Those enterprises are foreign which are incorporated and have their registered office abroad. They are taxable in Roumania if they have a permanent establishment in that country or derive income therefrom.

The income of a foreign enterprise belonging to an individual or a partnership is taxed in the same way as the similar income of a national, except that the tax on total income is replaced by the 50 per cent surtax on income other than income from personal property.

In the case of companies, no account is taken of the general results of the enterprise’s operations, and the income taxable in Roumania is the income as shown by the accounts of the Roumanian establishment.

Foreign share companies having no establishment in Roumania are only taxed if they have a depot and sell their goods in the country through an agent or representative; they are then liable to the commercial tax (Instructions, ad paragraph 1 of Article 2, Official Monitor, No. 163, of June 26th, 1923). Partnerships and individuals doing business in the manner described above are further subject to a surtax equal to half the schedular tax, excluding the additional centimes leviable by departments and communes (Article 64 of the Law of February 23rd, 1923); this surtax takes the place of the tax on total income.

If the company has a permanent establishment in receipt of an income in Roumania, it is liable in respect of that income without regard to the general results of the company’s total operations.

In order to avoid double taxation, share companies may deduct from their income receipts already taxed under some schedule, except income assessable to commercial or industrial tax. Such income, however, continues to be subject to the surtax on industrial and commercial income.

Individuals are liable, in addition to the schedular taxes, to the personal tax on total income, and it should be borne in mind throughout the following survey that the elementary taxes are supplemented by a tax on the whole income. This survey deals exclusively with enterprises having an establishment in Roumania. The law makes no provision to cover the case of enterprises which have only their seat of management in Roumania and which operate entirely in other countries. Nor, in fact, are there any enterprises of this kind, Roumania being a comparatively young country which possesses little capital and tends rather to import capital than to export it.


(a) Dividends

Companies having their head office in Roumania are bound to pay the tax on income from personal property on the dividends declared payable, even if they are not actually distributed without regard to the nationality or domicile of the shareholders. When paying the dividends, they withhold the amount of the tax which they have paid in advance to the Treasury.

Roumanian branches which do not distribute dividends, but transfer their profits to the head office abroad, are not required to pay the tax on personal property, except when the foreign seat distributes a dividend, in which case the branch in Roumania has to pay the tax on the part of the profits earned in Roumania (Article 23, ad paragraph 48 of Instructions, Official Monitor, No. 793, of April 11th, 1929).

(b) Interest

In virtue of the real character of the tax on personal property, interest on bonds and secured and unsecured loans is taxable when the debtor has his seat in Roumania. The tax is deducted at the source.

In the case of interest being payable to companies, it is not included among the income subject to the elementary tax on commercial and industrial income, but only to the complementary tax of the same schedule.

Foreign capital lent to a Roumanian enterprise or deposited in a Roumanian bank enjoys certain fiscal advantages (see page 389).

(c) Director’s Percentages

If fees paid to directors are of a fixed amount and bear no relation to the profits of the company, they are subject to the tax on salaries and wages. If, on the contrary, these fees vary according to the profits of the company, they are regarded as income from personal property and are taxed as such.

(d) Royalties for Use of Patents, Copyrights, Trade-marks, Secret Processes and Formulae and Similar Income

All royalties for the use or the exploitation of incorporeal property rights (patents, copyrights, trade-marks, goodwills, mining and oil concessions, etc.) are subject to the tax on personal property, whether payable in cash or in kind. The taxation of such income follows the same rules as set forth in connection with interest under (b).

(e) Rents from Real Estate, Mining Royalties and Similar Income

Rents derived from the lease of real property are assessable to agricultural tax or to the tax on buildings, according to the nature of the property. Exception is made for rents from the buildings of companies for the promotion of cheap building, which are assimilated to income from industrial enterprises and are taxed at a lower rate. Rent from the lease of industrial plant, business premises or mining concessions is assessable to the tax on income from personal property, being regarded as an assignment of rights.

Income from buildings intended and exclusively used for some industry (factories, workshops, etc.) is exempt from the tax on buildings, since it is considered to be part of the industrial or commercial income of the enterprise.

If the owners of real estate are domiciled abroad, the tax on agricultural income or buildings is doubled, irrespective of the taxpayer’s nationality.

Income from real property belonging to a share company which has already been assessed to a schedular tax is not subject, like other income of the company, to the elementary tax on commercial and industrial income. Such income continues, however, to be subject to the commercial surtax.

Forests come under a special regime.

(f) Gain derived from the Purchase and Sale of Real Estate, Securities and Personal Property

(g) Salaries, Wages, Commissions and Other Remuneration for Services

Persons domiciled abroad who work on behalf of others are taxable in Roumania on account of the remuneration which they receive for such services, if the work has been accomplished in Roumania or if the remuneration has been paid there. When they are domiciled in the country, they are also taxable for all remuneration, whether derived from abroad or from the country.

(h) Income from a Trust

Trusts, as understood by Anglo-Saxon law, are unknown in Roumania, and the law contains no special provisions as regards income derived from such institutions. It is therefore taxed like any other commercial or industrial income of the enterprises which receive an income from a trust.

(i) Income from the Carrying-on of a Business or Industry through


Those enterprises are national which are incorporated in Roumania in accordance with Roumanian law and have their head office in that country.

Such enterprises are taxable in respect of their entire commercial and industrial income; therefore, both as regards income of this kind derived from abroad and that derived from the country. Income not included among these profits is taxed according to the principles regulating the various schedular taxes described in Part I.