webinar slides romania withholding tax
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Euroglobal Audit& Advisory - Romanian WHT- webinar slidesTRANSCRIPT
Eliminating Romanian withholding tax on revenues of non-residents
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Your Single Professional
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AGENDA
1. Taxpayers of withholding tax in Romania2. Taxable incomes in Romania, subjects of the withholding tax3. Quota of the witholding tax 4. Exemptions5. Conditions for applying the Double Taxation Treaties6. 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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• Nonresidents obtaining taxable incomes from Romania.
1.Taxpayers of withholding tax in Romania
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• 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
2. Taxable incomes in Romania, subjects of the withholding tax
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3. Quota of the withholding tax
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• 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
4. Exemptions
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• 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.
4. Exemptions
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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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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
5. Conditions for applying the Double Taxation Treaties
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• 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.
5. Conditions for applying the Double Taxation Treaties
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• 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
6. Certificates of attestation for paid withholding tax in Romania
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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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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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Q & A
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