If you are a Romanian tax resident with property abroad, paying the local tax and filing the local return does not close the matter. The rent arrives monthly, the local tax is up to date — yet "I paid there, so I owe nothing here" is exactly the reasoning that generates, year after year, the most tax assessments on foreign income.
A Romanian tax resident owes tax in Romania on income from any source, at home and abroad (Article 59(1) read with Article 130(1) of the Fiscal Code). The fact that the state where the property sits taxed first does not exempt you from declaring — it only changes how much more you pay here.
All of Romania's double taxation treaties follow, on this point, Article 6 of the OECD Model: income from immovable property is taxable in the state where the property is located. It is a rule of administrative common sense — the property cannot move, and the state of location is best placed to tax it.
But note the wording. The treaties say this income "may be taxed" in the state of location — not "only in the state of location". The difference is decisive: Romania, as the residence state, keeps its right to tax the same income, with double taxation then removed through the dedicated treaty article. That is where everything is decided.
Romania's treaties use two mechanisms. The tax-credit method: Romania calculates its own tax and deducts the tax paid in the other state, but only up to the Romanian tax attributable to that income. The exemption method: Romania does not tax the income at all (Article 7 points 19 and 20 of the Fiscal Code).
The treaty signed in Bucharest on 18 October 2017, ratified by Law no. 309/2018, in force from 14 January 2021 and applicable to income from 1 January 2022, provides in Article 21 the credit method for Romanian residents.
The treaty signed in Berlin on 4 July 2001 (Law no. 29/2002) provides in Article 23(1) the credit method for Romanian residents. The symmetry is missing: for German residents, the same treaty uses exemption with progression.
The treaty signed in Riga on 25 April 2015 (Law no. 28/2016), applicable from 1 January 2018, also provides in Article 23 the credit method for Romanian residents.
The classic example (Law no. 85/1994, Article 23), which ANAF itself uses didactically for the sale of a property located there: the income is declared, but the tax due in Romania is zero.
The agreement signed in Dubai on 4 May 2015 (Law no. 26/2016), applicable from 1 January 2017, uses the credit method for Romania. The consequence is counter-intuitive and costly — see below.
Since the UAE does not tax an individual's rent, there is no foreign tax to credit, and the Romanian tax is paid in full. "I have a property in Dubai, so I pay no tax" is, in tax terms, exactly the reverse.
IMPORTANT: The method is not chosen — it is read from the applicable treaty and applied per country and per nature of income. The electronic form of the annual return asks you to tick the method; a wrong tick produces a wrongly calculated tax, which ANAF can later correct, with interest and late-payment penalties.
The tax credit is granted only if there is a treaty with the state concerned and only if the tax was actually paid and is proven by a supporting document (Article 131(3) of the Fiscal Code). Tax paid in a state with which Romania has no treaty is not taken into account at all — it is lost.
Income from letting property earned abroad is declared in the annual income return (Declarația unică, form 212), Chapter I, the section on income earned abroad, separately for each source country and each nature of income, by 25 May inclusive of the year following the year earned (Article 130(4) of the Fiscal Code).
The base is determined under the rules of the corresponding category of Romanian law (Article 130(2)). For rent, the usual regime in 2026 remains the 20% flat deduction: net income = gross income − 20% flat expenses, with the tax being 10% applied to the net income — that is, 8% effectively of the gross. The 20% is recognised automatically, with no supporting documents.
Long-term rent (letting property) or short-term accommodation through platforms. The regimes differ: for touristic letting, Law no. 239/2025 introduced from 1 January 2026 a distinct article in the Fiscal Code, with a 30% flat deduction and a 10% rate. The domestic rule is, however, built for personally owned dwellings, and classifying a property located abroad under this regime, through the mechanism of Article 130(2), is settled case by case — do not assume either its application or its non-application without prior analysis.
Calculate the annual gross income in the foreign currency, then convert it into lei at the annual average exchange rate of the currency market communicated by the BNR (National Bank of Romania) for the year earned (Article 131(6)) — not at the rate of the day of receipt.
20% flat expenses, then 10% tax on the net income. The option for the real system exists in domestic law (Article 84), but requires accounting kept under Romanian rules; exercising and documenting it for foreign-source income is clarified in advance with the competent tax office, before building the records on that basis.
And tick it correctly in the form. On ticking the exemption method, the form automatically generates a figure of 0 for the tax due, but the "income tax paid abroad" field is still completed.
Where applicable: at the level of the tax paid abroad, but limited to the Romanian tax attributable to that income. If the foreign tax is higher, the difference is not refunded and not carried forward.
A supporting document issued by the foreign tax authority or, failing that, a copy of the tax return filed there together with proof of payment (Article 131(3)). The documents are kept by you, not filed. File through the SPV portal and keep the receipt.
Under the 20% flat rate no tax loss can be recorded: net income is, by construction, 80% of gross. Where the law allows foreign-source losses to be carried forward, the rule is restrictive — offset within 70% of the annual net income of the same nature and source, earned abroad, per country, over the following 5 consecutive tax years (Article 118(7)). Offsetting between countries is not permitted.
Rent enters the base of the health-insurance contribution (CASS), alongside dividends, interest, investments and other sources (Article 155 of the Fiscal Code), and the foreign source does not change this: if you are a Romanian tax resident, foreign income is cumulated with domestic income for testing the thresholds.
The benchmark for 2026 is the minimum gross wage in force on 1 January 2026, RON 4,050. The increase of the minimum wage to RON 4,325, applicable from 1 July 2026, does not affect the thresholds for 2026 income: the reference rule is the minimum wage in force on 1 January of the year earned. CASS is due if total net income reaches 6 minimum wages (RON 24,300), and the base is the bracket reached:
Remember: the foreign tax credit works only for income tax. CASS is not credited with anything you paid abroad.
