A dividend paid from Germany to a Romanian resident. A fee invoiced by a Romanian self-employed person to a client in Italy. An eight-month secondment to London. In each case, two states claim the right to tax the same income. The treaty resolves the contest — but never "by itself": without a residence certificate presented on time, the Romanian payer withholds at the domestic rates.
A double taxation treaty is a bilateral agreement that allocates the right to tax between the residence state of the income recipient and the source state. If you are a foreign investor or an expatriate with income touching Romania, the treaty is the instrument that keeps the same income from being fully taxed twice.
Most of Romania's treaties follow the structure of the OECD Model: separate articles for business profits, dividends, interest, royalties, capital gains, employment income, pensions and other income, plus Article 4 (residence and the tie-breaker rules) and the mutual agreement article.
The hierarchy is set by the Fiscal Code itself: if any provision of the Code conflicts with a provision of a treaty to which Romania is a party, the treaty provision applies (Article 1(3) of the Fiscal Code). The treaty therefore prevails over domestic law — with one essential practical nuance: if domestic law is more favourable than the treaty, domestic law applies. The treaty caps taxation; it cannot make it worse.
Romania has one of the most extensive tax-treaty networks in the region: the treaties cover practically all EU member states and the country's major trading partners. The official list, published by ANAF and updated on 9 January 2026, is the only reference source for establishing whether a bilateral relationship is covered and from what date — it is checked there, state by state, before each payment, because the list is periodically amended.
The United Kingdom. The new treaty, ratified by Law no. 169/2025, entered into force on 22 December 2025 and applies in Romania from 1 January 2026; in the UK, from 1 January 2026 for taxes withheld at source, from 1 April 2026 for corporation tax and from 6 April 2026 for income tax and capital gains tax. Until those dates the old 1970s treaty applies in parallel — a transitional situation that demands care with every payment in the early part of the year.
Andorra. The first Romania–Andorra treaty, ratified by Law no. 170/2025, applies from 1 January 2026.
For income paid from Romania to non-residents, the mechanism is governed by Article 230 of the Fiscal Code: to apply the treaty (or EU law), the non-resident must present to the payer of the income, at the time of payment, the tax residence certificate issued by the competent authority of their state.
Without the certificate, the Romanian payer withholds tax at the domestic rates — in 2026, as a rule, 16%, including on dividends (the dividend tax rate rose from 10% to 16% for dividends distributed from 1 January 2026, under Law no. 141/2025).
Three practical rules follow from Article 230: a certificate presented during the year in which the payments are made is also valid for the first 60 calendar days of the following year, if the residence conditions have not changed; if tax was withheld at the domestic rate and the certificate is presented later, within the limitation period, a regularisation can be made, refunding the difference against the treaty rate; and the more favourable rate always applies among the treaty, domestic law and, where relevant, EU law (for example, the exemptions under the EU directives for payments between affiliated companies).
In the reverse direction — foreign income earned by Romanian residents — it is the Romanian certificate, issued by ANAF on request, that unlocks the reduced rates in the source state. Anyone who has not clarified their tax residence cannot coherently obtain either of the two certificates.
In the article dealing with the elimination of double taxation, the treaty sets out what the residence state does with income already taxed at source. In almost all its treaties, Romania applies the ordinary credit method (Article 39 of the Fiscal Code for companies, Article 131 for individuals): tax paid abroad is deducted from the Romanian tax due on the same income, but only up to the Romanian tax and only up to the rate provided by the treaty. Where a treaty provides for the exemption method, income taxed in the other state is no longer taxed in Romania, but it may be taken into account in setting the rate for the rest of the income (exemption with progression) — relevant mainly historically, as long as Romania has flat rates.
