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Titlul V in Engleza - De la data de 2010-01-01 pana in Prezent  

TITLE V - Tax on incomes obtained from Romania by non-residents and tax on the representative offices of the foreign companies established in Romania

CHAPTER I - Tax on the incomes obtained from Romania by non-residents

ART. 113 - Taxpayers

††† The non-residents which obtain taxable incomes from Romania shall be liable to pay tax according to the provisions of the present chapter and shall be hereinafter called taxpayers.

ART. 114 - Scope of application of tax

††† The tax provided by the present chapter, which shall be hereinafter called tax on the incomes obtained from Romania by non-residents, shall be applied to the gross taxable incomes obtained from Romania.

ART. 115 - Taxable incomes obtained from Romania

††† (1) The taxable incomes obtained from Romania shall be the following, regardless whether the incomes are received in Romania or abroad:

††† a) dividends from a resident;

††† b) interests from a resident;

††† c) interests from a non-resident which has a permanent head office in Romania, if the interest is an expense of the permanent head office;

††† d) royalties from a resident;

††† e) royalties from a non-resident which has a permanent head office in Romania, if the royalty is an expense of the permanent head office;

††† f) commissions from a resident;

††† g) commissions from a non-resident which has a permanent head office in Romania, if the commission is an expense of the permanent head office;

††† h) incomes from sports or entertainment activities pursued in Romania, regardless whether the incomes are received by the persons actually participating in these activities or by other persons;

††† i) incomes from the provisions of management or consulting services in any field, if such incomes are obtained from a resident or if such incomes are expenses of a permanent head office in Romania;

††† j) incomes representing remuneration received by non-residents which have the capacity of administrator, founder or member of the managing board of a Romanian legal person;

††† k) incomes from services provided in Romania, excluding the international transport and the provisions of services related to this transport;

††† l) incomes from independent professions carried out in Romania - doctor, lawyer, engineer, dentist, architect, auditor and other similar professions -, in case the incomes are obtained in a different manner than through a permanent head office or during a period or periods which do not exceed in total 183 days during any period of 12 consecutive months ending in the calendar year in question;

††† m) incomes from pensions received from the social insurance budget or from the state budget, to the extent which the monthly pension exceeds the threshold provided in Article 69;

††† n) *** Repealed

††† o) incomes from prizes granted at contests organised in Romania;

††† p) incomes obtained from gambling practised in Romania, from each game of chance, obtained from the same organiser during a single day of gambling;

††† q) incomes obtained by non-residents from the liquidation of a Romanian legal person. The gross income obtained from liquidation of a Romanian legal person shall be the surplus from the distributions in cash or in kind exceeding the contribution to the registered capital of the receiving natural/legal person.

††† (2) The following taxable incomes obtained from Romania are not taxable according to the present chapter and shall be taxed according to Title II, III, or IV, as the case may be:

††† a) incomes of a non-resident, which are attributable to a permanent head office in Romania;

††† b) incomes of a foreign legal person obtained from real estate located in Romania or from the transfer of securities, as defined in Article 7 (1) point 31, held in a Romanian legal person;

††† c) incomes of a non-resident natural person obtained from a dependent activity pursued in Romania;

††† d) incomes of a non-resident natural person obtained from the rental of or other form of assigning the right of use of a real estate located in Romania, from the transfer of the real estate located in Romania, from the transfer of units, as defined in Article 7 (1) point 31, held in a Romanian legal person, and from the transfer of securities, as defined in Article 65 (1) c);

††† e) incomes obtained by non-residents from an association established in Romania, including from an association of a non-resident natural person with a micro-enterprise.

††† (3) The incomes obtained by non-resident collective investment organisms without legal personality from the transfer of securities, as defined in Article 65 (1) c), respectively of units, as defined in Article 7 (1) point 31, directly or indirectly held in a Romanian legal persons, shall not be taxable incomes in Romania.

††† (4) The incomes obtained from Romania by non-residents from the transfer of financial derivatives, as defined by the law, shall not be taxable incomes in Romania.

††† (5) The incomes obtained by non-residents on foreign capital markets from the transfer of units, as defined in Article 7 (1) point 31, held in a Romanian legal person, as well as from the transfer of securities, as defined in Article 65 (1) c), issued by Romanian residents, shall not be taxable incomes in Romania.

ART. 116 - Withholding of tax from the taxable incomes obtained from Romania by non-residents

††† (1) The tax payable by non-residents for taxable incomes obtained from Romania shall be calculated, withheld and transferred to the state budget by the payers of incomes.

††† (2) The payable tax shall be calculated by applying the following quotas on the gross incomes:

††† a) 10% for incomes from interests and royalties, if the actual receiver of these incomes is a resident legal person in a Member State or in one of the states of the European Association of Free Trade, namely Island, the Principality of Liechtenstein, the Kingdom of Norway, a permanent establishment of an undertaking from a Member State of the European Union or from a state of the European Association of Free Trade, namely Island, the Principality of Liechtenstein, the Kingdom of Norway, located in another Member State of the European Union or of the European Association of Free Trade. This taxation quota shall apply during the transitional period, as of the date of accession of Romania to the European Union and by 31 December 2010, provided that the actual receiver of the interests or royalties holds at least 25% of the value/number of units held in the Romanian legal person, for an uninterrupted period of at least 2 years that ends on the date of payment of interests or royalties;

††† b) 10% for dividends paid by an undertaking, which is a Romanian legal person or a legal person with head office in Romania, established according to the European legislation, to a resident legal person in another Member State of the European Union or in one of the states of the European Association of Free Trade, namely Island, the Principality of Liechtenstein, the Kingdom of Norway, or to a permanent establishment of an undertaking from a Member State of the European Union or from a state of the European Association of Free Trade, namely Island, the Principality of Liechtenstein, the Kingdom of Norway, located in another Member State of the European Union or of the European Association of Free Trade;

††† c) 20% for incomes obtained from gambling, as provided in Article 115 (1) p);

††† d) 16% in case of any other taxable incomes obtained from Romania, as specified in Article 115, except for incomes from interests to forward deposits, sight deposits/current accounts established, certificates of deposit and other savings instruments acquired before 1 January 2007 for which the taxation quota existing on the date of acquiring/setting up shall apply.

††† (3) By way of derogation from paragraph (2), the tax which must be withheld shall be calculated as follows:

††† a) for incomes which represent remunerations received by the non-residents which have the capacity of administrator, founder or member of the managing board of a Romanian legal person, according to the provisions of Article 57;

††† b) for incomes from pensions received from the social insurance budget or from the state budget, as provided in Article 70.

†† †(4) The tax shall be calculated or withheld, respectively, at the time of the payment of the income and shall be transferred to the state budget until the 25th day inclusive of the month following the one when the income was paid. The tax shall be calculated, withheld and transferred, in ROL, to the state budget, at the rate of exchange of the foreign exchange market as communicated by the National Bank of Romania, valid on the day when the tax for non-residents is withheld. In case of distributed amounts, which were not paid to the shareholders or associates by the end of the year when the annual financial statements were approved, the tax on dividends shall be declared and paid until 25 January of the next year.

††† (5) For the incomes as interests for the forward deposits, certificates of deposit and other saving instruments at banks and other authorised credit institutions and located in Romania, the tax shall be calculated and withheld by the payers of such incomes at the time of registration in the deposit account of the holder or at the time of redemption, in case of certificates of deposit and of saving instruments. The transfer of tax for the incomes from interests shall be carried out on a monthly basis by the 25th of the month following the month of registration/redemption.

††† (6) The renewal of deposits/saving instruments shall be assimilated to the establishment of a new deposit/acquiring of a new saving instrument.

††† (7) The tax on capitalised interests shall be calculated by the payer of such incomes at the time of registration in the current account or in the deposit account of the holder or, respectively, at the time of redemption in case of saving instruments or at the time when the interest is transformed into loan or into capital, as applicable.

††† (8) The manner of determination and/or of declaration of the incomes obtained from the transfer of the participation titles in a Romanian legal person shall be established by the norms.

††† (9) For any income, the tax which must be withheld, in accordance with the present chapter, shall be the final tax.

ART. 117 - Exemptions from the tax provided in this chapter

††† The following incomes shall be exempt from the tax on incomes obtained from Romania by non-residents:

††† a) interests for sight deposits/current accounts;

††† b) the interest related the public debt instruments in ROL and foreign currency obtained from trading state securities and bonds issued by administrative-territorial units, in ROL and foreign currency on the domestic market and on international financial markets, as well as the interest related to instruments issued by the National Bank of Romania for the achievement of the monetary policy strategies and the incomes obtained from trading of securities issued by National Bank of Romania;

††† c) interest from debt instruments/debt securities issued by Romanian companies, set up according to the Law No 31/1990 on trading companies, republished, as subsequently amended and supplemented, if the debt instruments/debt securities are traded on a transferable securities market regulated by the relevant authority of the state where this market is operating and the interest is paid to a person not affiliated to the issuer of the debt instruments/debt securities;

††† d) prizes of a non-resident natural person obtained from Romania, as a result of participation in national and international artistic, cultural and sports festivals financed from public funds;

††† e) prizes granted to non-resident pupils and students at contests financed from public funds;

††† f) incomes obtained by non-residents from Romania, which provide consulting, technical assistance and other similar services in any field, within the contracts financed by a loan, credit or other financial agreement concluded between international financial bodies and the Romanian state or a Romanian legal persons, including the public authorities, which are guaranteed by the Romanian state, as well as within contracts financed by loan agreements concluded by the Romanian state with other financial bodies, in case the interest charged for such loans is less than 3% a year;

††† g) incomes of foreign legal persons which carry on in Romania consulting activities within free financing agreements concluded by the government of Romania/public authorities with other governments/public authorities or with governmental or non-governmental international organisations.

