romanian living abroad or a foreign national) who receives rent from an apartment or house located in Romania will be taxed in Romania on that rental income, regardless of where they live.

In practice, non-resident individuals earning rental income from Romanian property will typically have to:

  • register the lease agreement with ANAF, directly or through a representative, within the statutory deadline;
  • declare the rental income and pay Romanian income tax (and, as applicable, health insurance contributions) under the rules for rental income; in many cases, the regime is similar to that for residents, but with specific reporting features;
  • check the relevant double tax treaty to see whether their state of residence grants a tax credit for Romanian tax paid on the rental income, in order to avoid double taxation.

Employment income and similar remuneration

For employment income and similar remuneration, two elements are particularly important:

  • the place where the work is physically performed; and
  • the identity of the employer (Romanian or foreign) and whether there is a permanent establishment in Romania.

As a general rule, the Fiscal Code and most double tax treaties following the OECD Model provide that salaries are taxable in the state where the employment is physically exercised. A foreign national who performs their work in Romania for a Romanian employer will usually be taxed in Romania on their salary. Where the employer is foreign but the work is actually performed from Romania (for example, a remote employee working from Bucharest for an IT company abroad), the situation becomes more complex because of permanent establishment issues for the foreign employer. However, for the individual, the salary may still be treated as Romanian-source income insofar as the work is performed from Romania.

For Romanians in the diaspora, the situation is reversed: a Romanian who physically works abroad for a local employer will typically have their salary taxed in the host state. If ANAF nevertheless treats the person as a Romanian tax resident, they may have to declare that salary also in Romania. In such cases, the applicable double tax treaty (if any) will be relevant to avoid double taxation, usually through the credit method or exemption method, depending on the treaty.

Dividends, interest, freelancers and digital services

Other categories of income that are frequently relevant for non-residents and for Romanians abroad include:

  • Dividends paid by Romanian companies: these are Romanian-source income. Withholding tax is levied at the domestic rate unless a double tax treaty or EU directive provides for a reduced rate or exemption. The beneficiary may benefit from reduced rates if they present a valid tax residency certificate.
  • Interest paid by Romanian banks or other resident entities: as a rule, this is treated as Romanian-source income and taxed accordingly, subject to potential reductions under treaties.
  • Independent activities / freelancing (consultants, designers, programmers etc.) carried out from Romania for foreign clients: even if the client is abroad and pays from another state, the income will typically be considered Romanian-source, since the services are performed in Romania and the individual is often a Romanian tax resident.
  • Digital services (content creators, platform operators, online courses, subscription-based services) provided from Romania to international customers: where the activity is effectively performed from Romania, the income is usually treated as taxable in Romania for residents and as Romanian-source for non-residents who perform the activities here.

In all these situations, double tax treaties and foreign tax rules determine whether the home country grants a tax credit for the Romanian tax or exempts the income, thereby avoiding full double taxation.

Double Tax Treaties and Protection for Non-Residents

Romania has concluded double tax treaties with a large number of states, most of which are based on the OECD Model Tax Convention on Income and on Capital. The objective of these treaties is to prevent the same income from being taxed twice in full and to allocate taxing rights between states in a predictable way.

Key protective mechanisms

From a practical standpoint, double tax treaties usually offer non-residents the following protections:

  • Clear allocation of taxing rights for specific types of income (employment income, pensions, business profits, dividends, interest, royalties, income from immovable property, capital gains, etc.);
  • Limitation of withholding tax rates on passive income (dividends, interest, royalties) below the domestic law rates, provided that the beneficial owner is resident of the other contracting state;
  • Tie‑breaker rules for resolving dual residency cases and mutual agreement procedures between tax authorities;
  • Obligations for the state of residence to provide relief from double taxation (usually by granting a foreign tax credit or by exempting income taxed in the source state, in line with the treaty).

For example, a non-resident individual who receives dividends from a Romanian company may benefit from a reduced Romanian withholding tax rate (often 5%, 10% or even 0%, depending on the treaty and ownership threshold) instead of the domestic rate, provided that they furnish a valid tax residency certificate from their home state. Without that certificate, the Romanian payer will generally apply the full domestic rate.

Tax residency certificates and Article 230 of the Fiscal Code

Article 230 of the Romanian Fiscal Code requires the presentation of a tax residency certificate for the application of double tax treaties. In the absence of such a certificate, Romanian payers must apply domestic rules and rates, without treaty relief. The certificate must be issued by the foreign tax authority, be valid for the year in which the income is derived, and be accompanied by an authorised translation into Romanian.

For non-residents and for Romanians in the diaspora, it is crucial to understand that:

  • treaty benefits are not automatic; you must invoke them by providing the residency certificate and any other documentation requested by ANAF or the Romanian payer;
  • for income such as rental income, dividends, interest or consultancy fees, providing the certificate can significantly reduce Romanian withholding tax;
  • for Romanians who have become tax residents abroad, the foreign residency certificate is a key document in proving that their main tax status has shifted away from Romania and in claiming treaty protection.

