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The fiscal residency of natural persons in Romania – new liabilities

The fiscal residency of natural persons in Romania – new liabilities

The Minister of Finances, by the Order no.74 issued on the 23rd of January, 2012 regulating certain aspects concerning fiscal residency of the natural persons, published in the Official Gazette no.73/2012 (hereinafter the “Order”), made further steps in the implementation of the Romanian Fiscal Code in respect of the natural persons’ fiscal residency.

The Order approves the forms for fiscal residence, establishes liabilities and terms for registration of such forms with the fiscal body and nevertheless, establishes the fiscal residency criteria.

Natural persons – form to be submitted – terms

The natural persons subject to these new rules are the natural persons, either fiscal residents inRomaniaor non-residents, who arrive in or depart fromRomaniafor a period or periods that exceed in total 183 days during a 12 consecutive months period, ending in the calendar year in question. These natural persons have the legal obligation that within 30 days from the date of arriving in Romania or with 30 days before departing from Romania, as the case may be, to complete “The questionnaire for determining the natural person’s fiscal residency on arrival/departure in/from Romania”. The mentioned form shall be submitted to the fiscal body in whose territorial incidence the natural persons have their domicile, either in person or by legal.

The new provisions expressly establish the liability to submit the same fiscal residency form for the following categories of natural persons as well: (i) the non-resident natural persons whose fiscal residence was established in Romania, at the time of departure from Romania; (ii) the natural persons arrived in Romania after the 1st of January, 2009 and continuing their residency after the 1st of January, 2012; (iii) the non-resident natural persons arrived in Romania before the 1st of January, 2009 and who request a fiscal residency certificate from the Romanian authorities.

Residency criteria

As indicated in the Order, the criteria for determining the fiscal residency are in accordance with the OECD Model Tax Convention. Thus: (i) the criteria regarding the domicile, the center of the vital interest, the habitual abode in one of the states and the nationality are through the elements to be analyzed whenever a natural person is a resident in Romania and at the same time, in a state signatory of a tax convention with Romania; (ii) in case a natural person does not prove her residence in a state with which Romania has concluded a tax convention, than the criteria of 183 days period/periods presence in Romania and the criteria of the center of interest placed in Romania shall apply.

In addition to, but only together with the above mentioned criteria, some other criteria could be analyzed as well, as indicated in the standard forms: the reasons of arrival /departure in/from Romania, employment in Romania/abroad, the family relationship, holding of a transport vehicle registered in Romania/abroad, of a passport or a driving license, insurance in the health and/or pensions system in Romania/abroad.

Other provisions

In case the residency status inRomaniais modified, the resident and non-resident natural persons maintain their fiscal duties up to the end of the calendar year.The Romanian residents who depart from Romania to a state with which Romania has not concluded conventions for avoidance of double taxation shall continue to pay taxes on their worldwide revenues in Romania during the following 3 calendar years.

The following documents shall be annexed to the form regarding the determining of the fiscal residency: (1) Copy of the passport or of the identity document, for the EU citizens; (2) The fiscal residency certificate issued by the foreign authorities, if the case; (3) The proof of a living space inRomania.

Mariana Anghel

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