According to art . Of 118 . ( 2) of Law 571/2003 regarding the Fiscal Code , as amended and supplemented, for the application of the convention for the avoidance of double taxation, non-resident is required to present income payer , in the time of income tax residence certificate issued by the authority competence of the state of residence . If the tax residence certificate is not present in this period, the provisions of Title V. When tax residence certificate presentation the provisions of the Convention to avoid double taxation and tax regulation is within the statutory period of limitation given that the tax residence certificate states that the beneficiary had income in the period of limitation , tax residence in the Contracting State of which concluded the Convention for the avoidance of double taxation, for the entire period in which revenues were realized in Romania. Tax residence certificate presented during the year for which payments are available and the first 60 days of next year , unless you change the conditions of residence.
The implementing rules of this article , it states:
(1) non-resident beneficiary of income in Romania Romania must justify the benefit of the convention for the avoidance of double taxation concluded between Romania and state of residence by presenting tax residence certificate issued by the tax authority of the State. To prove residency may also present other document issued by an authority other than the tax that has responsibilities in residency certification under the domestic law of that State .
( 2 ) Non-residents who are beneficiaries Romania income payer shall submit the original or copy of income tax residence certificate or document referred to in para. (1) , translated and legalized by the competent body in Romania .
( 4 ) In the event that the non-resident recipient of the income from Romania submit one original tax residence certificate or document referred to in para. (1) a novel paying resident income has branches , subsidiaries or branches in various localities in Romania and who do pay , in turn, the non-resident income recipient , the recipient ‘s tax residence certificate or document referred to in para. ( 1 ) original , will send to each subunit translated and notarized copy of the original certificate of tax residence of the recipient of income from Romania or document referred to in para. ( 1). The certified copy of the recipient ‘s tax residence certificate or document referred to in para. ( 1 ) original , will sign noting that it owns the original .
( 5) Paragraph . ( 4 ) are valid even if the non-resident recipient of the income from Romania has established a subsidiary in Romania which has contractual relationships with various clients in different locations in Romania and who receives one original of tax residence certificate or document referred to par. ( 1). Branch belonging to non-resident person will make copies you distribute Romanian customers .
According to the Tax Code , are taxable income of non-residents in Romania revenues from services in Romania and outside Romania whatsoever nature in any field of consulting services , technical assistance , etc. . Tax payable by non- taxable income obtained from Romania is calculated , withheld and paid to the state budget by the payers of income , namely by the company in Romania.
For payments subject to withholding tax , the tax rate is 16 % according to the Tax Code, but this can be reduced by application of double taxation treaties that Romania has concluded , in your case the treaty with China (except Hong Kong) . The application of more favorable rates therein is subject to certain conditions. In order to determine the rate to be applied , please keep in mind (besides the relevant legislation ) and the contract that you have signed with the service provider .
Reporting obligations of the company in Romania are:
– The obligation to register the service contract to tax authorities ;
– The obligation of completing and submitting the declaration code 100 – ” Statement regarding the payment obligations to the state budget ” ;
– Requirement for informative statements on tax withheld and paid to income subject to withholding / income exempt nonresident income beneficiaries .
HERE you can find the situation about double taxation conventions and protocols amending their concluded by Romania with other countries, to September 1, 2013