††† h) the dividends paid by an undertaking, which is a Romanian legal person or a legal person with the head office in Romania, established according to the European legislation, to a resident legal person from another Member State of the European Union or in one of the states of the European Association of Free Trade, namely Island, the Principality of Liechtenstein, the Kingdom of Norway, or to a permanent establishment of an undertaking from a Member State of the European Union or from a state of the European Association of Free Trade, namely Island, the Principality of Liechtenstein, the Kingdom of Norway, located in another Member State of the European Union or of the European Association of Free Trade, shall be tax exempt if the foreign legal person which is the receiver of dividends meets all the following conditions:

††† 1. is organised in one of the organisation forms provided in Article 20^1 (4);

††† 2. in accordance with the tax legislation of the Member State of the European Union or one of the states of the European Association of Free Trade, namely Island, the Principality of Liechtenstein, the Kingdom of Norway, it is considered to be resident of such state and, pursuant to a convention of avoidance of double taxation concluded with a third country, it is not considered to be resident for the purpose of taxation outside the European Union or the European Association of Free Trade, the Principality of Liechtenstein, the Kingdom of Norway;

††† 3. pays, in accordance with the tax legislation of the Member State of the European Union or one of the states of the European Association of Free Trade, namely Island, the Principality of Liechtenstein, the Kingdom of Norway, profit tax or a similar tax, without the possibility of an option or exception;

††† 4. holds at least 10% of the registered capital of the undertaking which is a Romanian legal person for an uninterrupted period of at least 2 years that ends on the date of payment of dividend.

††† If the beneficiary of the dividends is a permanent establishment of a legal person which is resident in a Member State of the European Union or in one of the states of the European Association of Free Trade, namely Island, the Principality of Liechtenstein, the Kingdom of Norway, located in another Member State of the European Union or of the European Association of Free Trade, in order that this exemption is granted the foreign legal person for which the permanent establishment is pursuing business must meet all the conditions provided in points 1 - 4.

††† In order to grant this exemption, the Romanian legal person which pays the dividend must meet all the following conditions:

††† 1. it is a company established pursuant to the Romanian law and has one of the following forms of organisation: <>, <>, <>;

††† 2. it pays profit tax, according to the provisions of title II, without the possibility of an option or exception.

††† In order to grant this exemption, the Romanian legal person with the registered office in Romania, established according to the European Legislation, which pays the dividend must pay the profit tax, according to the provisions of title II, without the possibility of an option or exception.

††† i) after the date of Romania's accession to the European Union, incomes from savings as interest payments, as defined in Article 124^5, earned in Romania by the natural persons resident in the Member States of the European Union, shall be exempt from tax;

††† j) starting with 1 January 2011, the incomes from interests or royalties, as defined in Article 124^19, obtained from Romania by the legal persons which are residents in the Member States of the European Union or of the European Association of Free Trade, namely Island, the Principality of Liechtenstein, the Kingdom of Norway, or by a permanent establishment of an undertaking from a Member State of the European Union or in one of the states of the European Association of Free Trade, namely Island, the Principality of Liechtenstein, the Kingdom of Norway, located in another Member State of the European Union or of the European Association of Free Trade, shall be tax exempt if the actual receiver of interests and royalties holds at least 25% of the value/number of participation titles held in the Romanian legal person, for an uninterrupted period of at least 2 years that ends on the date of payment of interest or royalties.

††† k) the interests in time deposits and/or in saving instruments, realised by from Romania by the natural persons who are residents in other states than the states of the European Union, starting with 1 January 2009.

††† l) the interests and/or dividends paid by the pension funds, as defined in the legislation of the Member State of the European Union or in one of the states of the European Association of Free Trade.

ART. 118 - Corroborating the provisions of the Fiscal Code with the provisions of the agreements for the double tax avoidance

††† (1) Within the meaning of Article 116, if a taxpayer is a resident of a state with which Romania has concluded an agreement for the double tax avoidance, then the taxation quota which applies to the taxable income obtained by the taxpayer from Romania may not exceed the taxation quota provided in the agreements applied on such income. In case there are different taxation quotas in the domestic legislation or in the agreements for the double tax avoidance, the more favourable of the taxation quotas shall apply. If a taxpayer is a resident of a Member State of the European Union, the taxation quota which shall apply to the taxable income obtained by such taxpayer in Romania is the more favourable of the taxation quotas provided in the domestic legislation, in the legislation of the European Union or in the agreements for the double tax avoidance. The legislation of the European Union shall apply in the relations which Romania has with the Member States of the European Union or of the European Association of Free Trade.

††† (2) For the application of the provisions of the convention for double tax avoidance and of the legislation of the European Union, the non-resident shall have the obligation to present to the payer of the income, at the time when the income is earned, a tax residence certificate issued by the competent authority from its state of residence, as well as a statement on one's own responsibility, as applicable, indicating the quality of beneficiary in case the legislation of the European Union applies. In case the tax residence certificate or, respectively, the statement on one's own responsibility indicating the quality of beneficiary, is not presented within such time limit the provisions of Title V shall apply. At the time of presenting the tax residence certificate or, respectively, the statement on one's own responsibility indicating the quality of beneficiary, the provisions of the convention for double tax avoidance of the legislation of the European Union shall apply and the tax regularisation shall be carried out within the legal prescriptive period. To this end, the tax residence certificate shall mention that the income receiver had, during the prescriptive period, the fiscal residence in the Contracting State with which the convention for double tax avoidance is concluded, in a Member State of the European Union or European Association of Free Trade for the entire period when the incomes were obtained in Romania. The quality of beneficiary for the purpose of applying the European Union legislation shall be proven by the tax residence certificate and, as applicable, the statement on one's own responsibility for meeting all the conditions referring to: the minimum period of holding, the condition for minimum participation in the capital of the Romanian legal person, classification in one of the forms of organisation provided in Title II or Title V, as applicable, the quality of taxpayer which pays the profit tax or a similar tax, without the possibility of an option or exception. The tax residence certificate presented during the year when the payments are made shall also be valid in the first 60 days of the next year, except where the residence conditions have been changed.

††† (3) In case tax withholdings have been made that exceed the quotas of the conventions for double tax avoidance or of the legislation of the European Union, respectively, the amount of the tax withheld in excess may be returned at the request of the income beneficiary or of the non-resident person, respectively.

††† In order to return the tax withheld in excess from the incomes paid by a Romanian resident to non-resident persons, these shall submit an application for the return of tax paid in excess at the resident Romanian income payer.

††† The application for the return of tax shall be submitted by the non-resident person within the legal prescriptive period, established by the legislation of the Romanian State.

††† The return of the tax withheld in excess as to the fiscal burden resulted from the application of the provisions of the conventions for double tax avoidance or, respectively, of the legislation of the European Union corroborated with the domestic legislation, as applicable, shall be carried out independently from the situation of tax obligations of the Romanian resident taxpayer, which pays the income to the non-resident, that is bound by the law to withheld them by Pay-As-You-Earn.

††† (4) The model of the tax residence certificate for the Romanian residents, as well as the time limit for the submission of fiscal residence documents by the non-residents, issued by the authority from their state of residence, shall be established by norms.

ART. 119 - Annual statement regarding Pay-As-You-Earn

††† (1) The payers of income which undergo the Pay-As-You-Earn regime for taxes, except for payers of incomes from wages, according to this title, shall be obliged to submit a statement with regard to calculating and withholding tax for each income beneficiary to the competent tax authority until 30 June of the current fiscal year for the expired year.

††† (1^1) After the date of Romania's accession to the European Union, the payers of incomes in the form of interests shall be obliged to submit an informative statement referring to the payments of such incomes made to the resident natural persons in the Member States of the European Union. The statement shall be submitted by the 28th or 29th February inclusive of the current year for the information referring to the interest payments made during the previous year. The model and contents of the informative statement, as well as the procedure of declaring the incomes from the interests earned in Romania by the natural persons resident in the Member States of the European Union shall be approved by order of the minister of public finance, by the National Agency of Tax Administration, according to the Government Ordinance No 92/2003 on the Fiscal Procedure Code, republished, as subsequently amended and supplemented.

††† (2) *** Repealed

ART. 120 - Certificates of attestation of tax paid by non-residents

††† (1) Any non-resident may submit, himself/itself or by a proxy, an application to the competent tax authority whereby he/it requests the issuing of the certificate of attestation of tax paid to the state budget by himself or by a person acting on his behalf.

††† (2) The competent tax authority shall have the obligation to issue the certificate of attestation of tax paid by the non-residents.

††† (3) The form of the application and the certificate of attestation of tax paid by the non-resident, as well as the conditions of submission and issuing, shall be established by norms.

ART. 121 - Transitory provisions

††† The incomes obtained by external contract partners, non-resident natural and legal persons, and by their independent employees and contractors of such persons, from activities pursued by such persons for the achievement of the investment objective "Cernavodă Nuclear-electric power station - Unit 2" shall be exempt from the tax provided in the present chapter, until the above objective is commissioned.

CHAPTER II - Tax on representative offices

ART. 122 - Taxpayers

††† Any foreign legal person which has a representative office authorised to operate in Romania, according to the law, shall have the obligation to pay an annual tax, according to the present chapter.

ART. 123 - Determination of tax

††† (1) The tax on the representative office for a fiscal year shall equal the equivalent in ROL of EUR 4 000, determined for a fiscal year, at the rate of exchange of the currency exchange market, communicated by the National Bank of Romania, valid on the day prior to the day when the tax paid to the state budget.

††† (2) In case of a foreign legal person which establishes or dissolves a representative office in Romania during a fiscal year, the tax owed for such year shall be calculated in proportion to the number of months during which the representative office was in existence for such fiscal year.

ART. 124 - Payment of tax and submission of tax statement

††† (1) Any foreign legal person shall have the obligation to pay the tax on the representative office to the state budget in two equal instalments, before 25 June and 25 December inclusively.

††† (2) Any foreign legal person which owes the tax on the representative office shall have the obligation to submit an annual statement to the competent tax authority until 28 February, respectively 29 February, of the year of taxation.

††† (3) Any foreign legal person which establishes or dissolves a representative office during a fiscal year shall have the obligation to submit a tax statement to the competent tax authority within 30 days after the date when the representative office is established or dissolved.

††† (4) Representative offices shall be obliged to keep the accounting records provided in legislation in force in Romania.