The OECD Model Convention and Commentary

Although the OECD Model Convention and its Commentary are not directly binding on taxpayers, they are widely used by tax administrations, courts and practitioners to interpret bilateral treaties. Recent updates to the OECD Model and Commentary contain important clarifications on “permanent home”, “habitual abode” and “beneficial ownership”, as well as on anti-abuse provisions.

In the Romanian context, where a treaty closely follows the OECD Model, arguments derived from the Commentary can be particularly useful to support, for example, that:

  • a “permanent home” does not have to be owned; a rented dwelling can qualify as long as it is available to the person on a continuous basis;
  • “habitual abode” depends on the frequency, duration and regularity of stays, not just on a mechanical counting of days in a calendar year;
  • the centre of vital interests must take into account both personal and economic ties, which is highly relevant for Romanians who work abroad but still own significant businesses or properties in Romania.

Administrative Practice and Disputes with ANAF on Residency

In recent years ANAF has paid increasing attention to tax residency issues, especially in light of increased mobility and digital income. Updated guides, brochures and public communications stress the obligation to complete arrival and departure residency questionnaires and the importance of obtaining and presenting foreign tax residency certificates.

Focus on residency questionnaires

ANAF has repeatedly stated, including in regional guides and presentations, that individuals arriving in or leaving Romania for periods exceeding 183 days in a 12‑month period must file the residency questionnaires. The forms can be downloaded from ANAF’s website and submitted either physically or electronically. ANAF guidance also sets out the supporting documents required (passport copies, employment contracts, lease or ownership agreements, foreign tax residency certificates, etc.).

If questionnaires or supporting documents are missing, ANAF may continue to treat the individual as a Romanian tax resident or may refuse to apply a double tax treaty until the situation is clarified. This is a frequent source of disputes, particularly for Romanians who emigrated without completing these formalities at departure.

Reclassification as resident and taxation of worldwide income

Disputes often arise where ANAF concludes that an individual is still a Romanian tax resident, although the person considers themselves resident elsewhere. Based on border data, questionnaires (or their absence) and other information (Romanian properties, bank accounts, business involvement), ANAF may determine that the person is resident and assess tax on their worldwide income, including salaries and business income earned abroad.

In such situations, the taxpayer can:

  • file an administrative appeal against the tax assessment within the general deadline (usually 45 days from communication), under the Fiscal Procedure Code;
  • rely on the relevant double tax treaty, including tie‑breaker rules and the foreign residency certificate, to argue that Romania is not the state of residence for treaty purposes;
  • bring the case before the administrative courts if the administrative appeal is rejected.

Romanian court practice shows that, in many cases, the courts are prepared to look beyond pure formalism (missing forms or late submissions) and to examine the actual facts: where the person lives, where they work, where their family resides, and what the applicable treaty provides.

Risks for diaspora members and foreign individuals with Romanian connections

The main risks around residency and Romanian-source income for individuals are:

  • retroactive taxation of worldwide income in Romania if ANAF concludes that the individual remained a tax resident, potentially together with interest and penalties;
  • double taxation if a double tax treaty is not invoked properly or in time (for example, where a foreign residency certificate is not provided to ANAF or to the Romanian payer);
  • for foreign individuals, the recharacterisation of activities as being carried out through a permanent establishment in Romania, triggering broader tax obligations; and
  • misclassification of income as Romanian-source or not, which may affect withholding obligations and tax rates.

Proactive management of tax residency (through questionnaires, certificates and professional advice) and careful documentation of income and applicable treaties are essential to mitigate these risks.

Practical Examples: Remote Workers, Cross-Border Directors and Digital Nomads

The following scenarios illustrate how the rules on residency, source of income, double tax treaties and ANAF practice interact in real life.

Example 1: Romanian IT employee working abroad

Alex is a Romanian citizen with legal domicile in Romania, but has been living and working in Germany for two years as a software developer. He has a German employment contract, pays tax and social contributions there, and has a long-term lease in Berlin. In Romania, he owns an apartment which he uses only for short visits (two to three weeks a year) and maintains a bank account.

In this case:

  • from Germany’s perspective, Alex is clearly a tax resident there;
  • from Romania’s perspective, he still has his domicile in Romania, but his centre of vital interests appears to have moved to Germany (place of work, habitual abode, possibly family);
  • under the Romania–Germany double tax treaty, tie‑breaker rules would likely treat him as resident of Germany if his permanent home and centre of vital interests are found there;
  • if Alex completes the ANAF departure questionnaire and presents a German tax residency certificate, ANAF can acknowledge his non-resident status going forward and tax him only on Romanian-source income (e.g. rental income if he rents out the apartment).

If Alex fails to complete these steps, ANAF may continue to treat him as a Romanian tax resident (based on domicile) and request worldwide income declarations, leaving Alex to rely on the treaty afterwards to obtain relief.