A simple, up-to-date example: a Romanian resident individual receives, in 2026, dividends from a German company. Germany may withhold at most 15% at source (the treaty rate for individuals). In Romania, the tax on foreign dividends is 16% in 2026; through the ordinary credit the German 15% is deducted, leaving a difference of 1 percentage point to pay — plus, separately, the health contribution (CASS) if total non-salary income exceeds the statutory thresholds.
Two practical observations: the credit is granted only on the basis of documents attesting the tax paid abroad; and if the source state withheld above the treaty rate (for instance the full German domestic rate, in the absence of the formalities), the excess is not credited in Romania — it is recovered from the tax authority of the source state. The full filing mechanics are in the guide on declaring foreign income.
The maximum rates the source state may apply to dividends, interest and royalties differ from one treaty to another. A few examples verified against the official texts — with the caveat that, before every payment, the text of the applicable treaty is read, as amended by the Multilateral Instrument where relevant.
Dividends: 5% if the beneficial owner is a company holding directly at least 10% of the payer's capital, 15% in other cases (including individuals). Interest: 3% (with exemptions for certain public or guaranteed financing). Royalties: 3%.
Dividends: 5% (down from 10% under the old treaty); interest: 5%; royalties: 5%. The article on commissions, which allowed 5% source taxation, was removed, and the 183-day threshold for salaries is calculated over any 12-month period, not per tax year.
One of the oldest in force. Dividends: at most 10% of the gross amount. Interest: at most 10% of the gross amount (Article 11(2)), with exemption for interest due to a contracting state or its public bodies and for debts guaranteed, insured or indirectly financed by it. Royalties: 10% for cultural, 15% for industrial.
The rates of the old treaty are no longer the reference for payments from 2026. The new treaty reduces the dividend rate from 10% to 5% of the gross amount, the interest rate from 10% to 3%, and replaces the 10% and 15% royalty rates with a single 3% rate.
Both relationships have relatively recently renegotiated treaties (Spain — new treaty applicable from 2022; UAE — 2015 treaty, applicable from 2017), with reduced source rates; the exact figures are verified against each treaty text before application.
The treaty rate is granted only to the beneficial owner and only if the residence certificate is presented at the time of payment. Otherwise the domestic rate applies, with later regularisation.
IMPORTANT. The treaty rate is a cap on the source state, not the total taxation of the income. An Italian dividend withheld at 5% at source remains taxable in Romania at the domestic rate (16% in 2026), with a credit for the 5%. The treaty eliminates double taxation — not taxation.
The reduced rates for dividends, interest and royalties are granted only to the beneficial owner of the income — the person with the real right to dispose of it, not a mere intermediary or a conduit company interposed to "harvest" treaty benefits. The concept appears expressly in the treaty texts (including the one with Germany) and is reinforced, from Romania's perspective, by domestic anti-abuse rules.
On top of this filter came the BEPS Multilateral Instrument (MLI): signed by Romania on 7 June 2017, ratified by Law no. 5/2022, in force for Romania from 1 June 2022. Under the reservation in Article 35(7), Romania notified the OECD of the completion of its internal procedures on 6 March 2023, and the Ministry of Finance published the synthesised texts for 55 treaties modified by the MLI; in practice, for most covered bilateral relationships, the effects took hold from 2024.
The central change is the principal purpose test (PPT): a treaty benefit is refused if obtaining it was one of the principal purposes of the arrangement or transaction, unless granting the benefit is in accordance with the object and purpose of the treaty. A clause of this kind was included in the new UK treaty as well. In concrete terms: a structure without economic substance, built solely for the reduced rate under a treaty, may be left without its benefits — an analysis already present in Romanian practice, including on the relationship with the United Arab Emirates. Cross-border arrangements with specific hallmarks may separately trigger DAC6 reporting obligations.
A transfer-pricing adjustment in the other state, a double classification of residence, a contested permanent establishment — the specific solution is the mutual agreement procedure (MAP) between the competent authorities. The Romanian framework was modernised by Government Ordinance no. 11/2025 (Official Gazette no. 695 of 24 July 2025), which restructured Article 282 of the Fiscal Procedure Code (the CPF, the statute governing tax procedure) along the lines of Article 25 of the OECD Model.