CHAPTER III - Manner of taxation of savings income obtained from Romania by natural persons residents in the Member States and the application of the exchange of information in relation to this category of incomes

ART. 124^1 - Definition of beneficial owner

††† (1) For the purposes of this chapter, "beneficial owner" means any natural person who receives an interest payment or any natural person for whom an interest payment is secured, unless he provides evidence that it was not received or secured for his own benefit, that is to say that:

††† a) he acts as a paying agent within the meaning of Article 124^3 (1); or

††† b) he acts on behalf of a legal person, an entity which is taxed on its profits under the general arrangements for business taxation, an undertaking for collective investment in transferable securities authorised in accordance with Directive 85/611/EEC of 20 December 1985 on the co-ordination of laws, regulations and administrative provisions relating to undertaking for collective investment in transferable securities (UCITS) or an entity referred to in Article 124^3 (2) and, in the last mentioned case, discloses the name and address of that entity to the economic operator making the interest payment and the latter communicates such information to the competent authority of its Member State where the entity has its establishment, or

††† c) he acts on behalf of another natural person who is the beneficial owner and discloses to the paying agent the identity of that beneficial owner in accordance with Article 124^2 (2).

††† (2) Where a paying agent has information suggesting that the natural person who receives an interest payment or for whom an interest payment is secured may not be the beneficial owner, and where neither the provisions of paragraph 1 a) nor those of paragraph 1 b) apply to that natural person, it shall take reasonable steps to establish the identity of the beneficial owner in accordance with Article 124^2 (2). If the paying agent is unable to identify the beneficial owner, it shall treat the natural person in question as the beneficial owner.

ART. 124^2 - Identity and establishing the place of residence of beneficial owners

††† (1) Romania shall, within its territory, adopt and ensure the application of the procedures necessary to allow the paying agent to identify the beneficial owners and their place of residence for the purposes of the provisions of Articles 124^7 to 124^11. Such procedures shall comply with the minimum standards established in paragraphs (2) and (3).

††† (2) The paying agent shall establish the identity of the beneficial owner on the basis of minimum standards which vary according to when relations between the paying agent and the recipient of the interest are entered into, as follows:

††† a) for contractual relations entered into before 1 January 2004, the paying agent shall establish the identity of the beneficial owner, consisting of his name and address, by using the information at its disposal, in particular pursuant to the regulations in force in its State of establishment and to the provisions of the Council Directive 91/308/EEC of 10 June 1991 on prevention of the use of the financial system for the purpose of money laundering;

††† b) for contractual relations entered into, or transactions carried out in the absence of contractual relations, on or after 1 January 2004, the paying agent shall establish the identity of the beneficial owner, consisting of the name, address and, if there is one, the tax identification number allocated by the Member State of residence for tax purposes. These details shall be established on the basis of the passport or of the official identity card presented by the beneficial owner. If it does not appear on that passport or on that official identity card, the address shall be established on the basis of any other documentary proof of identity presented by the beneficial owner. If the tax identification number is not mentioned on the passport, on the official identity card or any other documentary proof of identity, including, possibly, the certificate of residence for tax purposes, presented by the beneficial owner, the identity shall be supplemented by a reference to the latter's date and place of birth established on the basis of his passport or official identification card.

††† (3) The paying agent shall establish the residence of the beneficial owner on the basis of minimum standards which vary according to when relations between the paying agent and the recipient of the interest are entered into. Subject to the conditions set out below, residence shall be considered to be situated in the country where the beneficial owner has his permanent address:

††† a) for contractual relations entered into before 1 January 2004, the paying agent shall establish the residence of the beneficial owner by using the information at its disposal, in particular pursuant to the regulations in force in its State of establishment and to the provisions of Directive 91/308/EEC;

††† b) for contractual relations entered into, or transactions carried out in the absence of contractual relations, on or after 1 January 2004, the paying agent shall establish the residence of the beneficial owner on the basis of the address mentioned on the passport, on the official identity card or, if necessary, on the basis of any documentary proof of identity presented by the beneficial owner and according to the following procedure: for natural persons presenting a passport or official identity card issued by a Member State who declare themselves to be resident in a third country, residence shall be established by means of a tax residence certificate issued by the competent authority of the third country in which the natural person claims to be resident. Failing the presentation of such a certificate, the Member State which issued the passport or other official identity document shall be considered to be the country of residence.

ART. 124^3 - Definition of paying agent

††† (1) For the purposes of this chapter, "paying agent" means any economic operator who pays interest to or secures the payment of interest for the immediate benefit of the beneficial owner, whether the operator is the debtor of the debt claim which produces the interest or the operator charged by the debtor or the beneficial owner with paying interest or securing the payment of interest.

††† (2) Any entity established in a Member State to which interest is paid or for which interest is secured for the benefit of the beneficial owner shall also be considered a paying agent upon such payment or securing of such payment. This provision shall not apply if the economic operator has reason to believe, on the basis of official evidence produced by that entity, that:

†† †a) it is a legal person, with the exception of those legal persons referred to in paragraph 5; or

††† b) its profits are taxed under the general arrangements for business taxation; or

††† c) it is an undertaking for collective investment in transferable securities authorised in accordance with Directive 85/611/EEC. An economic operator paying interest to, or securing interest for, such an entity established in another Member State which is considered a paying agent under this paragraph shall communicate the name and address of the entity and the total amount of interest paid to, or secured for, the entity to the competent authority of its Member State of establishment, which shall pass this information on to the competent authority of the Member State where the entity is established.

††† (3) The entity referred to in paragraph (2) shall, however, have the option of being treated for the purposes of this chapter as an undertaking for collective investment in transferable securities as referred to in 2 c). The exercise of this option shall require a certificate to be issued by the Member State in which the entity is established and presented to the economic operator by that entity. Member States shall lay down the detailed rules for this option for entities established in their territory.

††† (4) Where the economic operator and the entity referred to in paragraph (2) are established in Romania, Romania shall take the necessary measures to ensure that the entity complies with the provisions of this chapter when it acts as a paying agent.

††† (5) The legal persons exempt from paragraph 2 a) are:

††† a) in Finland: avoinyhtio (y) and kommandiittiyhtio (ky)/oppet bolag and kommanditbolag;

††† b) in Sweden: handelsbolag (HB) and kommanditbolag (KB).

ART. 124^4 - Definition of competent authority

††† For the purposes of this chapter, "competent authority" means:

††† a) for Romania - the National Agency of Tax Administration;

††† b) for third countries - the competent authority for the purposes of bilateral or multilateral conventions for double tax avoidance or, failing that, such other authority as is competent to issue certificates of residence for tax purposes.

ART. 124^5 - Definition of interest payment

††† (1) For the purposes of this chapter, "interest payment" means:

††† a) interest paid or credited to an account, relating to debt claims of every kind, whether or not secured by mortgage and whether or not carrying a right to participate in the debtor's profits, and, in particular, income from government securities and income from bonds or debt securities, including premiums and prizes attaching to such securities, bonds or debt securities; penalty charges for late payments shall not be regarded as interest payments;

††† b) interest accrued or capitalised at the sale, refund or redemption of the debt claims referred to in letter a);

††† c) income deriving from interest payments either directly or through an entity referred to in Article 124^3 (2), distributed by:

††† - an undertaking for collective investment in transferable securities authorised in accordance with Directive 85/611/EEC,

††† - entities which qualify for the option under Article 124^3 (3),

††† - undertakings for collective investment established outside the territory referred to in Article 124^6;

††† d) income realised upon the sale, refund or redemption of shares or units in the following undertakings and entities, if they invest directly or indirectly, via other undertakings for collective investment or entities referred to below, more than 40% of their assets in debt claims as referred to in letter a), provided that such income corresponds to gains derived directly or indirectly from the interest payment as defined under letters a) and b). The entities referred to are:

††† - an undertaking for collective investment in transferable securities authorised in accordance with Directive 85/611/EEC,

††† - entities which qualify for the option under Article 124^3 (3),

††† - undertakings for collective investment established outside the territory referred to in Article 124^6.

††† (2) As regards paragraph 1 c) and d), when a paying agent has no information concerning the proportion of the income which derives from interest payments, the total amount of the income shall be considered an interest payment.

††† (3) As regards paragraph 1 d), when a paying agent has no information concerning the percentage of the assets invested in debt claims or in shares or units, that percentage shall be considered to be above 40%. Where he cannot determine the amount of income realised by the beneficial owner, the income shall be deemed to correspond to the proceeds of the sale, refund or redemption of the shares or units.

††† (4) When interest, as defined in paragraph 1, is paid to or credited to an account held by an entity referred to in Article 124^3 (2), such entity not having qualified for the option under Article 124^3 (3), it shall be considered an interest payment by such entity.

††† (5) As regards paragraph 1 b) and d), Romania shall have the option of requiring paying agents in their territory to annualise the interest over a period of time which may not exceed one year, and treating such annualised interest as an interest payment even if no sale, redemption or refund occurs during that period.

††† (6) By way of derogation from paragraphs 1 c) and d), Romania shall have the option of excluding from the definition of interest payment any income referred to in those provisions from undertakings or entities established within their territory where the investment in debt claims referred to in paragraph 1 a) of such entities has not exceeded 15% of their assets. Likewise, by way of derogation from paragraph (4), Romania shall have the option of excluding from the definition of interest payment in paragraph (1) interest paid or credited to an account of an entity referred to in Article 124^3 (2) which has not qualified for the option under Article 124^3 (3) and is established within their territory, where the investment of such an entity in debt claims referred to in paragraph 1 a) has not exceeded 15% of its assets. The exercise of such option by a Member State shall be binding on other Member States.

††† (7) The percentage referred to in paragraph (1) d) and paragraph (3) shall from 1 January 2011 be 25%.

††† (8) The percentages referred to in paragraph (1) d) and in paragraph 6 shall be determined by reference to the investment policy as laid down in the fund rules or instruments of incorporation of the undertakings or entities concerned and, failing which, by reference to the actual composition of the assets of the undertakings or entities concerned.

ART. 124^6 - Territorial scope

††† The provisions of this chapter shall apply to interest paid by a paying agent established within the territory to which the Treaty establishing the European Community applies by virtue of Article 299 thereof.

ART. 124^7 - Information reporting by the paying agent

††† (1) Where the beneficial owner is resident in a Member State other than that in which the paying agent is established, the minimum amount of information to be reported by the paying agent to the competent authority of Romania shall consist of:

††† a) the identity and residence of the beneficial owner established in accordance with Article 124^2;

††† b) the name and address of the paying agent;

††† c) the account number of the beneficial owner or, where there is none, identification of the debt claim giving rise to the interest;

††† d) information concerning the interest payment in accordance with paragraph (2).

