The document discusses Romania's withholding tax on revenues earned by non-residents, including what incomes are subject to the tax, exemptions, conditions for applying double taxation treaties to lower rates, requirements for registering contracts with non-residents, and taxation of permanent establishments in Romania.

1. Eliminating Romanian withholding tax on
revenues of non-residents
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2. AGENDA
1. Taxpayers of withholding tax in Romania
2. Taxable incomes in Romania, subjects of the withholding tax
3. Quota of the witholding tax
4. Exemptions
5. Conditions for applying the Double Taxation Treaties
6. Certificates of attestation for paid withholding tax in
Romania
7. Registration to the fiscal authorities of contracts concluded
with the non-resident persons
8. Incomes of a permanent establishment in Romania
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3. 1.Taxpayers of withholding tax in Romania
• Nonresidents obtaining taxable incomes from
Romania.
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4. 2. Taxable incomes in Romania, subjects of the
withholding tax
• Dividendes
• Interests
• Royalties
• Comissions
• Incomes from management and advisory services in any area of
activity
• Incomes from other services rendered in Romania, exclusively
international transport
• Incomes from prizes from competitions organized in Romania
• Incomes from gambling
• Incomes realized by the nonresident persons from the liquidation
of a Romanian legal person
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5. 3. Quota of the withholding tax
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6. 4. Exemptions
• Incomes obtained by the non-resident persons for advisory
activities in Romania in free grant agreements concluded by the
Romanian Government / public authorities with other
governments / public authorities or international organizations
• Prizes obtained by a non resident person in Romania from
sportive and cultural activities
• Prizes obtained by students
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7. 4. Exemptions
• Incomes from interests or royalties obtained by a resident legal
person of EU or European Free Trade Association are exempt if
the beneficial of interest or royalties owns at least 25% of the
value / number of shares in the Romanian legal person for an
uninterrupted period of at least 2 years ending on the date of
payment of interest or royalties
• Interest and / or dividends paid to pension funds as defined in
the legislation of the Member State of the European Union or in
one of the European Free Trade Association Member.
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8. 4. Exemptions
• Dividens paid by a Romanian legal entity to a European Union or
European Free Trade Association resident legal entity if there are
respected cumulatively the following conditions:
 Non-resident:
 It is a profit tax payer (or similar)
 Owns at least 10% of the share capital of the Romanian legal person
for a period of at least 2 years at the date of the dividend payment
 Romanian payer:
 It is a company incorporated under Romanian law (SRL, SA)
 It is a profit tax payer
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9. 5. Conditions for applying the Double Taxation
Treaties
Romania has concluded 86 Double Taxation Treaties.
• If a taxpayer is a resident of a country with which Romania has signed an
agreement to avoid double taxation, the tax rate applicable to the taxable
income obtained from Romania cannot exceed the percentage settled by the
Treaty.
• If a taxpayer is resident of an EU state, for incomes obtained from
Romania it is applicable the more favorable tax rate between the Romanian
Tax Code, EU legislation an the Double Taxation Treaty.
• For applying the Double Taxation Treaty, the non-resident taxpayer
should present valid fiscal residence certificate
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10. 5. Conditions for applying the Double
Taxation Treaties
• If the withholding tax already paid was higher than the
percentage settled by Double Tax Treaty, respectively
EU legislation, the amount paid in excess can be
reimbursed, at the request of the taxpayer
• The income payers must submit to the fiscal
authorities a yearly return regarding withholding tax,
nominating each non-resident obtaining incomes.
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11. 6. Certificates of attestation for paid withholding
tax in Romania
• The certificates of attestation for paid withholding tax
paid by the non-resident persons are issued by the
Romanian fiscal authorities, at the payers’ request.
• Based upon this certificate, non-residents prove in the
origin country that the tax was paid for the incomes
obtained in Romania in order to avoid double taxation
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12. 7. Registration to the fiscal authorities of the
contracts concluded with the non-resident persons
• Contracts concluded between a Romanian entity and non-
residents (physical persons or legal entities) as suppliers
for rendering services in Romania, must be registered at
the fiscal authorities
• A declaration containing details from contract, must be
submitted within 30 days since the agreement.
• Additionally, for amendments of clauses regarding
amounts or dates in the contract, it must be submitted an
update of initial declaration, within in 30 days.
• The fines for not declaring within legal due date of 30 days
are between 1.000-5.000 RON (250-1.050 EUR)
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13. 8. Incomes of a permanent establishment in
Romania
• The foreign legal persons which performs activities through
a permanent establishment in Romania have to pay profit
tax (16%) on taxable income that is attributable to the
permanent establishment.
• For transactions performed between the foreign legal person
and its permanent establishment, and between this one and
any other affiliated person it should be prepared transfer
pricing file
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14. Our Profile
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15. Our Profile
• A regional certified public accounting company
specialised in assurance services;
• Headquarters and management in Cyprus;
• Operates in South East Europe;
• Independent member of BKR International.
• Independent member of Lexbridge LLC
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16. Our Services
• Audit & Assurance Services
• Corporate & Personal Taxation
• Business Advisory Services
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17. Our Offices in the Balkans
Headquarters:
Cypress Centre
5 Chytron str., 4th floor,
PC 1075
PO BOX 24885,
PC 1305
Nicosia, Cyprus
Tel: +357 22 699 000
Fax: +357 22 699 001
www.euglobal.eu
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18. Q&A
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19. Our Profile
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