According to the fiscal laws that are in force in Romania, any income earned from consultancy and management services, regardless of the line of business, provided by a non-resident shall be regarded as income earned in Romania.
To be regarded as income earned in Romania, the following conditions must be fulfilled:
– such income must be earned from the provision of management & consultancy services, regardless of the line of business;
– such services must be provided by a non-resident and the income must be earned from a resident or, if such income is used as expenses for a permanent office in Romania.
Therefore, such income shall be regarded as income obtained in Romania, regardless of where these services are provided and of whether they were received in Romania or abroad.
Non-residents earning taxable income in Romania must pay taxes as per the fiscal laws that are in force in Romania.
Regarding any income earned from the provision of consultancy & management services, the tax owed by non-residents for such income shall be determined, withheld, declared and paid to the state budget directly by the income payers.
These taxes are determined, and withheld at the time the income is paid,declared and paid to the state budget until the 25th of each month following the one when the income was paid. Any owed tax is determined by applying a specific rate to the gross income. This rate is different if the income is paid in a bank account located in a state that hasn’t signed with Romania an agreement that promotes the exchange of information among states.
Besides the income tax, for the income earned from consultancy & management activities, the non-resident shall owe taxes for health and social insurance, provided that the law does not stipulate otherwise.
Publisher: Budușan & Associates