††† (2) The minimum amount of information concerning interest payment to be reported by the paying agent shall distinguish between the following categories of interest and indicate:

††† a) in the case of an interest payment within the meaning of Article 124^5 (1) a): the amount of interest paid or credited;

††† b) in the case of an interest payment within the meaning of Article 124^5 (1) b) or d): either the amount of interest or income referred to in those paragraphs or the full amount of the proceeds from the sale, redemption or refund;

††† c) in the case of an interest payment within the meaning of Article 124^5 (1) c): either the amount of income referred to in that paragraph or the full amount of the distribution;

††† d) in the case of an interest payment within the meaning of Article 124^5 (4): the amount of interest attributable to each of the members of the entity referred to in Article 124^3 (2) who meet the conditions of Articles 124^1 (1);

††† e) in the case of an interest payment within the meaning of Article 124^5 (5): the amount of annualised interest.

††† (3) However, Member States may restrict the minimum amount of information concerning interest payment to be reported by the paying agent to the total amount of interest or income and to the total amount of the proceeds from sale, redemption or refund.

ART. 124^8 - Automatic exchange of information

††† (1) The competent authority of the Member State of the paying agent shall communicate the information referred to in Article 124^7 to the competent authority of the Member State of residence of the beneficial owner.

††† (2) The communication of information shall be automatic and shall take place at least once a year, within six months following the end of the fiscal year, for all interest payments made during that year.

††† (3) The provisions of this chapter shall be supplemented by those of Chapter V of the present title, except for the provisions of Article 124^35.

ART. 124^9 - Transitional period for three Member States

††† (1) During a transitional period starting on the date referred to in paragraphs (2) and (3), Belgium, Luxembourg and Austria shall not be required to apply the provisions regarding the exchange of information concerning the savings income. They shall, however, receive information from the other Member States. During the transitional period, the aim of this chapter shall be to ensure minimum effective taxation of savings incomes in the form of interest payments made in one Member State to beneficial owners who are natural persons resident for tax purposes in another Member State.

††† (2) The transitional period shall end at the end of the first full fiscal year following the later of the following dates:

††† a) the date of entry into force of an agreement between the European Community, following a unanimous decision of the Council, and the last of the Swiss Confederation, the Principality of Liechtenstein, the Republic of San Marino, the Principality of Monaco and the Principality of Andorra, providing for the exchange of information upon request as defined in the OECD Model Agreement on Exchange of Information on Tax Matters released on 18 April 2002 (hereinafter the "OECD Model Agreement") with respect to interest payments, as defined in this chapter, made by paying agents established within their respective territories to beneficial owners resident in the territory to which this chapter applies, in addition to the simultaneous application by those same countries of a withholding tax on such payments at the rate defined for the corresponding periods referred to in Article 124^10;

††† b) the date on which the Council agrees by unanimity that the United States of America is committed to exchange of information upon request as defined in the OECD Model Agreement with respect to interest payments made by paying agents established within its territory to beneficial owners resident in the territory to which the provisions on the automatic exchange of information on savings income apply.

††† (3) At the end of the transitional period, Belgium, Luxembourg and Austria shall be required to apply the provisions on the automatic exchange of information on savings income, as referred to in Article 124^7 and 124^8 and they shall cease to apply the withholding tax and the revenue sharing provided for in Articles 124^10 and 124^11. If, during the transitional period, Belgium, Luxembourg or Austria elects to apply the provisions on the automatic exchange of information on savings income, as referred to in Article 124^7 and 124^8, it shall no longer apply the withholding tax and the revenue sharing provided for in Articles 124^10 and 124^11.

ART. 124^10 - Withholding tax

††† (1) During the transitional period referred to in Article 124^9, where the beneficial owner is resident in a Member State other than that in which the paying agent is established, Belgium, Luxembourg and Austria shall levy a withholding tax at a rate of 15% during the first three years of the transitional period (1 July 2005 - 30 June 2008), 20% for the subsequent three years (1 July 2008 - 30 June 2011) and 35% thereafter (starting on 1 July 2011).

††† (2) The paying agent shall levy withholding tax as follows:

††† a) in the case of an interest payment within the meaning of Article 124^5 (1) a): on the amount of interest paid or credited;

††† b) in the case of an interest payment within the meaning of Article 124^5 (1) b) or† d): on the amount of interest or income referred to in those paragraphs or by a levy of equivalent effect to be borne by the recipient on the full amount of the proceeds of the sale, redemption or refund;

††† c) in the case of an interest payment within the meaning of Article 124^5 (1) c): on the amount of income referred to in that paragraph;

††† d) in the case of an interest payment within the meaning of Article 124^5 (4): on the amount of interest attributable to each of the members of the entity referred to in Article 124^3 (2) who meet the conditions of Articles 124^1 (1);

††† e) where a Member State exercises the option under Article 124^5 (5): on the amount of annualised interest.

††† (3) For the purposes of applying the provisions of paragraph (2) a) and b), withholding tax shall be levied pro rata to the period of security of the debt claim by the beneficial owner. When the paying agent is unable to determine the period of security on the basis of information in its possession, it shall treat the beneficial owner as having held the debt claim throughout its period of existence unless he provides evidence of the date of acquisition.

††† (4) The imposition of withholding tax by the Member State of the paying agent shall not preclude the Member State of residence for tax purposes of the beneficial owner from taxing the income in accordance with its national law, subject to compliance with the Treaty establishing the European Community.

††† (5) During the transitional period, Member States levying withholding tax may provide that an economic operator paying interest to, or securing interest for, an entity referred to in Article 124^3 (2) c) established in another Member State shall be considered the paying agent in place of the entity and shall levy the withholding tax on that interest, unless the entity has formally agreed to its name, address and the total amount of interest paid to it or secured for it being communicated in accordance with the last subparagraph of Article 124^3 (2) c).

ART. 124^11 - Revenue sharing

††† (1) Member States levying withholding tax in accordance with Article 124^10 (1) shall retain 25% of their revenue and transfer 75% of the revenue to the Member State of residence of the beneficial owner of the interest.

††† (2) Member States levying withholding tax in accordance with Article 124^10 (5) shall retain 25% of the revenue and transfer 75% to the other Member States proportionate to the transfers carried out pursuant to paragraph (1).

††† (3) Such transfers shall take place at the latest within a period of six months following the end of the fiscal year of the Member State of the paying agent in the case of paragraph (1), or that of the Member State of the economic operator in the case of paragraph (2).

ART. 124^12 - Exceptions to the withholding tax procedure

††† (1) Member States levying withholding tax in accordance with Article 124^10 shall provide for one or both of the following procedures in order to ensure that the beneficial owners may request that no tax be withheld:

††† a) a procedure which allows the beneficial owner expressly to authorise the paying agent to report information in accordance with Articles 124^7 and 124^8. Such authorisation shall cover all interest paid to the beneficial owner by that paying agent. In such cases, the provisions of Article 124^8 shall apply;

††† b) a procedure which ensures that withholding tax shall not be levied where the beneficial owner presents to his paying agent a certificate drawn up in his name by the competent authority of his State of residence for tax purposes in accordance with paragraph (2).

††† (2) At the request of the beneficial owner, the competent authority of the Member State of residence for tax purposes shall issue a certificate indicating:

††† a) the name, address and tax or other identification number or, failing such, the date and place of birth of the beneficial owner;

††† b) the name and address of the paying agent;

††† c) the account number of the beneficial owner or, where there is none, the identification of the security.

††† (3) Such certificate shall be valid for a period not exceeding three years. It shall be issued to any beneficial owner who requests it, within two months following such request.

ART. 124^13 - Measures adopted by Romania with a view to carrying out the exchange of information with the states that undergo a transitional period upon savings taxation

††† The procedure for administering this chapter in the relation with the 3 states that undergo a transitional period in the implementation of the provisions of this chapter shall be set out by Government decision elaborated jointly with the Ministry of Public Finance and the National Agency of Tax Administration, with the advisory opinion of the Ministry of European Integration and of the Ministry of Foreign Affairs.

ART. 124^14 - Elimination of double taxation

††† (1) Romania shall ensure for the resident beneficial owners the elimination of any double taxation which might result from the imposition of the withholding tax in the countries undergoing a transitional period, referred to in Article 124^9, in accordance with the provisions of paragraph (2).

††† (2) Romania shall refund to the beneficial owner resident in Romania the withholding tax referred to in Article 124^10.

ART. 124^15 - Negotiable debt securities

††† (1) During the transitional period referred to in Article 124^9, but until 31 December 2010 at the latest, domestic and international bonds and other negotiable debt securities which have been first issued before 1 March 2001 or for which the original issuing prospectuses have been approved before that date by the competent authorities within the meaning of Council Directive 80/390/EEC co-ordinating the requirements for the drawing up, scrutiny and distribution of the listing particulars to be published for the admission of securities to official stock exchange listing, or by the responsible authorities in third countries shall not be considered as debt claims within the meaning of Article 124^5 (1) a), provided that no further issues of such negotiable debt securities are made on or after 1 March 2002. However, should the transitional period continue beyond 31 December 2010, the provisions of this paragraph shall only continue to apply in respect of such negotiable debt securities:

††† a) which contain gross-up and early redemption clauses and

††† b) where the paying agent as defined in Article 124^3 (1) and (2) is established in one of the Member States applying the withholding tax and that paying agent pays interest to, or secures the payment of interest for the immediate benefit of, a beneficial owner resident in Romania. If a further issue is made on or after 1 March 2002 of an aforementioned negotiable debt security issued by a Government or a related entity acting as a public authority or whose role is recognised by an international treaty, within the meaning of Article 124^16, the entire issue of such security, consisting of the original issue and any further issue, shall be considered a debt claim within the meaning of Article 124^5 (1) a).

††† (2) The provisions of paragraph (1) shall not prevent Romania from taxing the income from the negotiable debt securities referred to in paragraph (1) in accordance with their tax laws.

