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- 08/02/2012 FTT Will Hit UK Revenues Even With Opt Out
- 18/01/2012 EU Tax Burdens Stabilize
- 02/01/2012 Romania Receives World Bank Support For Fiscal Agenda
- 04/10/2011 Huge Variations Seen In Global Corporate Tax Rates
- 05/09/2011 Switzerland Submits 6 DTAs For Approval
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Romania Tax News »
Treaty Update:
Guernsey - Romania
16/12/2011
According to preliminary media reports, Romania's parliament on December 7, 2011, ratified the TIEA signed between Romania and Guernsey earlier this year.
Treaty Update:
Romania - Switzerland
25/10/2011
According to preliminary media reports, the lower house of Romania's parliament, the Chamber of Deputies, on October 12 approved a law ratifying a protocol to the DTA signed between Romania and Switzerland.
Treaty Update:
Luxembourg - Romania
10/10/2011
According to preliminary media reports, a protocol amending the 1993 DTA between Luxembourg and Romania was signed on October 4, 2011.
More
Romania Tax Treaty Updates from TreatyPro »
Romania
Knowledge Base
Romania
as a united entity (comprising the principalities
of Moldavia and Wallachia) formed in the
late 1850s, emerging from Ottoman rule,
and taking its current name shortly thereafter.
Its independence was recognised in 1878
by the Treaty of Berlin.In the First World
War, Romania joined the Allied Powers, gaining
control of Transylvania afterwards. Romania
initially fought on the side of the Axis
powers in WWII, although it later joined
the Allies, and was occupied by the Soviet
Union during and after the war, finding
itself increasingly under Communist influence,
leading to the formation of the ‘People’s
Republic of Romania’, and the abdication
of the king. Nicolae Ceausescu, in power
from 1965 (until his overthrow and execution
in 1989) oversaw decades of oppression and
increasing poverty. The influence of Communism
continued to dominate in the country until
the mid-1990s, but. since 1996, Romania
has increased ties with Western Europe.
It joined NATO in 2004, and the European
Union in 2007. Romania has a land area of
238,391 sq km, and is situated in South
Eastern Europe, bordering the Black Sea,
between Bulgaria and Ukraine. The population
of Romania was estimated, in 2009, at 22,215,421.
[Further
Information]
The
capital of Romania is Bucharest, and the
country is divided into 41 counties. The
head of state is the President, which since
December 2004 has been Traian Basescu, although
he was suspended by a parliamentary vote
in April 2007, but reappointed after a referendum
the following much. The Prime Minister is
the head of government, and is appointed
by the President. Since December 2004, Calin
Popescu has been the Prime Minister. The
bicameral Parliament comprises the Senate
(or Senat) and the Chamber of Deputies.
The legal system is based on civil law,
and has not accepted compulsory ICJ jurisdiction.
[Further
Information]
Romania
joined the European Union in 2007, and after
decades under Communist rule, and a period
of oppression and poverty under the regime
of Nicolae Ceausescu (until his overthrow
and subsequent execution in 1989), the country
has increased ties with Western Europe,
and is increasingly embracing free market
policies. GDP was estimated at USD271.4
billion in 2008. However, GDP growth has
slowed subsequently, as the Romanian economy
felt the impact of the international financial
crisis. The Romanian authorities hope to
be ready to adopt the euro in 2014.
[Further
Information]
Company
forms available in Romania, include the
Limited Liability Company (SRL), the Joint
Stock Company (SA), the General Partnership
(SNC), Limited Partnership (SCS), and Partnership
Limited by Shares (SCA). Sole Proprietorships,
Family Associations, and Branches also exist.
The most commonly used company for resident
businesses is the Limited Liability Company, which
must have minimum authorised share capital
of RON200, and can have just one shareholder.
[Further
Information]
The
corporate income tax rate is 16%, but a
3% rateis imposed on qualifying small companies
(which must have between 1 and 9 employees,
an annual turnover of less than EUR100,000,
and must be either engaged in 'productive
activity', or in the provision of brokerage,
banking, insurance, or consultancy services).
A 16% withholding tax is imposed on dividends
paid to non-resident companies (reduced
to 10% for payments to other EU countries
in 2009), unless exemption is available
under the terms of the EC parent-subsidiary
directive. The standard VAT rate is 19%.
There is a reduced rate of 9%, which applies
to medicines, some books and newspapers,
certain accommodation related services,
inter alia, exports are zero rated, and
there are also various exemptions.
[Further
Information]
There
are no low tax opportunities as such available
in Romania, as following entry to the European
Union in 2007, tax incentives which had been
available for investment in Free Trade Zones
and Industrial Parks, and for significant
cash investments likely to have an economic
impact, were withdrawn. However, various measures
are available to qualifying entities, including
preferential treatment of tax on gains (although
there is no capital gains tax as such) on
shares listed on the Romanian stock exchange,
accelerated depreciation, and tax benefits
with regard to reinvested profits.
[Further
Information]
Tax
consolidation, either domestic or cross-border,
is not permitted in Romania.
A
16% withholding tax is imposed on dividends
paid to non-resident companies (reduced
to 10% for payments to other EU countries
in 2009), unless exemption is available
under the terms of the EC parent-subsidiary
directive.
[Further
Information]
A
16% withholding tax is imposed on dividends
paid to non-resident companies (reduced
to 10% for payments to other EU countries
in 2009), unless exemption is available
under the terms of the EC parent-subsidiary
directive. Additionally, a 16% withholding
tax is imposed on interest or royalties
paid to nonresident companies. However,
under transitional rules contained in the
Interest and Royalties Directive, Romania
is authorized not to apply the exemption
from withholding tax until 31 December 2010.
During this transitional period, the Romanian
withholding tax on payments made to a company
in another member state can be up to 10%,
although treaties in place with other countries
may affect this. In 2007, Romania had more
than 70 Double Tax Treaties in place.
[Further
Information]
Liberalisation
of the telecommunications sector concluded
in 2003 has led to rapid expansion of the
market, in particular with regard to wireless
services. In 2007, there were an estimated
4.3 million fixed lines in operation, and
approximately 22.8 million mobile phones.
Internet users in 2007 numbered an estimated
12 million (2007).
[Further
Information]
The
currency is known as the New Leu (RON);
prior to the currency reform of 2005, an
earlier Leu (ROL) was in place. RON1 is
equal to ROL10,000. The central bank is
the National Bank of Romania, which has
primary responsibility for monetary and
exchange rate policy, ensuring financial
stability, oversight of the country's credit
institutions, and the issuing of currency.
Foreign banks play a significant role in
the Romanian banking sector.
[Further
Information] |
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