If you hold or plan a trust or foundation abroad and are a Romanian tax resident, the question that matters is not the local tax on the structure but your own. As a resident you are taxed on worldwide income — and you face three roles: settlor, beneficiary, and the structure as an entity.
Any correct discussion starts here. Under art. 59 of the Fiscal Code, a Romanian tax resident owes tax in Romania on income from any source, at home and abroad. A foreign structure — trust or foundation — does not change your resident status and does not take the income you realise through it out of the scope of worldwide income. The first trap is precisely the reverse illusion: "the wealth is in a foundation in another state, so it does not concern me for tax in Romania." It concerns you, as long as you are resident.
The first operation is endowing the structure: you transfer money or assets to the trust or foundation. In principle, transferring your own wealth is not, in itself, a taxable event for you — you do not realise income when you move your own assets from one pocket to another. Moreover, unlike many Western states, Romania does not levy a distinct tax on gifts or on wealth transferred between the living: a cash liberality between individuals bears no "gift tax" as such (transfers between close relatives and spouses are expressly exempt from income tax). The transfer of real estate has its own notarial and tax regime, but not a gift tax in the common-law sense.
The trap is a different one, and it is serious: the origin of the wealth transferred must be justifiable. In a review of your personal tax position, the tax authority can ask you to document the provenance of the sums that fed the structure. Sums whose source cannot be identified are taxed at 70% (the rate applicable since July 2024), and from 2026, under ANAF Order no. 768/2026, the competence for these reviews was extended to the Anti-fraud Directorate as well. In other words: it is not the transfer into the structure that exposes you, but the inability to explain where what you transferred came from.
The second capacity is the beneficiary receiving distributions. Here lies the most honest uncertainty in this field. The Fiscal Code expressly regulates only one comparable case: the beneficiary of the domestic fiducia. Sums received by an individual beneficiary from the fiduciary are taxed as income from other sources — except where the beneficiary is the settlor, in which case they are not taxable. The rate for income from other sources is 10%.
For a foreign trust or foundation, Romanian law has no express rule. By analogy with the fiducia regime and within the logic of worldwide income, the most plausible reading is that distributions to a resident beneficiary are income from other sources, taxable at 10%. There is also an alternative reading — characterisation as a gratuitous acquisition — but it is hard to sustain for periodic distributions from a discretionary structure. It must be stated plainly: there is no consolidated, published tax-authority practice settling this characterisation for foreign trusts and foundations. It is unexplored terrain, treated at length in the analysis on recognition of the foreign trust in Romanian law. The prudent position is to treat distributions as taxable income, declare them in the annual return, and keep the documentation showing the nature and origin of the sum.
One further plane determines the final amount: double taxation. If the jurisdiction of the structure withholds tax on distribution and Romania taxes the same income, the question of avoiding double taxation arises. Double-taxation treaties operate by income category, and fitting a trust distribution into one of them is not mechanical. A tax credit for the tax paid abroad may, as the case may be, be available, but it must be justified with documents.
The third plane, the most underestimated, concerns the structure itself. For a foundation — which is a legal person — the question of its tax residence arises directly. If the foundation is effectively managed from Romania (management decisions are taken here, the real administrators are here), it may be classified as tax-resident in Romania on the place-of-effective-management and substance criterion (art. 7 pt. 37 of the Fiscal Code), with its profits taxed in Romania. A "Liechtenstein" foundation in fact administered from Brașov risks becoming, for tax, a Romanian entity. That is why the real substance of the foundation in its jurisdiction of incorporation — directors, decisions, an office — is not a luxury but the condition of the structure's existence.
For a trust — which has no legal personality — the residence question is more complex and without a clear answer in Romanian law. The analysis shifts to the residence and role of the trustee, as well as the degree of control retained by the settlor. A revocable trust, in which the Romanian-resident settlor controls everything, may be seen, in essence, as personal estate — with the attendant risk of tax recharacterisation.
The practical corollary many discover late: the more control you keep over the structure (the right to revoke it, to appoint and remove administrators, to dictate distributions), the more easily it will be treated, on audit, as an extension of your personal estate — cancelling, for tax, the very separation the structure promised. You cannot have both full control and the tax benefit of separation; the choice between them is the very heart of the decision.