ART. 124^16 - Annex referring to the list of related entities referred to in Article 124^15

††† For the purposes of Article 124^15, the following entities will be considered to be related entities acting as a public authority or whose role is recognised by an international treaty:

††† 1. entities within the European Union:

††† Belgium

††† - Vlaams Gewest (Flemish Region);

††† - Region wallonne (Walloon Region);

††† - Region bruxelloise/Brussels Gewest (Brussels Region);

††† - Communaute francaise (French Community);

††† - Vlaamse Gemeenschap (Flemish Community);

††† - Deutschsprachige Gemeinschaft (German-speaking Community);

††† Bulgary

††† - municipalities;

††† Spain

††† - Xunta de Galicia (Regional Executive of Galicia);

††† - Junta de Andalucia (Regional Executive of Andalusia);

††† - Junta de Extremadura (Regional Executive of Extremadura);

††† - Junta de Castilla - La Mancha (Regional Executive of Castilla - La Mancha);

††† - Junta de Castilla - Leon (Regional Executive of Castilla - Leon);

††† - Gobierno Foral de Navarra (Regional Government of Navarre);

††† - Govern de les Illes Balears (Government of the Balearic Islands);

††† - Generalitat de Catalunya (Autonomous Government of Catalonia);

††† - Generalitat de Valencia (Autonomous Government of Valencia);

††† - Diputacion General de Aragon (Regional Council of Aragon);

††† - Gobierno de las Islas Canarias (Government of the Canary Islands);

††† - Gobierno de Murcia (Government of Murcia);

††† - Gobierno de Madrid (Government of Madrid);

††† - Gobierno de la Comunidad Autonoma del Pais Vasco/Euzkadi (Government of the Autonomous Community of the Basque Country);

††† - Diputacion Foral de Guipuzcoa (Regional Council of Guipuzcoa);

††† - Diputacion Foral de Vizcaya/Bizkaia (Regional Council of Vizcaya);

††† - Diputacion Foral de Alava (Regional Council of Alava);

††† - Ayuntamiento de Madrid (City Council of Madrid);

††† - Ayuntamiento de Barcelona (City Council of Barcelona);

†† †- Cabildo Insular de Gran Canaria (Island Council of Gran Canaria);

††† - Cabildo Insular de Tenerife (Island Council of Tenerife);

††† - Instituto de Credito Oficial (Public Credit Institution);

††† - Instituto Catalan de Finanzas (Finance Institution of Catalonia);

††† - Instituto Valenciano de Finanzas (Finance Institution of Valencia);

††† Greece

††† - Organismos Tegepikoinonion Ellados (National Telecommunications Organisation);

††† - Organismos Siderodromon Ellados (National Railways Organisation);

††† - Demosia Epikeirese Elektrismou (Public Electricity Company);

††† France

††† - France La Caisse d'amortissement de la dette sociale (CADES) (Social Debt Redemption Fund);

††† - L'Agence francaise de developpement (AFD) (French Development Agency);

††† - Reseau Ferre de France (RFF) (French Rail Network);

††† - Caisse Nationale des Autoroutes (CNA) (National Motorways Fund);

††† - Assistance publique Hopitaux de Paris (APHP) (Paris Hospitals Public Assistance);

††† - Charbonnages de France (CDF) (French Coal Board);

††† - Entreprise miniere et chimique (EMC) (Mining and Chemicals Company);

††† Italy

††† - Regions;

††† - Provinces;

††† - Municipalities;

††† - Cassa Depositi e Prestiti (Deposits and Loans Fund);

††† Latvia

††† - Pasvaldibas (local governments);

††† Poland

††† - gminy (communes);

††† - powiaty (districts);

††† - wojewodztwa (regions);

††† - zwiazki gmţn (associations of communes);

††† - powiatow (associations of districts);

††† - wojewodztw (associations of regions);

††† - miasto stoleczne Warszawa (capital Warsaw);

††† - Agencja Restrukturyzacji i Modernizacji Rolnictwa (Agricultural Restructuring and Modernisation Agency);

††† - Agencja Nieruchomosci Rolnych (Farming Property Agency);

††† Portugalia

††† - Regiao Autonoma da Madeira (Autonomous Region of Madeira);

††† - Regiao Autonoma dos Acores (Autonomous Region of Azores);

††† Romania

††† - local public administration authorities;

††† Slovakia

††† - mesta a obce (municipalities);

††† - Zeleznice Slovenskej Republiky (Slovak Railway Company);

††† - Statny fond cestneho hospodarstva (State Fund for Road Administration);

††† - Slovenske elektrarne (Slovak Energy Companies);

††† - Vodohospodarska vystavba (Water Saving Company).

††† 2. international entities:

††† - European Bank for Reconstruction and Development;

††† - European Investment Bank;

††† - Asian Development Bank;

††† - African Development Bank;

††† - World Bank - International Bank for Restructuring and Development - International Monetary Fund;

††† - International Finance Corporation;

††† - Inter-American Development Bank;

††† - Council of Europe Social Development Fund;

††† - Euratom;

††† - European Community;

††† - Andean Development Corporation (CAF);

††† - Eurofima;

††† - European Coal and Steel Community;

††† - Nordic Investment Bank;

††† - Caribbean Development Bank.

††† The provisions of Article 124^15 are without prejudice to any international obligations that Romania may have entered into with respect to the above-mentioned international entities.

††† 3. entities in third countries:

††† - those entities that meet the following criteria:

††† a) the entity is clearly considered to be a public entity according to the national criteria;

††† b) such public entity is a non-market producer (outside the Community) which administers and finances a group of activities, principally providing non-market goods and services (outside the Community), intended for the benefit of the community and which are effectively controlled by general government;

††† c) such public entity is a large and regular issuer of debt;

††† d) the State concerned is able to guarantee that such public entity will not exercise early redemption in the event of gross-up clauses.

ART. 124^17 - Date of application

††† The provisions of this chapter, that are a transposition of the provisions of Directive 2003/48/EC of the Council, of 3 June 2003, on taxation of savings income in the form of interest payments, as subsequently amended, shall apply starting with the date of accession of Romania to the European Union.

CHAPTER IV - Royalties and interests in associated companies

ART. 124^18 - Scope and procedure

††† (1) Interest or royalty payments arising in Romania shall be exempt from any taxes imposed on those payments in Romania, whether by deduction at source or by assessment, provided that the beneficial owner of the interest or royalties is a company of another Member State or a permanent establishment situated in another Member State of a company of a Member State.

††† (2) A payment made by a company of a Member State or by a permanent establishment situated in another Romania shall be deemed to arise in Romania, hereafter referred to as the "source State".

††† (3) A permanent establishment shall be treated as the payer of interest or royalties only insofar as those payments represent a tax-deductible expense for the permanent establishment in Romania.

††† (4) A company of a Member State shall be treated as the beneficial owner of interest or royalties only if it receives those payments for its own benefit and not as an intermediary, such as an agent, trustee or authorised signatory, for some other person.

††† (5) A permanent establishment shall be treated as the beneficial owner of interest or royalties:

††† a) if the debt-claim or right to use the information in respect of which interest or royalty payments arise is effectively connected with that permanent establishment; and

††† b) if the interest or royalty payments represent income in respect of which that permanent establishment is subject in the Member State in which it is situated to one of the taxes mentioned in Article 124^20 a) (iii) or in the case of Belgium to the "impot des non-residents/belasting der niet-verblijfhouders" or in the case of Spain to the "tax on the income of non-residents" or to a tax which is identical or substantially similar and which is imposed after the date of entry into force of this chapter in addition to, or in place of, those existing taxes.

††† (6) Where a permanent establishment of a company of a Member State is treated as the payer, or as the beneficial owner, of interest or royalties, no other part of the company shall be treated as the payer, or as the beneficial owner, of that interest or those royalties for the purposes of this article.

††† (7) This article shall apply only if the company which is the payer, or the company whose permanent establishment is treated as the payer, of interest or royalties is an associated company of the company which is the beneficial owner, or whose permanent establishment is treated as the beneficial owner, of that interest or those royalties.

††† (8) This article shall not apply where interest or royalties are paid by or to a permanent establishment situated in a third State of a company of a Member State and the business of the company is wholly or partly pursued through that permanent establishment.

††† (9) The provisions of this article shall not prevent Romania from taking interest or royalties received by the resident companies, by permanent establishments of the resident companies or by permanent establishments situated in Romania into account when applying its tax law.

††† (10) The provisions of this chapter shall not apply to an undertaking of another Member State or a permanent establishment of an undertaking of another Member State, when the conditions established in Article 124^20 b) have not been kept for an uninterrupted period of 2 years.

††† (11) The fulfilment of the requirements laid down in this Article and in Article 124^20 be substantiated at the time of payment of the interest or royalties by an attestation. If fulfilment of the requirements laid down in this article has not been attested at the time of payment, the tax shall be withheld by Pay-As-You-Earn.

††† (12) *** Repealed

††† (13) For the purposes of paragraph (11), the attestation to be given shall, in respect of each payment contract, be valid for at least one year but for not more than three years from the date of issue and shall contain the following information:

††† a) proof of the residence for tax purposes, for the company receiving interests or royalties from Romania and, where necessary, the existence of a permanent establishment certified by the tax authority of the Member State in which the company receiving interests or royalties is resident for tax purposes or in which the permanent establishment is situated;

††† b) beneficial ownership of interests or royalties by the company receiving such payments in accordance with the provisions of paragraph (4) or the existence of conditions in accordance with the provisions of paragraph (5) where a permanent establishment is the recipient of the payment;

††† c) fulfilment of the requirements in accordance with Article 124^20 a) (iii) in the case of the receiving company;

††† d) a minimum held in accordance with Article 124^20 b);

††† e) the period for which the holding referred to in d) has existed.

†† †Member States may request in addition the legal justification for the payments under the contract, e.g. they may request the loan agreement or licensing contract.

††† (14) If the requirements for exemption cease to be fulfilled, the receiving company or permanent establishment shall immediately inform the paying company or permanent establishment.

††† (15) If the paying company or permanent establishment has withheld tax at source on the income to be tax exempt, according to this article, a claim may be made for repayment of that tax at source. To this end the information specified in paragraph (13) may be required. The application for repayment of tax must be transmitted within the legal prescriptive period.

††† (16) The tax withheld at source shall be repaid within one year following the receipt of the tax refund application and such supporting information as it may reasonably ask for. If the tax withheld at source has not been refunded within that period, the receiving company or permanent establishment shall be entitled, upon expiry of the year in question, to interest on the tax which is to be refunded. The interest shall be calculated according to the provisions of the Fiscal Procedure Code.

