Romania and the People’s Republic of China entered into a new Treaty for the Elimination of Double Taxation and the Prevention of Tax Evasion. The existing taxes to which the treaty shall apply are in particular:
(i) tax on income;
(ii) tax on profit.
The maximum withholding tax rates stipulated in the Treaty are as follows:
(i) 3 per cent of the gross amount of the dividends.
(i) 3 per cent of the gross amount of interest.
The treaty for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income concluded between Romania and the People’s Republic of China shall enter into force after, each of the contracting states will complete the procedures of ratification. The confirmation of the exchange of instruments of ratification is made through publication in the Official Gazette.
Impact on investors: The Treaty for the Avoidance of Double Taxation between Romania and the People’s Republic of China will enable eligible tax residents of both countries to enjoy favourable tax rates on dividend and interest income.