A common confusion deserves clearing up. The controlled-foreign-company rules (CFC), in art. 40^5 of the Fiscal Code, do not apply to individuals. The text targets only the "corporate-income taxpayer" — that is, a Romanian company. If a Romanian company controls a foreign structure with passive income above one third of the total, the undistributed profits can be drawn into Romanian tax annually. But if the founder or beneficiary is a resident individual, art. 40^5 does not apply to them — which does not mean they escape everything: they remain fully exposed to taxation of distributions and, above all, to the risk that the structure is deemed tax-resident in Romania on the effective-management criterion.
Taxation cannot be separated from visibility. Under CRS/DAC2, the structure is classified and reported. As a reportable financial institution (typically when managed by a professional and living on financial investments), it reports the settlor/founder, the beneficiaries and the controlling persons; discretionary beneficiaries are reported, in principle, at the value of the distributions actually received. As a passive non-financial entity, the bank where the structure holds accounts reports the controlling persons — settlor, trustee/administrators, protector, beneficiaries.
To this is added FATCA for US persons. The tax conclusion: information on who stands behind the structure reaches the Romanian tax authority through the automatic exchange of information. Any planning that bets on invisibility starts from a false premise.
Distributions characterised as income from other sources are declared in the annual return and the 10% tax is paid.
Wealth transferred into the structure must be documented and kept — it is the first question in a review of your personal tax position.
If you hold financial accounts through the structure, they are visible via CRS; consistency between what you declare and what institutions report is essential.
Tax recharacterisation: a revocable trust or a foundation managed from Romania may be treated, on audit, as if the wealth had never left your estate, or as an entity resident in Romania, with tax consequences. Money laundering: if the origin of the transferred wealth cannot be justified and the sums are later repatriated as "distributions", the operation may be seen as disguising the provenance of funds — a criminal charge autonomous from the predicate offence. These risks are not neutralised by choosing a more discreet jurisdiction, but by substance and documentation.
The practical conclusion is counter-intuitive for anyone seeking discretion in a structure. In an environment of automatic exchange of information, the only sustainable strategy is the opposite of opacity: real substance in the jurisdiction of incorporation, justifiable origin of each asset, declared income and documentation kept. A transparent, well-documented structure is a legitimate wealth-planning instrument; an opaque one is an exposure that activates at the first exchange of information or the first review.
Unsettled terrain calls for heightened prudence, not boldness. The tax treatment of trusts and foundations for Romanian residents is, to a large extent, without published tax-authority practice and without rich case law. Absent clear rules, the individual decisions of the tax authority and the quality of your documentation are what count. Anyone who builds a structure betting on the "grey area" as an advantage is making a risky bet; anyone who builds it documented, with substance and declared income, secures a defensible position. The difference shows only at the first audit — when it is too late to correct it.
Transferring your own wealth is not, in itself, taxable income, and Romania does not levy a distinct gift tax between the living in the Western sense. The risk is not a transfer tax but the impossibility of justifying the origin of the sums: in a review, sums with no identifiable source are taxed at 70%. Document the provenance before you transfer.
Most probably as income from other sources, at 10%, by analogy with the regime of the fiducia beneficiary in the Fiscal Code. There is, however, no published tax-authority practice dedicated to foreign trusts, so the characterisation remains debatable. The prudent position is to declare the distributions as taxable income and keep the documentation.
No, if you are an individual — article 40^5 of the Fiscal Code applies only to corporate-income taxpayers. But if the structure is controlled by your Romanian company, or if it is effectively managed from Romania (risk of tax residence in the country), the analysis changes completely. Your role and the real mode of administration decide.
Distributions are declared when realised, so the timing of declaring income is tied to receiving it. But total silence is risky: if you appear in CRS data as settlor or beneficiary of a structure and the tax authority requests explanations, the absence of any documentation on the origin of the wealth puts you in a weak defensive position. Transparency prepared in advance is cheaper than transparency improvised under audit.
Informational material, updated 18 July 2026. It does not constitute legal or tax advice; individual situations must be analysed case by case.
An initial discussion clarifies how you are taxed across the three roles — settlor, beneficiary, and the structure as an entity — and how to build a defensible, documented position before a review does it for you.