ART. 124^19 - Definition of interest and royalties

††† For the purposes of this chapter:

††† a) the term "interest" means income from debt-claims of every kind, whether or not secured by mortgage and whether or not carrying a right to participate in the debtor's profits, and in particular, income from securities and income from bonds or debt securities, including premiums and prizes attaching to such securities, bonds or debt securities; penalty charges for late payment shall not be regarded as interest;

††† b) the term "royalties" means payments of any kind received as a consideration for the use of, or the right to use, any copyright of literary, artistic or scientific work, including cinematographic films and software, any patent, trade mark, design or model, plan, secret formula or process, or for information concerning industrial, commercial or scientific experience; payments for the use of, or the right to use, industrial, commercial or scientific equipment shall be regarded as royalties.

ART. 124^20 - Definition of company, associated company and permanent establishment

††† For the purposes of this chapter:

††† a) the term "company of a Member State" means any company:

††† (i) taking one of the forms listed in the Article 124^26; and

††† (ii) which in accordance with the tax laws of a Member State is considered to be resident in that Member State and is not, within the meaning of a Double Taxation Convention on Income and Gains concluded with a third state, considered to be resident for tax purposes outside the Community; and

††† (iii) which is subject to one of the following taxes without being exempt, or to a tax which is identical or substantially similar and which is imposed after the date of entry into force of this article in addition to, or in place of, those existing taxes:

††† - coropration tax/vennootschapsbelasting, in Belgium;

††† - selskabsskat, in Danmark;

††† - Korperschaftsteuer, in Germany;

††† - phdros eisodematos uomikou prosopon, in Greece;

††† - impuesto sobre sociedades, in Spain;

††† - impot sur les societes, in France;

††† - corporation tax, in Ireland;

††† - imposta sul reddito delle persone giuridiche, in Italy;

††† - impot sur le revenu des collectivites, in Luxembourg;

††† - vennootschapsbelasting, in Netherlands;

††† - Korperschaftsteuer, in Austria;

††† - imposto sobre o rendimento da pessoas colectivas, in Portugal;

††† - vhteisoien tulovero/ţn komstskatten, in Finland;

††† - statlţn g ţn komstskatt, in Sweden;

††† - corporation tax, in the United Kingdom of Great Britain and Northern Ireland;

††† - dan z prijmu pravnickych osob, in Czech Republic;

††† - tulumaks, in Estonia;

††† - phdros eisodematos, in Cyprus;

††† - uznemumu ienakuma nodoklis, in Latvia;

††† - pelno mokestis, in Lithuania;

††† - tarsasagi ado, in Hungary;

††† - taxxa fuq l-income, in Malta;

††† - todatek dochodowy od osob prawnych, in Poland;

††† - davek od dobicka praznih oseb, in Slovenia;

††† - dan z prijmov pravnickych osob, in Slovakia;

††† - profit tax, in Romania;

††† - korporativen danăk*) in Bulgaria;

††† b) a company is an "associated company" of a second company if, at least:

††† (i) the first company has a direct minimum security of 25% in the capital of the second company, or

††† (ii) the second company has a direct minimum security of 25% in the capital of the first company, or

††† (iii) a third company has a direct minimum security of 25% both in the capital of the first company and in the capital of the second company.

††† Securities in the registered capital must involve only companies resident in Community territory.

††† c) the term "permanent establishment" means a fixed place of business situated in a Member State through which the business of a company of another Member State is wholly or partly pursued.

------------

*) The letters in the Cyrillic alphabet have been transformed into Latin letters.

ART. 124^21 - Exclusion of payments as interest or royalties

††† (1) The benefits of this chapter shall not be granted in the following cases:

††† a) payments which are treated as a distribution of profits or as a repayment of capital under the Romanian law;

††† b) payments from debt-claims which carry a right to participate in the debtor's profits;

††† c) payments from debt-claims which entitle the creditor to exchange his right to interest for a right to participate in the debtor's profits;

††† d) payments from debt-claims which contain no provision for repayment of the principal amount or where the repayment is due more than 50 years after the date of issue.

††† (2) Where, by reason of a special relationship between the payer and the beneficial owner of interest or royalties, or between one of them and some other person, the amount of the interest or royalties exceeds the amount which would have been agreed by the payer and the beneficial owner in the absence of such a relationship, the provisions of this article shall apply only to the latter amount, if any.

ART. 124^22 - Fraud and abuse

††† (1) The provisions of this chapter shall not preclude the application of domestic or agreement-based provisions, agreements to which Romania is a party, required for the prevention of fraud or abuse.

††† (2) Romania may, in the case of transactions for which the principal motive or one of the principal motives is tax evasion, tax avoidance or abuse, withdraw the benefits established in this chapter or refuse to apply this chapter.

ART. 124^23 - Transitional rules for Czech Republic, Greece, Spain, Latvia, Lithuania, Poland, Portugal and Slovakia

††† (1) Greece, Latvia, Poland and Portugal shall be authorised not to apply the provisions of on exemption on the payment of interests and royalties among associated companies by 1 July 2005 and during a transitional period of eight years starting on 1 July 2005, the rate of tax on payments of interest or royalties made to an associated company of another Member State or to a permanent establishment situated in another Member State of an associated company of a Member State must not exceed 10% during the first four years and 5% during the final four years.

††† Lithuania shall be authorised not to apply the provisions on exemption on the payment of interests and royalties among associated companies until 1 July 2005. During a transitional period of six years, starting on 1 July 2005, the rate of tax applied in this country on payments of royalties made to an associated company of another Member State or to a permanent establishment situated in another Member State of an associated company of a Member State must not exceed 10%. During the first 4 years of the six-year transitional period, the rate of tax on payments of interests made to an associated company of another Member State or to a permanent establishment situated in another Member State of an associated company of a Member State must not exceed 10%; for the next 2 years the rate of tax applied to such interest payment shall not exceed 5%.

††† Spain and Czech Republic shall be authorised, for royalty payments only, not to apply the provisions on exemption on the payment of interests and royalties among associated companies until 1 July 2005. During a transitional period of six years, starting on 1 July 2005, the rate of tax applied in these countries on payments of royalties made to an associated company of another Member State or to a permanent establishment situated in another Member State of an associated company of a Member State must not exceed 10%. Slovakia shall be authorised, for royalty payments only, not to apply the provisions on tax exemption for a period of two years, starting with 1 May 2004.

††† These transitional rules shall, however, remain subject to the continued application of any rate of tax lower than those referred to above provided by bilateral agreements concluded between Czech Republic, Greece, Spain, Latvia, Lithuania, Poland, Portugal and Slovakia and other Member States.

††† (2) Where a company resident in Romania, or a permanent establishment situated in Romania of a company of a Member State:

††† a) receives interest or royalties from an associated company of Greece, Latvia, Lithuania, Poland or Portugal;

††† b) receives royalties from an associated company of Czech Republic, Spain or Slovakia;

††† c) receives interest or royalties from a permanent establishment situated in Greece, Latvia, Lithuania, Poland or Portugal of an associated company of a Member State, or

††† d) receives royalties from a permanent establishment situated in Czech Republic, Spain or Slovakia of an associated company of a Member State,

††† Romania shall allow an amount equal to the tax paid in Czech Republic, Greece, Spain, Latvia, Lithuania, Poland, Portugal and Slovakia in accordance with paragraph (1) on that income. The amount is granted as a deduction from the tax on the income of the company or permanent establishment which received that income.

††† (3) The deduction provided for in paragraph (2) need not exceed the lower of:

††† a) the tax payable in Czech Republic, Greece, Spain, Latvia, Lithuania, Poland, Portugal and Slovakia on such income on the basis of paragraph (1), or

††† b) that part of the tax on the income of the company or permanent establishment which received the interest or royalties, as calculated before the deduction is given, which is attributable to those payments under the Romanian national law.

ART. 124^24 - Delimitation clause

††† The provisions of this chapter shall not affect the application of domestic or agreement-based provisions, agreements to which Romania is a party, which are designed to eliminate or mitigate the double taxation of interest and royalties.

ART. 124^25 - Measures adopted by Romania

††† The procedure for administering this chapter shall be set out by Government decision elaborated jointly with the Ministry of Public Finance and the National Agency of Tax Administration, with the advisory opinion of the Ministry of European Integration and of the Ministry of Foreign Affairs.

ART. 124^26 - List of companies covered by Article 124^20 a) (iii)

††† The companies covered by Article 124^20 a) (iii) shall be the following:

††† a) companies under Belgian law known as "naamloze vennootschap/societe anonyme, commanditaire vennootschap op aandelen/societe en commandite par actions, besloten vennootschap met beperkte aansprakelijkheid/societe privee a responsabilite limitee" and those public law bodies that operate under private law;

††† b) companies under Danish law known as "aktieselskab" and "anpartsselskab";

††† c) companies under German law known as "Aktiengesellschaft, Kommanditgesellschaft auf Aktien, Gesellschaft mit beschrankter Haftung" and "bergrechtliche Gewerkschaft";

††† d) companies under Greek law known as "anonume etairia";

††† e) companies under Spanish law known as "sociedad anonima, sociedad comanditaria por acciones, sociedad de responsabilidad limitada" and those public law bodies which operate under private law;

††† f) companies under French law known as "societe anonyme, societe en commandite par actions, societe a responsabilite limitee" and industrial and commercial public establishments and undertakings;

††† g) companies in Irish law known as public companies limited by shares or by guarantee, private companies limited by shares or by guarantee, bodies registered under the Industrial and Provident Societies Acts or building societies registered under the Building Societies Acts;

††† h) companies under Italian law known as "societa per azioni, societa in accomandita per azioni, societa a responsabilita limitata" and public and private entities pursuing industrial and commercial activities;

†† †i) companies under Luxembourg law known as "societe anonyme, societe en commandite par actions and societe a responsabilite limitee";

††† j) companies under Dutch law known as "noomloze vennootschap" and "besloten vennootschap met beperkte aansprakelijkheid";

††† k) companies under Austrian law known as "Aktiengesellschaft" and "Gesellschaft mit beschrankter Haftung";

††† l) commercial companies or civil law companies having a commercial form, cooperatives and public undertakings incorporated in accordance with Portuguese law;

††† m) companies under Finnish law known as "osakeyhtio/aktiebolag, osuuskunta/andelslag, saastopankki/sparbank" and "vakuutusyhtio/forsakrţn gsbolag";

