New Double Tax Treaty between Romania and Bulgaria

  • Some terms used in the previous agreement have been clarified (e.g. enterprise, company).
  • Two new criteria have been introduced in regards to the definition of residents – i.e. the place of registration / place of incorporation is considered a country of residency.
  • New anti-abuse clauses have been introduced.
  • Article 5 – a building site, a construction, assembly or installation project constitutes a permanent establishment only if it lasts more than 12 months (compared to 9 months under the previous agreement).
  • Article 10 – introduces the term beneficial owner and the tax rate has been reduced to 5% (in the previous agreement the tax rate was 10% or 15% depending on certain conditions).
  • Article 11 – tax rate has been reduced to 5% (compared to 15% under the previous agreement).
  • Article 12 – tax rate has been reduced to 5% (compared to 15% under the previous agreement) and the term know-how has been introduced under the definition of royalties.
  • The article regarding Capital has been eliminated (i.e. Article .23).
  • Clarifications have been introduced regarding the elimination of double taxation and tax credits (Article 22).
  • A new article has been introduced, i.e. Article 26 – assistance for the collection of taxes, where Contracting States shall assist each other in collecting revenue claims.

Dan Bădin
Partner DELOITTE ROMÂNIA

Camelia Malahov
Senior Manager DELOITTE ROMÂNIA

Adrian Stoian
Senior Manager DELOITTE ROMÂNIA

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