Income Tax Treaty between the United States and Romania

 

United States-Romania Tax Treaty

Romania International Tax Compliance Rules

Quick Summary.  Romania taxes resident companies on their worldwide income.  Non-resident companies are taxed on Romanian-source income.  Micro-companies–defined based upon total prior-year revenue of no more than 1 million euros–are subject to a special, micro-company tax regime.  

Romania is a semi-presidential republic.   It is governed by a prime minister and president.  Romania is divided into 41 counties and the municipality of Bucharest. The Romanian Constitution provides for the right to ownership of private property.

Residents are taxed on worldwide income with certain exceptions, including salaries from abroad for work performed outside of Romania.  Non-residents are subject to tax on Romanian-sourced income.  Romania generally employs a flat personal income tax at a rate of 10%.  

Under the relatively new legislation, income from virtual currency transfers are generally subject to a 10% tax on gains.  

U.S.-Romania Tax Treaty

Romania is a member of the EU and the World Trade Organization (WTO), as well as the General Agreement on Tariffs and Trade (GATT).

Romania Tax Treaty.  Convention between the Government of the United States of America and the Government of the Socialist Republic of Romania with Respect to Taxes on Income, signed at Washington on December 4, 1973

Romania has a bilateral taxation treaty with the United States; the treaty was signed in 1973 and entered into force in 1974.

Currency.  Romanian New Leu (RON)

Common Legal Entities Joint stock company, general partnership, limited partnership, limited partnership by shares, limited liability company, and branches.  

Tax Authorities.  National Agency for Tax Administration

Tax Treaties.  Romania is a signatory to approximately 87 bilateral tax treaties and the the OECD MLI.  

Corporate Income Tax Rate.  16%

Individual Tax Rate.  10%

Corporate Capital Gains Tax Rate.  16%

Individual Capital Gains Tax Rate

Residence.  Residence is established by citizenship, domicile, center of vial interests, or presence for a period of more than 183 days in 12 consecutive months.  

Withholding Tax.

            Dividends.  5%

            Interest.  16%

            Royalties.  16%

Transfer Pricing.  Romania generally follows OECD guidelines.  

CFC Rules.  Yes.  

Inheritance/estate tax.  Up to 1%; however, no tax applicable if succession made during first to  years after death.  

Tax Treaty Network – International Tax Attorneys

Our international tax expertise allows us to guide clients through tax planning and compliance so that they can focus on what matters most. At Freeman Law, our clients are engaged in an interconnected business environment that spans across the globe.  From supply chains to markets, cross-country taxation impacts every global business.

Do you have questions about Romania’s Tax Treaties? Schedule a consultation with one of Freeman Laws International Tax Experts Today!