The new income and capital tax treaty, effective from December 2025, replaces the 1975 agreement.
A new income and capital tax treaty between Romania and the UK, signed on 13 November 2024, entered into force on 22 December 2025, replacing the 1975 treaty.
The agreement covers Romanian income and profit taxes, as well as UK income tax, corporation tax, and capital gains tax.
Key provisions include reduced withholding tax rates: dividends generally at 5%, with exemptions for qualifying companies and pension funds; interest at 3%, subject to specific exemptions for intercompany loans, financial institutions, and government entities; and royalties at 3%, with similar intercompany exemptions.
The treaty applies in Romania from 1 January 2026, and in the UK from 1 January 2026 for withholding taxes, 1 April 2026 for corporation tax, and 6 April 2026 for income tax and capital gains tax.
The 1975 treaty ceases to apply once the new treaty becomes effective.
Earlier, the UK ratified the new income and capital tax treaty with Romania through the Double Taxation Relief and International Tax Enforcement (Romania) Order 2025 on 10 December 2025.
