New Italy-Romania Convention

La Law no. 28 of March 17, 2016 (Lege nr. 25 din 17 martie 2016 privind ratificarea Conventiei dintre Romania si Italia)on the ratification of the Convention between Romania and Italy to avoid double taxation and prevent tax evasion produces important changes to the previous Convention signed in 1977. The new Convention will take effect for income paid from the first day of the year following the year of its entry into force, i.e., January 1, 2017.

The Convention established the new 5 percent withholding tax on interest income, royalties (royalties) paid by a resident one state and with a beneficiary a resident of the other state (previously the withholding rate was 10 percent).

With regard to dividends, the Convention changed the withholding tax, which is now 5 percent, effectively aligning the external withholding tax with the internal withholding tax applied by Romania on domestic dividends.

We remain available for further clarification