2 September 2014
On 26 August 2014, Uruguay's Chamber of Senators approved the pending income and capital tax treaty with Romania. The treaty was signed 14 September 2012, and is the first of its kind between the two countries. Romania ratified the treaty on 24 October 2013.
The treaty covers Uruguayan tax on business income, personal income tax, non-residents income tax, the tax for social security assistance, and capital tax. It covers Romanian tax on income, tax on profit, and non-residents income tax.
The treaty includes the provision that a permanent establishment will be deemed constituted when an enterprise of one Contracting State furnishes services in the other State through employees or other engaged personnel for the same or connected project for a period or periods aggregating more than 6 months in any 12 month period.
Both countries apply the credit method for the elimination of double taxation.
The treaty will enter into force 30 days after the ratification instruments are exchanged, and will generally apply from 1 January of the year following its entry into force. However, the exchange of information article's provision will apply regarding criminal tax matters from the date the treaty enters into force.
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