††† n) companies under Swedish law known as "aktiebolag" and "forsakrin gsaktiebolag";

††† o) companies incorporated under the laws of the United Kingdom;

††† p) companies incorporated under the Czech legislation, known as "akciova spolecnost", "spolecnost s rucenim omezenym", "verejna obchodni spolecnnost", "komanditni spolecnost", "druzstvo";

††† q) companies incorporated under the Estonian legislation, known as "taisuhin g", "usaldusuhin g", "osauhin g", "aktsiaselts", "tulundusuhistu";

††† r) companies incorporated under the Cypriot legislation as companies incorporated in accordance with the company law, corporate public entities, as well as other entities considered companies, according to the law on income tax;

††† s) companies incorporated under the Lettish legislation, known as "akciju sabiedriba", "sabiedriba ar ierobezotu atbildibu";

††† ş) companies incorporated under the Lithuanian legislation;

††† t) companies incorporated under the Hungarian legislation, known as "kozkereseti tarsasag", "beteti tarsasag", "kozos vallalat", "korlatolt felelossegu tarsasag", "reszvenytarsasag", "egyesules", "kozhasznu tarsasag", "szovetkezet";

††† ţ) companies incorporated under the Maltese legislation, known as "Kumpaniji ta' Responsabilita'Limitata", "Socjetajiet ţn akkomandita li l-kapital taghhom maqsum f'azzjonitjiet";

††† u) companies incorporated under the Polish legislation, known as "spolka akcyjna", "spolka z ofraniczona odpowiedzialnoscia";

††† v) companies incorporated under the Slovenian legislation, known as "delniska druzba", "komanditna delniska druzba", "komanditna druzba", "druzba z omejeno odgovornostjo", "druzba z neomejeno odgovomostjo";

††† w) companies incorporated under the Slovak legislation, known as "akciova spolocnos", "spolocnost's rucenim obmedzenym", "komanditna spolocnos", "verejna obchodna spolocnos", "druzstvo".

††† x) companies incorporated under the Romanian legislation, known as: "societăţi ţn nume colectiv", "societăţi ţn comandită simplă", "societăţi pe acţiuni", "societăţi ţn comandită pe acţiuni", "societăţi cu răspundere limitată";

††† y) companies incorporated under the Bulgarian legislation, known as: "Akţionerno drujestvo"*), "Komanditno drujestvo s akţii"*), "Drujestvo s ogranicena otgovornost"*).

------------

*) The letters in the Cyrillic alphabet have been transformed into Latin letters.

ART. 124^27 - Date of application

††† The provisions of this chapter, that are a transposition of the provisions of Directive 2003/49/EC of the Council, of 3 June 2003, on a common system of taxation applicable to interest and royalty payments made between associated companies of different Member States, as subsequently amended, shall apply starting with 1 January 2011.

CHAPTER V - Exchange of information in the field of direct taxation

ART. 124^28 - General provisions

††† (1) In accordance with the provisions of this chapter the competent authorities of the Member States shall exchange any information that may enable them to effect a correct assessment of taxes on income and on capital and any information referring to the tax assessment on insurance premiums referred to in Article 3 (6) of the Directive 76/308/EEC of the Council, of 15 March 1976, on mutual assistance for the recovery of debt claims resulting from tax obligations, duties, taxes and other measures, as subsequently amended.

††† (2) There shall be regarded as taxes on income and on capital, irrespective of the manner in which they are levied, all taxes imposed on total income, on total capital, or on elements of income or of capital, including taxes on gains from the disposal of movable or immovable property, taxes on the amounts of wages or salaries paid by enterprises, as well as taxes on capital appreciation.

††† (3) The taxes referred to in paragraph 2 are at present, in particular:

††† a) in Belgium:

††† - tax on natural persons;

††† - corporation tax;

††† - tax on moral persons;

††† - tax on non-residents;

††† b) in Danmark:

††† - indkomstskat til staten;

††† - selskabsskat;

††† - den kommunale indkomstskat;

††† - den amtskommunale indkomstskat;

††† - folkepensionsbidragene;

†† †- somendsskatten;

††† - den saerlige indkomstskat;

††† - kirkeskat;

††† - formueskat til staten;

††† - bidrag til dagpengefonden;

††† c) in Germany:

††† - Einkommensteuer;

††† - Korperschaftsteuer;

††† - Vermogensteuer;

††† - Gewerbesteuer;

††† - Grundsteuer;

††† d) in Greece:

††† - phdros eisodematos fndikon prosopon;

††† - phdros eisodematos uomikou prosopon;

††† - phdros akiuetou periousias;

††† e) in Spain:

††† - tax on the incomes of natural persons;

††† - corporation tax;

††† - extraordinary tax on wealth of natural persons;

††† f) in France:

††† - income tax;

††† - corporation tax;

††† - professional tax;

††† - taxe fonciere sur les proprietes baties;

††† - taxe fonciere sur les proprietes non baties;

††† g) in Ireland:

††† - income tax;

††† - corporation tax;

††† - capital gains tax;

††† - wealth tax;

††† h) in Italy:

††† - imposta sul reddito delle persone fisiche;

††† - imposta sul reddito delle persone giuridiche;

††† - imposta locale sui redditi;

††† i) in Luxemburg:

††† - tax on the incomes of natural persons;

††† - tax on the incomes of collectivities;

††† - communal commercial tax;

††† - wealth tax;

††† - land tax;

††† j) in Netherlands:

††† - Inkomstenbelasting;

††† - Vennootschapsbelosting;

††† - Vermogensbelasting;

††† k) in Austria

††† - Einkommensteuer;

††† - Korperschaftsteuer;

††† - Grundsteuer;

††† - Bodenwertabgabe;

††† - Abgabe von land - und forstwirtschaftlichen Betrieben;

†† l) in Portugal:

††† - contribuicao predial;

††† - imposto sobre a industria agricola;

††† - contribuicao industrial;

††† - imposto de capitais;

††† - imposto profissional;

††† - imposto complementar;

††† - imposto de mais - valias;

††† - imposto sobre o rendimento do petroleo;

††† - os adicionais devidos sobre os impostos precedentes;

††† m) in Finland:

††† - Valtion tuleverot - de statlin ga inkomstskatterna;

††† - Yhteisojen tulovero - inkomstskatten for samfund;

††† - Kunnallisvero - kommunalskatten;

††† - Kirkollisvero - kyrkoskatten;

††† - Kansanelakevakuutusmaksu - folkpenşionsforsakrţn gspremien;

††† - Sairausvakuutusmaksu- sjukforsakrţn gspremien;

††† - Korkotulom lahdevero - kallskatten pa ranteţn komst;

††† - Rajoitetusti verovelvollisen lahdevero - kallskatten for begransat skattskylding;

††† - Valtion varallisuusvero - den statlinga formogenhetsskatten;

††† - Kiin teistovero - fastin ghetsskatten;

††† n) in Sweden:

††† - Den statliga inkomstskatten;

††† - Sjomansskatten;

††† - Kupongskatten;

††† - Den sarskilda inkomstskatten for utomlands bosatta;

††† - Den sarskilda inkomstskatten for utomlands bosatta artister m.fl.;

††† - Den statlinga fastighetsskatten;

††† - Den kommunala inkomstskatten;

††† - Formogenhetsskatten;

††† o) in Great Britain:

††† - income tax;

††† - corporation tax;

††† - capital gains tax;

††† - petroleum revenue tax

††† - development land tax;

††† p) in Czeck Republic:

††† - dane priijmu;

††† - dan z nemovitosti;

††† - dan dedicka, dan darovaci a dan zprevodu nemovitosti;

††† - dan z pridane hodnoty;

††† - spotrebni dane;

††† q) in Estonia:

††† - Tulumaks;

††† - Sotsiaalmaks;

††† - Maamaks;

††† r) in Cyprus:

††† - phdros eisodematos;

††† - Ektakte Eisfora;

††† - gia ten'Amuna tes Demokratias;

††† - phdros Kefalaioukon Kerdon;

††† - phdros Akinetes Idioktesias;

††† s) in Latvia:

††† - iedzivotaju ienakuma nodoklis;

††† - nekustama ipasuka nodoklis;

††† - uznemumu ienakuma nodoklis;

††† ş) in Lithuania:

††† - gyventoju pajamu mokestis;

††† - pelno mokestis;

††† - imoniu ir organizaciju nekilnojamojo turto mokestis;

††† - zemes mokestis;

††† - mokestis uz valstybinius gamtos isteklius;

††† - mokestis uz aplinkos tersima;

††† - naftos ir duju istekliu mokestis;

††† - paveldimo turto mokestis;

††† t) in Hungaria:

††† - szemelyi jovedelemando;

††† - tarsazagi ado;

††† - osztalekado;

††† - altalanos forgalmi ado;

††† - jovedeki ado;

††† - epitmenyado;

††† - telekado;

††† ţ) in Malta:

††† - Taxxa fuq l-income;

††† u) in Poland:

††† - podatek dochodowy od osob prawnych;

††† - podatek dochodowy od osob fizycznych;

††† - podatek od czynnosci cywilnopranych;

††† v) in Slovenia:

††† - dohodnina;

††† - davki obcanov;

††† - davek od dobicka pravnih oseb;

††† - posebni davek na bilacno vsoto bank in hranilnic;

††† w) in Slovakia:

††† - dan z prijmov fyzickych osob;

††† - dan z prijmov pravnickych osob;

††† - dan z dedicstva;

††† - dan z darovania;

††† - dan z prevodu a prechodu nehnutel'nosti;

††† - dan z nehnutel'nosti;

††† - dan z predanej hodnoty;

††† - spotrebne dane.

††† (4) The provisions of paragraph (1) shall also apply to any identical or similar taxes imposed subsequently, whether in addition to or in place of the taxes listed in paragraph (3). The competent authorities of the Member States shall inform one another of the date of entry into force of such taxes.

