Annual Personal Income Tax obligations

2020 was a busy year from a fiscal perspective, mainly driven by the ongoing COVID-19 pandemic. We know that news is coming in fast, from every direction, and we are trying to support everyone that is going through an intense period regarding their business goals.

In this article, we are going to discuss both the personal income tax return, a very important topic at the start of every year, and the latest legislative changes that are having an impact on this topic.

From 1 January 2021, a change was brought in Law no. 296/2020, which is related to the conditions of establishing the tax residency of the individuals.

Individuals that are having their center of vital interests in Romania will be liable to pay Personal Income Tax starting with the first day declared as having this situation. Also, the individual exceeding 183 days, during any interval of 12 consecutive months, which ends in the calendar year concerned, is liable to pay income tax for all the income (from Romania and abroad), starting with the first day of arrival.

This amendment is important for individuals deemed as tax residents in Romania, as they have the obligation to declare the worldwide private income in Romania, by submitting the Unique Statement by the 25 May of the year following the one in which the income is obtained (previously 15 March). The same deadline is applicable also for the payments of the taxes due.

Having this in mind, we would like to reiterate the types of income that should be declared via the Unique Statement by the aforementioned deadline:

  • rental income;
  • dividend and interest income;
  • capital gains;
  • income from independent activities, etc.

In addition, taxpayers should pay attention to the income from Romanian sources which should be declared, irrespective of their tax residency status.

Concerning the reporting obligations, the filling of the Unique Statement is performed electronically via the Virtual Private Space account or by an empowered person.