Here lies the most serious misunderstanding in practice. Article 13 of the OECD Model attributes to the state of location the right to tax gains from the alienation of immovable property. Romania taxes as well, as the residence state, but not on the logic of a capital gain.
Article 111 of the Fiscal Code does not limit the tax to property located in Romania and does not speak of a gain: on the transfer of ownership of buildings and land, the tax is calculated on the transaction value, applying rates of 3% (property held up to 3 years inclusive) or 1% (held over 3 years). The purchase price, the notary, the commission, the renovations — nothing is deducted. The RON 450,000 relief was removed for transfers after 2022 and no longer exists in 2026.
In practice, for a Romanian resident who sells the Spanish flat for EUR 200,000 after 5 years of holding, Romania calculates 1% of EUR 200,000 (converted into lei at the BNR annual average rate) — regardless of whether the sale was at a loss. The Spanish tax on the gain, actually paid and proven, is credited, but only up to the Romanian tax. In practice, the tax in the state of location frequently exceeds 1%–3% of the price, and the result in Romania is nil to pay. But the declaration remains mandatory, and if you sell a property in a state that does not tax the gain, you pay in full here.
The minimum value from the market study of the chambers of public notaries (Article 111(4^1)) concerns the Romanian real-estate market. For a foreign property, the base is the value declared in the transfer deed, supported by documents.
The usual mechanism (Article 111(6)) assumes calculation and collection by the notary. For foreign property, the income is declared by the taxpayer in the annual return, by 25 May of the following year — ANAF expressly lists "the transfer of immovable property from personal assets" among the categories of foreign income declared in the D212.
The Spanish IBI, the Italian IMU, the German Grundsteuer, the Dubai municipal fee, the waste charge — all are property taxes or local charges, not income taxes. Article 131(1) allows the credit exclusively for income tax paid abroad, on the same income and the same taxable period.
The consequence: these sums do not reduce the tax due in Romania at all, and they are not deducted from the rent as long as you apply the 20% flat rate — they are already deemed covered by the flat deduction. It is a real double economic burden, but perfectly lawful.
The automatic exchange of information between EU states covers five categories, among them income from immovable property and ownership of immovable property. The state where you own the flat reports to ANAF, without a prior request.
Platform operators (Airbnb, Booking and others) have reported, since 2024, the hosts' identification data, the income received, the addresses of the let properties and the rental durations. A flat let touristically in Barcelona by a Romanian resident is visible this way.
The account into which the rent flows is itself reportable: balance, interest, gross proceeds. The details, in the dedicated analysis on the automatic exchange of information.
Administrative cooperation also allows specific checks, on request.
Domestically, ANAF Order no. 768/2026 extended the competence for personal tax-position reviews to the Antifraud structures, and income whose source cannot be identified is taxed at 70%. An undeclared foreign property, bought with sums of undocumented origin, opens exactly this kind of analysis.
Regulation (EU) no. 650/2012 sets the civil law applicable to a succession and the competence of the authority that administers it — but it expressly excludes tax matters from its scope. So the fact that the succession is administered in Romania does not move the taxes: the state where the property sits applies its own inheritance or gift tax (Spain and Italy have one, Germany too, with thresholds and rates depending on the degree of kinship and the region).
In Romania, an inheritance is not taxable income, and sums received from abroad under that title have the same treatment as domestic ones. Two rules remain to be watched: Article 111(3) — for transmission by inheritance no tax is due if the succession is finalised within 2 years of death, while beyond that term the heirs owe 1% of the value of the estate; and Article 111(2)(b) — gifts between relatives and in-laws up to the third degree inclusive, and between spouses, are exempt.
Applying these two rules concretely when the estate includes property located abroad, administered by a foreign authority, raises questions the text does not settle explicitly — from the moment at which "finalisation" of the succession is counted, to the way the value of the estate is determined. It is a situation to be assessed specifically, before the 2 years expire, not after.
The filing obligation stands regardless of the method — including when the exemption brings the tax to zero.
Romania taxes the transaction value, not the gain. The 1% or 3% rates apply to the price.
In the tax-credit calculation. IBI, IMU and Grundsteuer are not income taxes and are not credited.
Due on the thresholds even if income tax came to zero through the credit. CASS is not credited with anything paid abroad.
The day's rate instead of the BNR annual average rate of the year the income was earned.
Not permitted. The carry-forward is per country, against income of the same nature and source.
Yes, if you are a Romanian tax resident. The annual return is filed regardless of the double-taxation-elimination method. In Spain's case the credit method applies: you will pay in Romania only the difference, if the Spanish tax is lower than the Romanian one. If it is higher, the tax to pay in Romania is zero — but the return is still filed.
You risk assessment on the authority's own initiative for the non-time-barred period, with interest and penalties, and the information on immovable-property income reaches ANAF through DAC1. The reasonable solution is a corrective annual return for each year concerned, with the Italian tax-payment documents kept in your file, before a notice or an audit. Acting on your own initiative counts in setting the penalties.
The Article 111 rate applied to the transaction value: 3% if you held it up to 3 years inclusive, 1% if you held it over 3 years. Since the UAE levies no comparable income tax on this operation, you have nothing to credit, so the amount is paid in full in Romania. It is declared in the D212, by 25 May of the following year.
Not automatically — and usually the situation worsens. The transfer changes the regime, may itself generate a taxable event in the state of location, and if the foreign company is effectively managed from Romania it becomes tax resident here, with its profits taxed in Romania. It is a decision to be taken after specific analysis, not as a reflex of optimisation.
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.