Taxation of non-residents in Romania

Latest changes in the Romanian taxation system introduced several aspects related to non-resident taxpayers conducting their business in Romania through one or more establishments which are permanent. We published all needed details in here and, in this present article, we intend to explain different circumstances related to taxation procedures applied to individuals and companies in our country. All aspects that we will bring to your attention relate to specific provisions delivering information for both singular persons and legal entities. The regime of non-resident taxpayers in Romania clearly specifies that a 16% tax generally applies to income coming from activities conducted in Romania or from other income sources located in this perimeter. Double tax treaties may imply the adjustment of certain taxes or even the cancellation. These measures apply to particular income elements such as those deriving from partnerships settled in Romania, from dependent activities or correlated to real estates in this country or from shares sold. As mentioned form the beginning here are included as well the amounts of money coming from commercial activities conducted through permanent establishments. Income originating from a liquidation process of a company which is Romanian, from other different independent professions carried out on this territory and from sports or other activities of this type performed here are subject to taxation according to laws applicable for non-residents. Members and founders of board of directors in a Romanian company, as well the administrators, are subjects to taxation through the profits obtained from their positions. These taxes apply also to dividends, interests and royalties provided by a resident person but as well for those paid by non-residents only if they own a permanent establishment in Romania and the sums related are expenditures of these establishments. A 25% rate is applied to all gains coming from gambling while capital gains are subject to the same treatment applied in the case of resident individuals.

Tax laws in Romania – taxation of non-resident companies

The taxation procedures include those entities which are indeed non-resident but the income subject to taxation is obviously obtained in Romania. There are several distinguishing ways in which a foreign company may become subject to taxation in this perimeter. Taxation of non-residents in Romania specifies that in order for a company to become subject to taxation it has to own a branch office or a representative office. We are talking here also about the case when a foreign company becomes subject of withholding taxes. Thus non-resident companies in our country which do not own permanent establishments are required to pay this withholding tax which generally derives from interests, commissions or royalties. There are types of income which are to be considered exceptions and these special cases involve non-residents from states which do not own an agreement with Romania concerning the exchange of information. EU stipulations are frequently interfering in national policies concerning the withholding tax. We also recommend the article regarding the double taxation treaties in order to properly understand the circumstances. Our expert lawyers working in the corporate and commercial department are available for future information related to corporate tax compliance in the case of non-resident companies. The team in this department has intensively assisted in numerous company creation processes being able in this manner to indicate specific aspects immediately related to taxation issues.