Romania is fast becoming one of Europe’s most attractive destinations for British professionals and remote workers. With its combination of low living costs, reliable internet infrastructure, and proximity to the rest of Europe, it offers a compelling base for expats seeking a new lifestyle.
Yet while the move may simplify daily life, tax obligations between the UK and Romania can quickly become complex. Understanding how residency, income sources, and international agreements interact is key to avoiding double taxation and keeping your finances on track.
1. Understanding UK Tax Residency
In the UK, tax liability depends on residency status, not citizenship.
The Statutory Residence Test (SRT) determines whether you’re considered a UK tax resident, based on:
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The number of days you spend in the UK each tax year;
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Your ties to the UK, such as a home, family, or employment;
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The nature of your work and location of key assets.
If you’re UK resident, HMRC taxes your worldwide income.
If you’re non-resident, only income arising from UK sources (such as rent, dividends, or pensions) remains taxable in the UK.
For many Britons living full-time in Romania, achieving non-resident status can reduce UK tax exposure — but this depends on individual travel and financial patterns.
2. Romanian Tax Residency
Romania’s tax system is managed by the National Agency for Fiscal Administration (ANAF).
You’re generally considered a Romanian tax resident if:
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You spend 183 days or more in Romania during a 12-month period, or
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You maintain a home or centre of vital interests there (e.g., employment, property, family).
Romanian tax residents are subject to tax on worldwide income, whereas non-residents pay tax only on Romanian-sourced income.
The standard income tax rate is 10%, making Romania one of the lowest-taxed EU countries for individuals. However, social security and health contributions may also apply, depending on employment status.
3. The UK–Romania Double Taxation Agreement (DTA)
To prevent taxpayers from being taxed twice on the same income, the UK and Romania have a Double Taxation Convention, originally signed in 1975 and updated since.
The DTA outlines which country has the right to tax specific income categories:
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Government service pensions (e.g., civil or military) are taxed only in the UK.
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Private and occupational pensions are generally taxed in Romania, where you reside.
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Rental income from UK properties is taxed in the UK, but may also need to be declared in Romania for credit or exemption.
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Dividends and interest can be taxed in both countries, though the DTA provides relief through credits for taxes already paid in one jurisdiction.
This treaty is a vital tool for expats, helping to avoid double taxation and clarify where obligations lie.
4. UK Income That Remains Taxable While in Romania
Even after relocating permanently, certain UK income types remain taxable in the UK:
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Rental income from UK property;
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UK government pensions;
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Profits from UK-based businesses;
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Certain dividends and investment gains.
This income must be reported to HMRC via the Self Assessment system. Depending on the type and amount, Romanian residents may also need to include it on their Romanian tax return, claiming credit for UK taxes already paid under the DTA.
5. Filing Taxes in Both Countries
Managing taxes across two systems requires organisation and awareness of deadlines.
In the UK:
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The tax year runs from 6 April to 5 April.
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Online Self Assessment tax returns are due by 31 January following the end of the tax year.
In Romania:
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The tax year follows the calendar year (1 January to 31 December).
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The annual income declaration (Declarația Unică) is typically due by 25 May of the following year.
Because of differing tax year calendars, expats must align reporting periods carefully — and use consistent exchange rates when converting between pounds and Romanian leu (RON).
6. Common Mistakes Expats Make
Expats frequently encounter issues when handling their taxes abroad. The most common errors include:
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Failing to declare UK property income in both countries;
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Not updating HMRC on their non-resident status;
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Overlooking DTA relief, resulting in double taxation;
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Ignoring Romanian social security obligations as self-employed workers;
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Using incorrect currency conversions for income declarations.
Even small missteps can result in penalties or delayed refunds, making accuracy and documentation essential.
7. Digital Filing and Professional Assistance
Both HMRC and ANAF now operate fully digital platforms, allowing tax returns, payments, and documentation to be submitted online — a major benefit for expats living abroad.
However, while technology makes filing easier, interpreting tax treaties, determining residency, and ensuring full compliance remain complex tasks.
This is where professional help proves invaluable.
Specialist advisory firms such as My Tax Accountant assist British expatriates with cross-border tax compliance, including Self Assessment returns, double taxation relief claims, and communication with HMRC. Their guidance ensures that expats in Romania stay compliant without paying more tax than necessary.
8. Financial Planning for UK Expats in Romania
Taxes are just one part of a healthy financial plan. Expats should also consider:
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Pensions: UK State Pensions can be received in Romania, but they’re typically taxable under Romanian law.
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Savings and investments: While ISAs are tax-free in the UK, earnings from them may be taxable in Romania.
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Currency exchange: The GBP–RON exchange rate can affect income value; consider using multi-currency accounts or international banking options.
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Healthcare and insurance: British citizens staying long-term should register for Romanian health coverage or private insurance.
Strategic planning around these areas reduces financial stress and helps ensure that both tax and lifestyle goals align.
9. The Remote Work Advantage
Romania’s high-speed internet and affordable living make it a hotspot for remote workers — including many Britons.
Digital nomads should pay attention to where their income is sourced and where they are tax resident.
For example, working remotely for a UK company while living in Romania may still create tax obligations in both countries. Clarifying residency early, setting up local invoicing where appropriate, and consulting a tax adviser are all smart steps to avoid future complications.
10. Final Thoughts
Living in Romania offers British expats a rewarding blend of affordability, opportunity, and European culture. But financial peace of mind depends on understanding your obligations to both HMRC and ANAF.
By determining your tax residency, complying with both systems, and leveraging the UK–Romania Double Taxation Agreement, you can ensure that you’re not overpaying or risking penalties.
Professional guidance and careful planning make all the difference — allowing you to focus on enjoying life in one of Europe’s most dynamic and underrated destinations.
