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New Methodological Norms For Fiscal Code

On 14 March 2013 the Romanian Government published the decision for the amendment and completion of the methodological norms for the application of the Fiscal Code. Taxand Romania focuses on the effect this will have on international workers.

Income tax
For secondment agreements lasting for a period greater than the one mentioned under the Double Tax Treaty with the relevant country, salary income will be taxable in Romania. In this regard, specific procedures for the recovery of income tax due in Romania have been introduced. The foreign employer will no longer have the obligation to compute, withhold and pay income tax for the seconded employees, starting with salary income related to February 2013.

Non-resident witholding tax
The norms mention the types of income deemed derived from Romania for services rendered outside Romania, these being limited to: management services, consultancy services, marketing services, technical assistance, research and development, advertising and publicity services as well as services rendered by lawyers, architects, notaries, accountants, auditors etc.

Payments made to non-residents in countries with which Romania does not have a legal instrument based on which an exchange of information can performed, will be subject to 50% withholding tax, irrespective of the fact that the beneficiary is a resident of a country with which there is a Double Tax Treaty with Romania. The 50% witholding tax also applies to interest paid to a jurisdication which does not hold a Double Tax Treaty with Romania.

Discover more: Updated methodological norms for the application of the Fiscal Code

Your Taxand contact for further queries is:
Angela Rosca
T. +40 21 316 06 45

Taxand's Take

The methodological norms were amended concerning corporate income tax, personal income tax, microenterprises income tax, withholding tax, VAT, excise duties and social contributions. All individuals and corporations who believe they could be affected by these updates should research and comply accordingly.

Taxand's Take Author

Angela Rosca