Criteria for establishing fiscal residence for natural persons

Criteria for determining the residence of an individual under the double taxation convention:

If an individual is considered to be resident both in Romania and in a signatory state of the double taxation convention, the residence of the individual is established as follows:

• the natural person is considered to be resident only in the State in which he has his domicile or permanent residence at his disposal. A dwelling is considered permanent if it is the personal property of the individual, if it is rented by the individual or if it remains available at all times to the individual and/or his/her family;
• if the individual owns a permanent dwelling at his disposal in both States, he is considered to be resident only in the State in which he has the centre of his vital interests, i.e. in the State with which his personal and economic relations are closest. If a natural person owns a dwelling in a state which is a signatory to a double taxation convention concluded with Romania and also owns a dwelling in Romania while keeping the former, the fact that he or she keeps the former dwelling in the state where he or she has mainly resided, where he or she has worked and where his or her family and all his or her property are located may, together with other elements, demonstrate that the person has kept the centre of his or her vital interests in the other state, and not in Romania. The same criterion for establishing the centre of vital interests is used accordingly for resident individuals leaving Romania. The centre of vital interests means the place to which the individual’s personal and economic relations are closest. In the analysis of personal relationships, attention will be paid to the spouse’s family, child/children, dependants arriving in Romania with the individual, membership in a charitable or religious organisation, participation in cultural or other activities. In the analysis of economic relations, attention will be paid to whether the individual is an employee of a Romanian employer, whether he/she is involved in a business activity in Romania, whether he/she owns real estate in Romania, bank accounts in Romania, credit/debit cards with banks in Romania;
• if it cannot be determined in which State the person has the centre of vital interests, or if the person does not have a permanent home at his disposal in any of the States, he is deemed to be a resident of the State in which he frequently resides. Thus, account will be taken of the stays that the person has in all places in the same State;
• if the person usually lives in both States or does not live in either of them, the person will be considered to be a resident of the State whose nationality/citizenship he/she holds;
• if the person has the nationality/citizenship of both States or has the nationality/citizenship of neither of them, the competent authorities of the Contracting States will settle the matter amicably at their level, in accordance with the Article “Mutual Agreement Procedure” of the Double Taxation Convention. When determining residence, the comments of Article 4 “Resident” of the Organisation for Economic Co-operation and Development Model Double Taxation Convention will also be taken into account.

Any change that may bring about a change in residence must be notified to the competent central tax authority by the individual concerned.

Arrival in Romania of non-resident individuals:

The main elements that are taken into account for the determination of residence, according to the Tax Code, are:

• domicile in Romania;
• the permanent residence in Romania of the individual, which may be owned or rented or remain available at any time for the individual and/or his/her family;
• centre of vital interests located in Romania;
• the individual is present in Romania for a period or periods exceeding in total 183 days during any period of 12 consecutive months ending in the calendar year concerned.

Other elements that are taken into account when establishing residence in Romania or in the foreign state, but only together with the elements mentioned above:

• vehicle registered in Romania/foreign country;
• driving licence issued by the competent authority in Romania/foreign country;
• passport issued by the competent authority in Romania/foreign state;
• the person is insured with the social insurance system of Romania/foreign state during the whole period of stay abroad/Romania;
• the person is insured with the social health insurance system of Romania/foreign state during the whole period of stay abroad/Romania.

If a non-resident PF does not prove residence in a state with which Romania has a double taxation convention or is resident in a state with which Romania does not have a double taxation convention and fulfils the residence conditions provided by law, it will be considered as resident in Romania.

In this situation, the person concerned has full tax liability in Romania, being subject to income tax on income obtained from any source, both in Romania and outside Romania, starting from the date on which he/she becomes resident in Romania, and will be issued with a tax residence certificate upon request.

We mention that in the tax residence certificate the competent central tax authority  will certify the year/years, respectively the period of the year, for which the individual is resident in Romania.

Completion and submission of the questionnaire for determining the tax residence of the individual upon arrival in Romania:

Individuals who arrive in Romania and have a stay in Romania for a period or periods exceeding 183 days in total, during any period of 12 consecutive months ending in the calendar year concerned, are required to complete the form “Questionnaire for determining the fiscal residence of the individual on arrival in Romania”.

Non-resident individuals must register the questionnaire at the competent central tax office within 30 days after the expiry of 183 days of presence in Romania.

The questionnaire can be downloaded from the portal of the National Tax Administration Agency, www.anaf.ro, section: “Taxpayer assistance”, subsection “Declaration of tax obligations”, heading: “All forms, with explanations” and can be submitted to the registry of the competent central tax authority , in person or by proxy, or can be sent by post, with confirmation of receipt.

