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Double Tax Treaty Romania – Austria

Double Tax Treaty Romania – Austria

In November 2014, Romania signed a double tax treaty with Austria. This convention has as a goal to prevent tax evasion and to avoid the taxation of Austrian or Romanian companies in both countries. Moreover the treaty provides some tax reductions and some special taxation regulations for the participant states.  

Beneficiaries of the double tax treaty Romania – Austria

The tax convention between Romania and Austria represents a very useful measure for the Austrian and Romanian companies by providing significant simplifications of the taxation procedures and costs reductions. The bilateral agreement represents as well a measure which facilitates the development of strong, long term economic relations between the two countries.

The bilateral tax agreement between Austria and Romania functions in two ways: either by tax exemption or by tax deduction. In the first situation, when there is a difference in taxation between the two countries, the company is exempt from paying the difference in income tax which exists between the place of business revenue and the country of residence. The most frequent case is the second one, the tax deduction, which implies that the company can deduce the taxes payed abroad, back in its country of residence.

You can rely on our Romanian accountants who can provide reliable legal counseling relating the tax convention between Romania and Austria.

Provisions of the tax convention between Romania and Austria 

The income which is subject to taxation in one of the two countries may refer to one of the following categories:

  • • business profit;
  • • income from immovable property;
  • dividends;
  • • profits obtained from shipping and transportation;
  • • interests;
  • • royalties;
  • • capital gains;
  • • personal services. 

In order to decide in which country to pay the taxes, what counts is either the place of residence or the place where the business has a permanent establishment. The term permanent establishment refers to the place of management, to a branch or to a workshop or a natural resource extraction place.

The Romanian taxes which fall under the convention are the income tax, the tax on profit, and the tax on property. The Austrian equivalents are subject to the same regulations together with corporation tax, land tax and the tax on agricultural and forestry enterprises. 

We invite you to contact our Bucharest accounting firm in order to discuss the advantages that the tax convention between Romania and Austria might have on your financial flow and future development.