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Romania Updates Fiscal Code With New Amends
The Romanian Fiscal Code has been amended and completed and will enter into force as of 1 February 2013. Taxand Romania summarises how these amends will affect crossborder enterprises nationally and abroad.
Corporate income tax
- The credit/loan notion is defined within the meaning of the provisions regarding limitation of tax deductibility for expenses incurred with interest and losses resulting from exchange rate differences.
- Non-resident legal entities which obtain income from real estate located in Romania or from the sale / transfer of participation titles held in Romanian legal entities, should submit an annual corporate income tax return even when the buyer is a Romanian legal entity or a non-resident legal entity having a permanent establishment registered in Romania.
Tax on incomes obtained from Romania by non-residents
- A withholding tax rate of 50% applies on the income obtained from Romania by non-residents from services, dividends, interest, royalties, commissions and in certain conditions from independent activities performed in Romania, which are paid in a state with whom Romania has not entered into a legal instrument based on which the exchange of information may be carried out.
- Withholding tax on income obtained from Romania by non-residents applies to income obtained from services (of any kind, excluding international transport services and services ancillary to such transport) rendered outside Romania.
- In order to apply the provisions set out by the double tax treaties it is now necessary to obtain a fiscal residence certificate for all non-resident service suppliers, regardless of where the services were rendered.
Mandatory social security contributions
- New clarifications and amendments are introduced in relation with the declaration and payment of the mandatory social security contributions due by individuals who perform their activity in Romania and obtain income from salaries from foreign employers.
- According to the new provisions, allowances paid to employees for delegation and secondment in the country and abroad, exceeding 2.5 times the legal level established for personnel working in public institutions, are subject to mandatory social security contributions.