Tax implications for Romanian citizens who reside or work abroad

The Romanian Ministry of Finance has recently published a proposal for a legislative amendment related to electronic communication by means of the “Virtual Private Space” service .

The proposed amendments give the option to the individuals who have Romanian citizenship and reside or work abroad, after that they have registered themselves in the SPV, to have their details confirmed either  at the consular offices or embassies of Romania in the country where they reside or work or at the Romanian Tax Office. Through these amendments, the Romanian Tax Authorities aim to simplify the communication with Romanian citizens and to reduce the bureaucracy.

Another amendment is related to the documents that will be stored in the private electronic accounts. The novelty consists of the documents related to the tax residency position of the individuals, which will be stored in the account database for a limited period (e.g. 60 days), afterward these being archived.

The most important documents will be the:

  • Tax Residency Questionnaires upon arrival and departure to/from Romania,
  • The Tax Residency notifications,
  • The Tax residency certificates.

Based on the abovementioned documents, the Romanian Tax Authorities will gain higher visibility on the tax residency status of the Romanian individuals who reside or work abroad.

We reiterate that according to the current tax legislation, Romanians who spent abroad more than six months during any period of twelve consecutive months have the obligation to submit a Tax Residency Questionnaire upon departure from Romania. Also, Romanian tax residents should report in Romania the worldwide income derived, while the Romanian tax non-residents should declare herein only the Romanian source income.

The Ministry of Finance estimates that within three months from the publication of the proposed changes in the Official Gazette, the connection of the informatics systems between the National Agency for Fiscal Administration and consular offices or embassies of Romania will be created.