The Romanian Parliament approved the New Double Tax Treaty (DTT) signed between Romania and Canada.
A rate of 5% will apply to gross dividends in cases where the beneficiary holds at least 10% of voting shares in the company paying the dividend; 15% in cases where the beneficiary holds less then 10% of voting shares in the company paying the dividend; and 10% to gross interest payments.
The general withholding tax rate on dividends from Canadian equities paid to Romanian residents will continue to be 15%. A reduced withholding tax of 5% will apply for dividends between affiliated companies. Interest payments will be subject to 10% withholding tax. The rate under the current treaty is 15%.
In the case of credits granted and guaranteed by the Canadian Export Development agency, the interest paid by the Romanian party will be taxable in Canada. In cases of credits granted by EXIMBANK (the Romanian Export Import Bank) the interest paid by the Canadian party will be taxable in Romania.
Capital gains tax is payable in the country of residence of the beneficial owner.