††† (5) The expression "competent authority" means:

††† a) in Belgium:

††† - minister of finance or an authorised representative;

††† b) in Danmark:

††† - minister of finance or an authorised representative;

††† c) in Germany:

††† - federal minister of finance or an authorised representative;

††† d) in Greece:

††† - To Upourgeio Oikonomikon or an authorised representative;

††† e) in Spain:

††† - minister of economy and finance or an authorised representative;

††† f) in France:

††† - minister of economy or an authorised representative;

††† g) in Ireland:

††† - The Revenue Commissioners or their authorised representative;

††† h) in Italy:

††† - head of tax policy department or an authorised representative;

††† i) in Luxemburg:

††† - minister of finance or an authorised representative;

††† j) in Netherlands:

††† - minister of finance or an authorised representative;

†† †k) in Austria

††† - federal minister of finance or an authorised representative;

††† l) in Portugal:

††† - minister of finance or an authorised representative;

††† m) in Finland:

††† - minister of finance or an authorised representative;

††† n) in Sweden:

††† - head of finance department or an authorised representative;

††† o) in Great Britain:

††† - the commissioners in the customs and excise duties or an authorised representative for the information requested, referring to taxes on insurance premiums and excise duties;

††† - The Commissioners of Inland Revenue or their authorised representatives;

††† p) in Czeck Republic:

††† - minister of finance or an authorised representative;

††† q) in Estonia:

††† - minister of finance or an authorised representative;

††† r) in Cyprus:

††† - Upourgeio Oikonomikon or an authorised representative;

††† s) in Latvia:

††† - minister of finance or an authorised representative;

††† ş) in Lithuania:

††† - minister of finance or an authorised representative;

††† t) in Hungaria:

††† - minister of finance or an authorised representative;

††† ţ) in Malta:

††† - minister in charge with the tax department or an authorised representative;

††† u) in Poland:

††† - minister of finance or an authorised representative;

††† v) in Slovenia:

††† - minister of finance or an authorised representative;

††† w) in Slovakia:

††† - minister of finance or an authorised representative;

††† x) in Romania:

††† - minister of public finance or an authorised representative.

††† ART. 124^29

††† Exchange on request

††† (1) The competent authority of a Member State may request the competent authority of another Member State to forward the information referred to in Article 124^28 (1) in a particular case. The competent authority of the requested State need not comply with the request of exchange of information if it appears that the competent authority of the State making the request has not exhausted its own usual sources of information, which it could have utilised, according to the circumstances, to obtain the information requested without running the risk of endangering the attainment of the sought after result.

††† (2) For the purpose of forwarding the information referred to in Article 124^28 (1), the competent authority of the requested Member State shall arrange for the conduct of any enquiries necessary to obtain such information.

††† (3) For the purpose of obtaining the information requested, the competent authority from which the information is requested or the administrative authority resorted to shall proceed as if it would act on its own or, at the request from the other authority, on behalf of its own Member State.

ART. 124^30 - Automatic exchange of information

††† For categories of cases which they shall determine under the consultation procedure laid down in Article 124^38, the competent authorities of the Member States shall regularly exchange the information referred to in Article 124^28 (1) without prior request.

ART. 124^31 - Spontaneous exchange of information

††† (1) The competent authority of a Member State shall without prior request forward the information referred to in Article 124^28 (1), of which it has knowledge, to the competent authority of any other Member State concerned, in the following circumstances:

††† a) the competent authority of the one Member State has grounds for supposing that there may be a loss of tax in the other Member State;

††† b) a person liable to tax obtains a reduction in or an exemption from tax in the one Member State which would give rise to an increase in tax or to liability to tax in the other Member State;

††† c) business dealings between a person liable to tax in a Member State and a person liable to tax in another Member State are conducted through one or more countries in such a way that a saving in tax may result in one or the other Member State or in both;

††† d) the competent authority of a Member State has grounds for supposing that a saving of tax may result from artificial transfers of profits within groups of enterprises;

††† e) information forwarded to the one Member State by the competent authority of the other Member State has enabled information to be obtained which may be relevant in assessing liability to tax in the latter State.

††† (2) The competent authorities of the Member States may, under the consultation procedure laid down in Article 124^38, extend the exchange of information provided for in paragraph (1) to cases other than those specified therein.

††† (3) The competent authorities of the Member States may forward to each other in any other case, without prior request, the information referred to in Article 124^28 (1) of which they have knowledge.

ART. 124^32 - Time limit for forwarding information

††† The competent authority of a Member State which, under the provisions of the present chapter, is called upon to furnish information, shall forward it as swiftly as possible. If it encounters obstacles in furnishing the information or if it refuses to furnish the information, it shall forthwith inform the requesting authority to this effect, indicating the nature of the obstacles or the reasons for its refusal.

ART. 124^33 - Collaboration by officials of the State concerned

††† For the purpose of applying the preceding provisions, the competent authority of the Member State providing the information and the competent authority of the Member State for which the information is intended may agree, under the consultation procedure laid down in Article 124^38, to authorise the presence in the first Member State of officials of the tax administration of the other Member State. The details for applying this provision shall be determined under the same procedure.

ART. 124^34 - Provisions relating to secrecy

††† (1) All information made known to a Member State under this chapter shall be kept secret in that State in the same manner as information received under its domestic legislation. In any case, such information:

††† a) may be made available only to the persons directly involved in the assessment of the tax or in the administrative control of this assessment,

††† b) may in addition be made known only in connection with judicial proceedings or administrative proceedings involving sanctions undertaken with a view to, or relating to, the making or reviewing the tax assessment and only to persons who are directly involved in such proceedings; such information may, however, be disclosed during public hearings or in judgments if the competent authority of the Member State supplying the information raises no objection;

††† c) shall in no circumstances be used other than for taxation purposes or in connection with judicial proceedings or administrative proceedings involving sanctions undertaken with a view to, or in relation to, the making or reviewing the tax assessment.

††† Moreover, the information may be used to establish other tax obligations, duties and taxes as provided in Article 2 of the Directive 76/308/EEC of the Council.

† ††(2) The provisions of paragraph (1) shall not oblige a Member State whose legislation or administrative practice lays down, for domestic purposes, narrower limits than those contained in the provisions of that paragraph, to provide information if the State concerned does not undertake to respect those narrower limits.

††† (3) Notwithstanding the provisions of paragraph (1), the competent authorities of the Member State providing the information may permit it to be used for other purposes in the requesting State, if, under the legislation of the informing State, the information could, in similar circumstances, be used in the informing State for similar purposes.

††† (4) Where a competent authority of a Member State considers that information which it has received from the competent authority of another Member State is likely to be useful to the competent authority of a third Member State, it may transmit it to the latter competent authority with the agreement of the competent authority which supplied the information.

ART. 124^35 - Limits to exchange of information

††† (1) This chapter shall impose no obligation to have enquiries carried out or to provide information if the Member State, which should furnish the information, would be prevented by its laws or administrative practices from carrying out these enquiries or from collecting or using this information for its own purposes.

††† (2) The provision of information may be refused where it would lead to the disclosure of a commercial, industrial or professional secret or of a commercial process, or of information whose disclosure would be contrary to public policy.

††† (3) The competent authority of a Member State may refuse to provide information where the State concerned is unable, for practical or legal reasons, to provide similar information.

ART. 124^36 - Notification

††† (1) At the request of the competent authority of a Member State, the competent authority of the other Member State shall notify, in accordance with the legal provisions governing the notification of similar instruments in the requested Member State, the receiver of all instruments and decisions issued by the administrative authorities of the requesting Member State and which concern the application within its territory of the legislation regarding the taxes covered by this chapter.

††† (2) The request for notification shall indicate the subject of instrument or decision to be notified and shall mention the name and address of the receiver, along with any other information whereby the receiver's identification is enabled.

††† (3) The requested authority shall inform at once the requesting authority on the answer it gave at the request for notification and, in particular, it shall communicate the date of notification of the decision or of the instrument to the receiver.

ART. 124^37 - Simultaneous checks

††† (1) When the fiscal standing of one or more persons subject to taxation is in the common or complementary interest of two or more Member States, these may agree upon simultaneous checks conducted within their territories, so as they may exchange the information thus obtained whenever such exchange of information is regarded as more effective than conducting checks only by one of the Member States.

††† (2) The competent authority of each Member State shall arbitrarily identify the persons subject to taxation which it intends to propose for a simultaneous check. This competent authority shall communicate to the competent authorities in charge from the other Member States concerned the cases that, in its opinion, would be subject to a simultaneous check. This competent authority shall make public the reasons that influenced its choice of cases, as soon as possible, by communicating the information that lead to making a decision in favour of a simultaneous check. The competent authority shall specify the time interval during which the control operations shall be conducted.

††† (3) The competent authority in each Member State concerned shall decide whether it desires to participate in simultaneous check operations or not. Upon receipt of a proposal for a simultaneous check, the competent authority shall confirm its consent or communicate its refusal, by providing reasons, to the other authorities.

††† (4) Each competent authority from the Member States concerned shall appoint a representative charged with the supervision and co-ordination of the control activity.

ART. 124^38 - Consultations

††† (1) For the purposes of the implementation of this chapter, consultations shall be held, if necessary in a Committee, between:

††† a) the competent authorities of the Member States concerned at the request of either, in respect of bilateral questions;

††† b) the competent authorities of all the Member States and the Commission, at the request of one of those authorities or the Commission, in so far as the matters involved are not solely of bilateral interest.

††† (2) The competent authorities of the Member States may communicate directly with each other. The competent authorities of the Member States may by mutual agreement permit authorities designated by them to communicate directly with each other in specified cases or in certain categories of cases.

††† (3) Where the competent authorities make arrangements on bilateral matters covered by this article other than as regards individual cases, they shall as soon as possible inform the Commission thereof. The Commission shall in turn notify the competent authorities of the other Member States.

ART. 124^39 - Pooling of experience

††† The Member States shall, together with the Commission, constantly monitor the cooperation procedure provided for in this chapter and shall pool their experience, especially in the field of transfer pricing within groups of enterprises, with a view to improving such cooperation and, where appropriate, drawing up a body of rules in the fields concerned.

ART. 124^40 - Applicability of wider-ranging provisions of assistance

††† The foregoing provisions shall not impede the fulfilment of any wider obligations to exchange information which might flow from other legal acts.

ART. 124^41 - Application date

††† The provisions of this chapter, that are a transposition of the provisions of Directive 77/79/EEC concerning mutual assistance by the competent authorities of the Member States in the field of direct taxation and of taxation of insurance premiums, as subsequently amended, shall apply starting with the date of accession of Romania to the European Union.



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