Example 2: foreign remote worker living in Romania

Marie is a French citizen employed by a French IT company, but she has been working remotely from Bucharest for one year and rents an apartment there. She spends around 10 months per year in Romania, the rest of her time being spent in France and other countries.

In this scenario:

  • from Romania’s perspective, Marie exceeds the 183‑day threshold and has her habitual abode in Romania; for that period, her centre of vital interests may be regarded as being in Romania;
  • ANAF will ask her to complete the arrival residency questionnaire and may treat her as a Romanian tax resident, taxing her employment income for work performed in Romania;
  • France may continue to treat her as a resident under its domestic rules; if this results in dual residence, the tie‑breaker rules in the Romania–France treaty will need to be applied to assign treaty residence to one state;
  • depending on the outcome, one state will grant a foreign tax credit for tax paid in the other state.

In practice, such cases require coordination between the employer (which may have permanent establishment concerns in Romania) and Marie, who must manage her residency and tax obligations in both states.

Example 3: non-resident director of a Romanian company

John is a UK citizen, tax resident in the United Kingdom, and serves as a member of the board of a Romanian company. He receives directors’ fees from the Romanian company but has no other activities in Romania.

Romanian domestic rules treat such fees as Romanian-source income. The Romanian company must in principle withhold non-resident income tax on these payments. However, the Romania–UK double tax treaty may either limit the withholding rate or allocate exclusive taxing rights to the state of residence for certain directors’ fees.

If John presents a valid UK tax residency certificate, the Romanian company can apply the treaty provisions and reduce or even eliminate Romanian withholding tax, with the income taxed in the UK instead. In the absence of the certificate, the domestic withholding tax rate applies and John may need to seek foreign tax credit relief in the UK.

Example 4: Romanian digital nomad with an apartment in Romania

Ana is a Romanian citizen and a freelance digital marketing specialist who travels constantly, spending around four to five months a year in different countries. She does not spend more than 183 days in any one state during the year. She owns an apartment in Cluj-Napoca, where she regularly returns, and from which she sometimes works remotely for clients in the US and EU.

Here, the analysis is nuanced:

  • if no other state treats Ana as a tax resident (because she does not stay long enough anywhere), Romania may argue that it remains the state of residence, based on domicile and the centre of vital interests (permanent home in Cluj, personal and economic ties);
  • freelancing income earned by Ana while working from Cluj is likely to be treated as taxable in Romania, either because she is a resident or because she obtains Romanian-source income from services performed in Romania;
  • if Ana rents out her apartment in Cluj, the rental income is unquestionably Romanian-source and taxable in Romania, irrespective of where she physically stays.

Without a clear residency strategy, digital nomads risk being treated as resident in more than one state or in none, which complicates taxation and treaty application. Careful tracking of days, professional advice and, sometimes, deliberately choosing a primary country of residence are key.

Example 5: Romanian in the diaspora with Romanian pensions and dividends

Michael is a Romanian who has been living in Canada for 15 years, where he is a tax resident and receives a Canadian pension. In Romania he still receives a modest state pension and also holds shares in a listed Romanian company, which pays him annual dividends.

In this case:

  • depending on the specific wording of the Romania–Canada double tax treaty, public pensions may be taxable only in the source state or only in the state of residence; the treatment of public and private pensions may differ in the treaty;
  • dividends from the Romanian company are Romanian-source income and subject to Romanian withholding tax; the treaty may cap this tax at a reduced rate if Michael provides a Canadian tax residency certificate;
  • Canada, as the state of residence, will apply its domestic rules to grant foreign tax credit relief for the Romanian tax paid on the dividends.

For Michael, it is important that his Canadian tax residency is recognised by ANAF through the residency certificate, so that he is treated as a non-resident in Romania and taxed only on Romanian-source income.

Conclusions

Tax residency and the concept of Romanian-source income are the building blocks of cross-border personal taxation for Romanians in the diaspora and for foreign individuals with income from Romania. The Fiscal Code, ANAF’s residency guidance and double tax treaties form a complex but coherent framework that determines who pays tax, where and on what.

To avoid unpleasant surprises (retroactive tax assessments, interest, penalties or administrative deadlock), the practical recommendations are:

  • clarify your tax residency status early, by completing ANAF’s arrival/departure questionnaires and obtaining foreign tax residency certificates where relevant;
  • understand which of your income streams are treated as Romanian-source (rentals, salaries, dividends, interest, freelancing, digital service income) and how they are taxed;
  • review the applicable double tax treaty and make sure you provide the documentation needed (residency certificate, treaty forms) to benefit from reduced rates or exemptions;
  • seek specialised cross-border tax advice if you are in a complex situation (dual residency, digital nomad lifestyle, multiple sources of income in different states) or if you receive ANAF queries or assessments regarding residency and Romanian-source income.

If managed properly, your relationship with two or more tax systems can remain predictable and manageable, allowing you to focus on your work and your life rather than on bureaucracy.

Further Reading and Official Sources

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