Romania's Tax Treaties and a Property There: How Israel, Germany, France, the UK and the UAE Prevent Double Taxation

For an Israeli buyer living in Israel, one treaty is usually enough: the one between Israel and Romania. But many transactions include a partner living in Germany, a sister who moved to France, a son living in London, or an owner who relocated to Dubai. Then the same property has several owners, each of them under a different treaty.

We will start with Israeli residents, explain the difference between the two methods that prevent double taxation, go through the four other countries, and only then set out exactly what Romania collects. This guide does not replace tax advice in the country of each of the owners.

1What is the rule common to all the treaties?

The first right to tax income from real estate belongs to the country in which the real estate is located. In the five treaties reviewed here, Romania's with Israel, Germany, France, the United Kingdom and the United Arab Emirates, this rule appears twice: in Article 6, which deals with income from immovable property including rent, and in Article 13, which deals with capital gains on sale. None of the treaties reduces the tax Romania collects on real estate. What changes is what the country of residence does afterwards.

2What does this mean for Israeli residents?

Article 24 of the treaty between Israel and Romania provides that Israel will recognise the tax paid in Romania as a credit, in accordance with Israeli law, and not beyond the amount of tax Israel itself levies on the same income. The rent and the gain on sale are reported in Israel.

With rent there is a trap: the track you choose in Israel affects entitlement to the credit. Anyone who chooses the 15% track under section 122A of the Income Tax Ordinance will not receive a credit for the Romanian tax.

The treaty, signed on 15 June 1997 and applicable from 1 January 1999, was amended by a protocol signed on 3 November 2020 and applicable in Israel from 1 January 2024. It is worth checking with your adviser whether the amendment is relevant to your situation.

3Credit or exemption: what is the difference?

In the United Arab Emirates the answer depends on local law, as explained below.

4And what about partners living abroad?

Dubai and the other Emirates. The treaty was signed on 4 May 2015 and ratified in Romania by Law 26/2016. A person is considered a resident of the Emirates according to their permanent home (domicile) as defined by the law there (Art. 4(1)(b)). The question of relief, by credit or by deduction, is referred by the treaty to the law of the Emirates (Art. 22(b)). In practice, the tax collected in Romania is often the only tax on the income from the property. It is worth keeping a tax residence certificate from the Emirates, and checking with an adviser, especially when the property is held through a company.

United Kingdom. The 1975 treaty has been replaced by a new treaty signed on 13 November 2024. According to GOV.UK, it entered into force on 23 December 2025; in the United Kingdom it applies to income tax and capital gains tax from 6 April 2026, and in Romania from 1 January 2026. For earlier years the old treaty continues to apply. Article 21 provides for a credit in the United Kingdom for the Romanian tax, in accordance with UK law, and Article 13(4) allows Romania to tax a gain on the sale of shares more than half of whose value derives from real estate in Romania. The question for the UK adviser: how the credit works when Romania taxes the price and the United Kingdom the gain.

France. The treaty was signed on 27 September 1974 and entered into force a year later. Under Article 24(2)(a), income that Romania may tax is exempt from the French income taxes listed in the treaty, except for dividends, interest, royalties and certain other types that receive a credit. Rent and gains from immovable property fall within the exemption. Article 24(2)(c) allows France to set the tax rate on the remaining income according to total income ("taux effectif"), so rent from Romania can raise the rate. Two questions are worth putting to the French adviser: how the prélèvements sociaux apply, and whether the property falls within the real estate wealth tax (IFI), since the treaty has a separate article on capital (Art. 23).

Germany. The treaty was signed on 4 July 2001. Article 23(2)(a) exempts in Germany income that Romania may tax, as long as it does not appear in the credit list of Article 23(2)(b). Rent and a gain on the sale of the property itself are not on the list and are therefore exempt, whereas a gain on the sale of shares in a company whose assets are mainly immovable property (Art. 13(2)) is on the list and receives a credit. The treaty allows Germany to take exempt income into account in setting the tax rate, but German law excludes from this rent from a property in another EU state (section 32b(1), second sentence, of the Income Tax Act), and Romania is an EU member. For the German adviser (Steuerberater): whether progression applies to a gain on sale, and what must be reported even when the income is exempt.

5How much does Romania collect, and when?

As far as Romania is concerned, an owner who is a non-resident is taxed on rent and on sale exactly like a local owner (Fiscal Code, Law 227/2015, Art. 223(2)(g)). According to the source, these are the rules in 2026:

Holding through a company does not necessarily solve this: under most of the treaties, a gain on the sale of shares in a company whose value derives mainly from real estate in Romania may also be taxed there. The decision between private ownership and ownership through a company is made with advisers before signing.

6What if you live in two countries?

All the questions above start with the question of where you are tax resident. A prolonged stay in Romania may make you tax resident there too, and in such a case Article 4 of each treaty determines which country is considered the country of residence for treaty purposes. Israelis planning a move need to examine this with respect to both countries.

7What to do before buying, and how we help

1. Identify for each owner the treaty that applies to them, and its Articles 6 and 13.
2. Find out whether each owner's country of residence gives a credit or an exemption.
3. File every document evidencing tax paid in Romania, on rent and on sale. Without receipts there is no credit.
4. Prepare a tax residence certificate, in case a Romanian tenant or ANAF requires it.
5. Set the ownership structure before signing, with an adviser in each relevant country.
6. Plan the future sale in advance with both advisers, because each country measures it differently.

Where there are owners from different countries, we help build the ownership structure and the contracts so that each of them can approach their own tax adviser with clear documents. The tax advice itself is given by qualified advisers in each country, and acts under Romanian law are carried out by a notary and by lawyers licensed in Romania.

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The information in this guide is general in nature and does not constitute legal or tax advice on any specific transaction. Every transaction is assessed on its own facts.