LATEST LEGAL NEWS

Brief presentation of the changes regarding the establishment of tax residence in Romania and the increase of the number of public institutions subject to the transparency obligation provided by Law no. 544/2001.

TAX RESIDENCE

In accordance with the Tax Code, tax on revenue is due, among others, by:

• Resident Romanian natural persons who have their domicile in Romania, for revenues obtained both in Romania and abroad;


• Resident natural persons, other that Romanian natural persons or persons who have their domicile in Romania;


• Non-resident natural persons who carry out an independent activity by means of a permanent office in Romania, for revenues obtained through the permanent office in question;


• Non-resident natural persons who carry out a dependent activity.

ANAF Order no. 1099/2016, in force since 29 July 2016, provides tax obligations for foreign citizens who become residents in Romania for tax purposes.

In accordance with Order no. 1099/2016, foreign citizens who stay in Romania for a period/multiple periods exceeding 183 days within 12 consecutive months must fill-in the “Questionnaire for the establishment of a natural person’s residence for tax purposes upon arrival in Romania” at the end of the year in question. This questionnaire must be submitted with the competent tax authority within 30 days from the date when the 183-day period is reached. Based on this form, the administration decides whether the foreign citizen becomes resident in Romania for tax purposes, namely whether the said foreign citizen must pay the tax on all his/her revenues in Romania.

When leaving the country, natural persons resident in Romania for tax purposes, as well as non-residents who filled-in the abovementioned form must fill-in the “Questionnaire for the establishment of a natural person’s residence for tax purposes upon departure from Romania” if they leave the country for a period/multiple periods exceeding 183 days within 12 consecutive months.

In order to establish a natural person’s real residence, if such person is resident in Romania and in a State signatory of a Tax Convention, Order no. 1099/2016 provides the following criteria:

• The person in question is considered resident of the State where he/she has his/her domicile or a permanent accommodation at his/her disposal;


• If the person in question has a permanent accommodation in both States, he/she is considered resident of the State where the center of his/her vital interests is located, namely of the State with which he/she has closer personal and economic ties;


• If the tax authority cannot determine the State where the person’s center of vital interests is located or if the person does not hold a permanent accommodation in neither one of the States, the person in question will be deemed resident of the State where he/she frequently lives;


• If the person habitually lives in both States or if he/she lives in neither one of the States, it will be deemed that the said person is resident of the State whose nationality/citizenship he/she holds;


• If the person holds the nationality/citizenship of both States or of neither one of them, the competent authorities will settle this issue in accordance with the “Amicable Procedure” provided by the Tax Convention.

Please note that residents whose center of vital interests is located in Romania or who stay on Romanian territory for a period/multiple periods exceeding 183 days in 12 consecutive months will have to pay the tax on revenues obtained in Romania or abroad starting from the date when they became Romanian residents.
Nevertheless, non-resident natural persons who stay on the territory of a State with which Romania concluded Tax Conventions are exempt from the payment of the tax on revenues. These persons must prove their tax residence by means of a residence certificate issued by the competent authority of the foreign State.

AMENDMENT OF THE LAW ON FREE ACCESS TO PUBLIC INFORMATION

A new amendment consists of the increase of the number of public institutions subject to the transparency obligation provided by Law no. 544/2011. Such public institutions must ensure access to public information. Further to the entry into force of Law no. 144/2016, the new categories subject to this obligation are: political parties, public NGOs, sports federations and public utility operators.