After EU accession, the corporate income tax regime in Romania will be subject to changes –existing advantageous features may be phased out while new rules may be introduced, creating new opportunities. In the changing EU environment, awareness of the changes is key and is the first step to being able to benefit from these opportunities. |
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EU Merger Directive |
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| This directive facilitates tax-free (cross-border) reorganisations (such as mergers, spin-offs, contributions and share-for-share exchanges), provided there are sufficient business reasons for the reorganisation and the aim of the reorganisation is not to reduce or evade tax liabilities. |
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EU Parent/Subsidiary Directive |
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| This directive exempts dividends paid within the EU from withholding tax subject to a 2 years holding period. Consideration should be given to planning the holding structure in view of efficient dividends distribution after 2007. |
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EU Royalty&Interest Directive |
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| The directive exempts interest and royalty payments between associated companies within the EU from withholding fax. Financing/licensing strategies should be reviewed from this perspective. |
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EC Treaty |
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| Key elements of the EC treaty are freedom of establishment and freedom of movement of capital. The EU has implemented rules that prohibit state aid and harmful competition. As a result, the new member states must abolish or change those tax regimes or features of tax regimes that qualify as illegal state aid or harmful competition. New incentives that are not in accordance with these rules cannot be introduced. |
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| How can we help you? |
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| There are a number of opportunities to improve and streamline your business operations.In response to the need to prepare companies operating in Romania for changes relating to integration with the EU, our Corporate Tax group offers you comprehensive advisory services including: |
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Advice on transitional measures and new local laws affecting your company's business operations
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Analysis of opportunities for corporate entity simplification and restructuring
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Analysis and implementation of tax efficient holding structure, licensing and financing strategies
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Intra-community mergers and acquisitions |
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Develop procedures for on-going compliance |
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Interpretation of EU rules relating to operations within enlarged EU. |
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| For further information please contact one of our experts in the enclosed listing or your usual PricewaterhouseCoopers representative. |
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