The form can also be edited and/or completed by the applicants with the help of the assistance program provided free of charge by ANAF.

The electronic form of the questionnaire is published on the ANAF portal, section “Online services” under the heading “Download Electronic Declarations” – “Download Declarations” and can be downloaded by taxpayers using the following link:

https://static.anaf.ro/static/10/Anaf/Declaratii_R/descarcare_declaratii.htm.

Thus, the form can be found under the following name: – Z015 – Questionnaire for determining the tax residence of the individual upon arrival in Romania. The electronically completed questionnaires are submitted through the portal www.eguvernare.ro, respectively on the ANAF portal, through the link “Submission of Single Declaration and other forms SPV-PF” by persons who are registered in the Virtual Private Space.

Individuals are required to attach the following supporting documents to the “Questionnaire for establishing the tax residence of individuals upon arrival in Romania”:

• copy of passport, valid (European Union citizens attach a copy of passport or valid national identity document);
• copy of identity card/permanent residence card/residence permit/tax registration certificate, issued by the competent authority in Romania;
• documents attesting the existence of a dwelling in Romania of the individual, which may be owned or rented or remain available at any time for the individual and/or his/her family;
• as the case may be, the tax residence certificate issued by the competent authority of the foreign state with which Romania has concluded a double taxation convention or another document issued by an authority other than the tax authority, which has powers in the field of tax residence certification according to the domestic legislation of that state, in original or certified copy, accompanied by an authorized translation into Romanian;
• a document issued by the foreign tax authority certifying that the natural person is removed from its tax registrations , if applicable, accompanied by an authorized translation into Romanian;
• any other documents that may be the basis for determining the residence of the individual. The tax residence certificate issued by the competent authority of the foreign state with which Romania has concluded a double taxation agreement / The document issued by an authority other than the tax authority is valid for the year/years for which it is issued.

Please note that they are not obliged to submit the form “Questionnaire for establishing the tax residence of the individual upon arrival in Romania”:

– foreign citizens with diplomatic or consular status in Romania;

– foreign citizens who are officials or employees of an international and intergovernmental authority  registered in Romania;

– foreign citizens who are officials or employees of a foreign state in Romania;

– members of the families of the above, in compliance with the general rules of international law or the provisions of special agreements to which Romania is a party.

Non-resident individuals who arrived in Romania before 1 January 2014 and who apply for the issuance of the “Certificate of tax residence regarding the application of the Double Taxation Convention/Agreement between Romania and …, for individuals resident in Romania” are required to complete the form “Questionnaire for determining the tax residence of the individual upon arrival in Romania”, and also to provide proof of payment of income tax for income obtained from any source, both in Romania and outside Romania, for the categories of income subject to tax in Romania.

The competent central tax authority , taking into account the provisions of the double taxation convention or the Tax Code as the case may be, the submitted Questionnaire, the tax residence certificate issued by the foreign tax authority or another document (issued by another authority than the tax authority) as the case may be, as well as any other relevant documents, establishes the residence and, within 30 days from the submission of the Questionnaire, notifies the individual whether he/she has full tax liability in Romania or will be taxed only for income obtained in Romania.

 If an individual becomes resident in Romania only for a period of a tax year, this individual has full tax liability in Romania only for that period of the tax year in which he is considered resident.

For the period of the tax year, i.e. from the date of arrival in Romania until the date on which the individual becomes resident in Romania, the individual is considered non-resident, being subject to tax only on income obtained in Romania.

In the event of any changes to the data entered in the notification, as a result of the completion of the documentation submitted by the individual for the establishment of residence upon arrival in Romania with new information/documents, the tax authority issues a new notification and cancels the previous one, for the establishment of the tax liability of the individual in Romania.

A non-resident individual whose centre of vital interests is located in Romania is subject to income tax on income obtained from any source, both in Romania and outside Romania, from the first day on which he declares that the centre of vital interests is located in Romania.

A non-resident individual who is present in Romania for a period or periods exceeding 183 days in total, during any period of 12 consecutive months ending in the calendar year concerned, is subject to income tax on income from any source, both within and outside Romania, starting from the first day of arrival in Romania.

Legal basis:

-ANAF Order 1090 of 9 June 2022 approving the Procedure for communication by electronic means of remote transmission between the central tax authority  and individuals, legal persons and other entities without legal personality;

-Tax Code (approved by Law no.227/2015, published in the Official Gazette no.688 of 10.09.2015), as amended and supplemented;

-Methodological Norms for the application of the Tax Code (approved by HG no.1/2016).