Check the relevant tax treaty provisions for the applicable tax rules for each type of income – e.g., dividends, interest, capital gain, employment, etc.

Browse through the tax treaties:

In short, on the purpose of the tax treaties:

By signing double tax treaties, partner states can set both specific tax rates and the right to tax certain types of income, which can be to the benefit of resident taxpayers of one of the signatory countries. The treaties may regulate the right to tax types of income such as: interest, royalties, dividends, capital gains, salaries, pensions, as well as income obtained by students, trainees, teachers, researchers, actors and athletes.

At the same time, tax conventions or treaties also regulate topics such as the exchange of information between the competent authorities, methods of eliminating double taxation, non-discrimination of taxpayers, amicable procedure and the conditions for terminating obligations under the treaty.

Tax conventions are usually bilateral treaties, signed between two parties. By signing double tax treaties, contracting parties agree on obligations under public international law. These obligations usually relate to the waiver (in whole or in part) of the taxation of certain categories of income. Thus, international tax conventions are subject to the rules of public international law.

Practically, by signing an international tax treaty, any contracting state exercises its sovereignty to give its consent to the limits of fiscal sovereignty, depending on its own interests.

Romania has so far signed over 80 double tax treaties, usually using the OECD Model Tax Convention (in some cases the UN Model). However, there are also situations in which conventions derogate from the OECD Model, such as the treaty concluded with the USA.

Apart from the situations covered by the tax conventions or treaties, each Member State of the European Union is free to establish its own tax system, to define the taxes and revenues subject to taxation, to establish the taxpayers to its own budget, etc. Also, each member state, based on its domestic tax legislation, establishes tax bases for each income category, tax rates, tax payment deadlines, etc.

Thus, there is no harmonization or regulation of these aspects at European Union level, with each Member State being free to determine by domestic law the taxation rules for each category of income, and for each type of taxpayer.

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