Taxation in Romania: what are the advantages and disadvantages for Digital Nomads?
Romania has made a name for itself as an attractive destination for digital nomads, both because of its favourable economic conditions and its simplified tax regime. With one of the lowest income tax rates in Europe, the country offers tax opportunities that can be interesting for those working remotely. In this article, we'll explore the Romanian tax landscape and how it can benefit digital nomads, as well as considering some factors related to the travelling lifestyle.
1. Overview of Taxation in Romania
Romania offers an attractive tax regime, with a personal income tax rate of 10 per cent, one of the lowest in Europe. In addition, there are specific incentives for start-ups and technology companies, sectors often chosen by digital nomads.
Main taxes:
Individual income tax: 10%
Social security contribution: 37.25%
VAT: 19%
These contributions are levied on the worldwide income of tax residents in Romania. For those spending more than 183 days in the country, it is important to be aware of the definition of tax residence.
2. Tax Incentives for Digital Nomads
Romania has been offering digital nomad visas since December 2021, which are valid for one year and can be renewed at a later date.
In addition, the country offers a number of tax incentives for entrepreneurs and workers in the IT sector, such as exemption from payroll taxes for employees of software companies, making it an attractive destination for remote workers.
3. Tax Residency and Legal Implications
Romanian legislation defines anyone who stays in the country for more than 183 days during the tax year as a tax resident. Digital nomads who decide to stay for longer periods should consider the impact of this rule, as Romania applies taxation on worldwide income.
However, double taxation agreements signed by Romania with several countries can mitigate the tax burden for those with income abroad. Among these agreements, the focus is on avoiding double taxation on income from countries with which Romania has a treaty.
4. Cultural and lifestyle aspects
In addition to the tax advantages, Romania offers a rich cultural experience, with an affordable cost of living and diverse landscapes. Many digital nomads see the country as an opportunity to explore a new part of Europe while enjoying an environment that balances tranquillity and connectivity with the rest of the continent.
Although the nomadic lifestyle offers freedom, it can also involve certain challenges that go beyond the professional sphere, such as adapting to different cultures and finding a balanced routine amid constant changes of environment. By choosing Romania as a destination, digital nomads can find a good balance between work opportunities and an enriching life experience.
5. Final considerations
Romania stands out for its favourable tax regime, with one of the most competitive income tax rates in Europe, as well as tax incentives for the technology sector. Digital nomads looking for a destination with a low cost of living and good infrastructure may find the country an ideal place to stay. It is therefore important to plan not only for tax and legal issues, but also for adapting to the lifestyle and cultural nuances that the country offers.
In order to carry out tax and legal planning for Romania, it is essential to hire a qualified lawyer to avoid tax evasion and double taxation.
If you are interested in hiring professional legal services related to tax planning, we are a law firm specialising in the subject. To do so, please contact us by e-mail: contato@trpuppioadvocacia.com.br, or by WhatsApp.
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