The request is filed, as a rule, within 3 years of the communication of the tax administrative act or of another notice of the measure generating taxation not in accordance with the treaty — the Romanian statutory limit extending the shorter limits in some treaties.
The procedure is available regardless of the domestic appeals pursued and even before double taxation has actually occurred, if the actions of one state make it likely.
For Romania this is ANAF, which first attempts a unilateral resolution and then negotiates with the other state.
It is implemented through a resolution decision, which may amend or annul the original tax administrative act.
If the statutory conditions are met, the Romanian authority is obliged to proceed to arbitration; for disputes with EU member states there is also, in parallel, the mechanism of Directive (EU) 2017/1852 on the resolution of tax disputes.
The most frequent error among Romanian payers: on audit, the difference up to the domestic rate is assessed against the payer, with ancillary charges.
The "under 183 days, no host-state taxation" rule works only if the other conditions are also met cumulatively: the remuneration must be paid by an employer who is not a resident of the host state and must not be borne by a permanent establishment there. Recharging the salary cost to the host entity frequently overturns the conclusion from day one.
Older treaties count the 183 days per tax year, modern ones over any 12-month period — this was precisely one of the changes in the new treaty with Italy.
Tax withheld abroad does not discharge the Romanian filing obligations: the income is declared, and the credit is claimed expressly, with documents.
Romania credits at most the treaty rate; the rest is recovered from the source state, through its own refund procedures.
After the MLI/PPT and under the beneficial-owner filter, the reduced rate "via Cyprus or Dubai" without economic reality is vulnerable, retroactively, on audit.
For payments in 2026, without checking the transitional regime — an error that propagates through every withholding of the year.
On the official ANAF list, updated on 9 January 2026, and check whether the relationship is covered by the MLI (the synthesised text published by the Ministry of Finance).
Of everyone involved, and obtain the tax residence certificate valid for the year of payment — before the first payment, not after.
Under the correct treaty article (dividend, interest, royalty, business profit, salary) — a wrong classification changes the whole regime.
Comparing the treaty with domestic law and, where relevant, with the EU directives; apply the most favourable option.
The withholding at source (contracts, certificates, proof of tax paid) and declare in the residence state, claiming the credit or exemption.
Assess the mutual agreement procedure within the 3-year limit — separately or in parallel with the domestic challenge.
One last marker: the treaty does not make you invisible. Data on foreign accounts reaches ANAF through CRS/DAC2, and data on crypto-assets will reach it through DAC8. The treaty establishes who taxes and how much — not whether it is declared.
No. Without a certificate presented at the time of payment, the domestic rate is withheld (16% for dividends distributed from 2026). If the certificate is presented later, within the limitation period, the difference can be regularised and refunded.
As a rule, yes — at least the obligation to declare. Romania grants a credit for tax paid at source, up to the treaty rate and the Romanian tax; if the Romanian tax is higher, you pay the difference. The health contribution (CASS) may be due separately, because it is not covered by treaties.
No. The treaty allocates taxing rights and eliminates double taxation, but the filing obligations remain governed by domestic law: the annual income return (Declarația unică / D212) for individuals, the withholding-tax returns for payers.
First check whether the double taxation is corrected through the credit or exemption in the residence-state return. If not, you have the mutual agreement procedure available — a request to ANAF within 3 years of the act that generated the non-compliant taxation — and, for EU states, the mechanism of Directive 2017/1852 as well. Domestic remedies (challenge, court) remain available in parallel.
Informational material, updated on 18 July 2026. It does not constitute legal or tax advice; individual situations must be assessed case by case.
Time limits run from the moment of communication. An initial discussion clarifies what is alleged, what you need to justify and how the defence is built — before an estimate becomes a tax assessment.