Romania: Tax Code Amendment 2021
Clearstream Banking1 would like to inform customers that effective
1 January 2021
the withholding tax rate on income payments from Romanian corporate bonds subject to tax paid to non-resident individuals has been reduced from 16% to 10%.
Background
According to the Law 296/2020 published in the Official Gazette of Romania, the following tax provision has become effective since 1 January 2021: The withholding tax rate is reduced from 16% to 10% on interest from corporate bonds paid to non-resident individuals with whom Romania has a Double Tax Treaty in place.
Impact on customers
In most of the cases Romanian corporate bonds are not subject to withholding tax.
Nevertheless, there might be rare exceptions whereby a withholding tax rate of 16% may apply when the corporate bond prospectus is not approved by the competent regulatory body.
If the corporate bond is subject to tax, beneficial owners that are non-resident individuals may benefit from the 10% reduced tax rate by providing the below documents as described in the Market Taxation Guide:
- a One Time Certificate for Romanian Securities;
- an original certificate of residence to be renewed annually;
- a list of beneficial owners fully completed before each income payment (if applicable).
Further information
For further information, customers may contact Clearstream Banking Client Services, their Relationship Officer or Tax Help Desk.
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1. Clearstream Banking refers collectively to Clearstream Banking S.A., registered office at 42, avenue John F. Kennedy, L-1855 Luxembourg, and registered with the Luxembourg Trade and Companies Register under number B-9248, and Clearstream Banking AG (for Clearstream Banking AG customers using Creation Accounts), registered office at 61, Mergenthalerallee, 65760 Eschborn, Germany and registered in Register B of the Amtsgericht Frankfurt am Main, Germany under number HRB 7500.