News Share

The Tax Hub

Daily Tax Newsletter

Romania-Iceland

14 May 2008

Responsive image

Treaty between Romania and Iceland – details

Details of the first-time income tax treaty between Romania and Iceland, signed on 19 September 2007 have become available. The treaty was concluded in the Romanian, Icelandic and English languages, each text having equal authenticity. In the case of divergence, however, the English text prevails. The treaty generally follows the OECD Model Convention.

The maximum rates of withholding tax are:

-   10% on dividends in general and 5% if the beneficial owner is a company (other than a partnership) holding directly at least 25% of the capital of the company paying the dividends (Art. 10(2) of the treaty);
-  

3% on interest, with exemptions for interest arising in a state if it is derived and beneficially owned by the government of the other state, a political subdivision, a local authority or an administrative territorial unit thereof or any agency or bank unit or institution of that government, political subdivision, local authority or administrative territorial unit or if the debt claims of a resident of the other state are warranted, insured or financed by a financial institution wholly owned by the government of the other state (Arts. 11(2) and (3) of the treaty); and

-  

5% on royalties (Art. 12(2) of the treaty).

The articles on interest and on royalties contain a presumption regarding the source of payment.

Deviations from the OECD Model Convention include:

-  

the definition of royalties includes payments for the use of, or the right to use, computer software, films or tapes for radio or television broadcasting, transmission of every kind to the public (Art. 12(3) of the treaty);

-  

the definition of royalties includes payments for the use of, or the right to use, computer software, films or tapes for radio or television broadcasting, transmission of every kind to the public (Art. 12(3) of the treaty);

-  

gains derived by a resident of a state from the alienation of shares or comparable interests in a company, the assets of which consist wholly or principally of immovable property situated in the other state, may be taxed in that other state (Art. 13(4) of the treaty);

-  

the treaty contains provisions on levying deferred exit tax, limited to 5 years (Art. 13(6) of the treaty);

-  

the treaty contains an article on independent personal services (Art. 14 of the treaty);

-  

income derived by artistes or sportsmen within the framework of cultural or sports exchanges agreed to by the governments of the states and carried out other than for the purpose of profit shall be exempt from tax in the state in which the activities are exercised (Art. 17(3) of the treaty); and

-  

the treaty does not contain an article on assistance in the collection of taxes.

The non-discrimination clause applies to taxes covered by the treaty only (Art. 25(5) of the treaty).

Both states provide for the credit method to avoid double taxation.

Powerful Tax Tools

NEW

FX Rates

Global FX Rates including Tax Year Average FX Rates and Spot Rates for all Reporting Currencies.

NEW

Corporate Tax Rates

Corporate tax rates, surtaxes, and effective tax rates for the current year, as well as historical rates and approved future rates.

NEW

Country Analysis

Detailed tax guidance for companies doing business in over 100 countries, including summaries and snapshots of key tax facts and issues.

NEW

Cross Border Tax Calculator

Calculate total tax costs and benefits of a cross border transaction including withholding tax, participation exemption and foreign tax credit rules.

NEW

Cross Border Tax Rates

Provides Domestic, treaty and EU cross border tax rates for over 5,000 country combinations for 9 different payment streams.

NEW

OECD BEPS Project

Complete overview of the OECD BEPS Project, including daily BEPS news, country adoption of BEPS measures, and an overview of the 15 BEPS Actions.

NEW

Tax Calendar

Customizable calendar tool that tracks corporate income tax, value added tax and transfer pricing obligations by country or entity.

NEW

Tax Forms

English translations of key tax forms for over 80 countries, including tax return forms, treaty benefit forms, withholding tax forms, and more.

NEW

Worldwide Tax Treaties

Repository including thousands of tax treaties (in English), OECD, UN and US Models, relevant EU Directives, Technical Explanations, and more.

NEW

Worldwide Tax Planner

Calculates the worldwide tax cost of what-if scenarios based on legal entity structure, taxable income, and cross border transactions.

NEW

Certified Rates Report

Customizable Certified Rates Report providing updated corporate and withholding tax rates at the end of each month for over 100 countries.

NEW

Withholding Tax Minimizer

Enables quick calculation of tax costs and benefits of cross border transactions considering all possible transaction combinations and optimal routes.

NEW

VAT Rates

Provides value added tax (VAT) rates, goods and services tax (GST) rates and other indirect tax rates for over 100 countries.

NEW

NOL Calculator

Country specific calculator to determine how net operating losses can be utilized in carryback and carryforward years.

NEW

Transfer Pricing Calculator

Calculates TP ratios under various TP methods and calculates the difference between target ratios and actual ratios.

NEW

Individual Income Tax Rates

Individual tax rates for over 100 countries.

Play of the Day

FX Rates

Global FX Rates including Tax year Average FX Rates and Spot Rates for all Reporting Currencies.

We’re here to help

We’re here to answer any questions you have about the Orbitax products and services.

Send us a message

Who’s behind Orbitax?

We’re committed to providing high value, low cost tax research and management solutions.

Learn More