Romania has 0% witholding tax for resident companies and non resident individuals?

[Marzio]

Well this is straight from horse's mouth.

"Residents pay tax on their worldwide income. Taxable income includes, in particular, income from employment (salaries,‍ wages, bonuses and other remuneration); business income; interest, royalties, rental income; capital gains; pensions and⁠ scholarships (except scholarships financed from state budget or paid on the basis of law). Taxable income does not include dividends paid by Estonian or foreign companies when the underlying profits⁤ have already been taxed."

Last sentence means that if the Estonian holding received dividends⁣ from any subsidiary, those diviends will be tax exempt when distributed to Estonian residends.

 

[ImKing]

that's good enough for me.. can we‍ use Wise for a Romanian company or what EMI will work?

 

[Marzio]

You have plenty of choice since it will be a EU company‍ you will get access to Wise, Revolut, Intergiro, Romanian banks

 

[ImKing]

how about the‍ setup, can this be done remote, is there any service provider you can recommend for⁠ the task and what are the costs?

finally, do we have any privacy or is⁤ all public like with a UK LTD ?

 

[Marzio]

In my experience you have to fly there, at least for a couple of days‌ to sign documents and open the bank account for the company used to pay taxes.‍

Since RO is part of EU there's plenty of sites that show companies data.

 

[AMD]

yeah it is damn s**t

 

[fatcat]

What about the VAT though, or is there a way to avoid charging it?

 

[johndunham]

If you sell VAT-products to EU-consumers, you should pay VAT to‍ the tax man. It's fairly easy to catch you if you don't.

 

[cuno]

how easy is it to rent an apartment as an‍ foreigner in Portugal or Romania for instant ?

 

[johndunham]

Just as easy as anywhere in the‍ world. If you have money, you can rent.

 

[fatcat]

So either‍ non-VAT products to EU-consumers, or VAT products to non-EU-consumers.

 

[ElBotellon]

hey guys the discussion went to other directions but I still have the doubt:

a NON-RESIDENT⁠ individual shareholder of micro-company in Romania gets dividends with 0% witholding tax? in practice Mr.⁤ Red (individual - non resident ) tax resident in cyprus and receiving 10K of dividends⁣ will not receive any taxation from romania?

 

[johndunham]

I think⁤ you are correct, but my knowledge is not sufficient to give you an answer with⁣ certainty. I am however curious to know this for certain as well. Have you learned⁢ anything more since your last reply to this thread?

 

[MarkusM]

What would be the point to have an Estonian Holding company, if you‌ can take the dividents out from company as an individual,
without withholding tax and with‍ no tax on them as an estonian resident?

You said “in order︃ to simplify…”, but what is the point to have both, a holding and an operating︄ company in Ro, when you could achieve what you want throught just the operating company?︅

 

[Marzio]

1. Asset protection
2. Residency itself if you are not EU national

 

[MarkusM]

For EU residency, that yes, it’s explicabile to form an estonian company.
Regarding point 2.‌ , what level of Asset protection could you get throught the holding company? I see‍ protection only against creditors from the RO operating company. Maybe i am wrong….

 

[Marzio]

That’s correct‍ it is always a good idea to have a layer or protection but then again⁠ it really depends on the type of business you have in Romania.

If you have⁤ a low risk business and you are an EU national you could certainly do without⁣ a holding company.

Nevertheless an Estonian holding could be useful to have since it distributes⁢ tax free dividends from other business in which you could hold shares or access to︀ treaties company specific.

 

[Don]

I would like to add⁢ that for holdings less than 10% you are allowed to credit foreign income tax against︀ your Estonian income tax liability if certain conditions are met. For example, receiving dividends from︁ US entities. The withholding tax is 15% according to the treaty. The tax amount paid︂ will work as a tax credit against the corporate tax charge payable in Estonia when︃ the Estonian company distributes the same dividend to its shareholder.

 

[Marzio]

I didn’t know that, can you point me to a⁢ resourse where i can read more about the topic?

 

[Don]

Foreign income tax is taken into‍ account to the extent that it is in accordance with laws and the conventions for⁠ avoidance of double taxation entered into between states.

https://www.riigiteataja.ee/en/eli/530012014003/consolide