Tax Convention Signed Between Canada and Romania

April 16, 2004


A new Convention between Canada and Romania for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and on capital was signed on April 8, 2004 in Ottawa.

The Convention limits the rate of withholding tax to 10% for dividends between affiliated companies, 15% for dividends in all other cases, and 10% for interest. The Convention limits the rate of withholding tax to 5% in respect of certain copyright royalties and for certain payments made for the use of any patent, computer software, and for information concerning industrial, commercial or scientific experience, and 10% for royalties in all other cases.

The Convention will enter into force thirty days after Canada and Romania have notified each other that all the necessary measures to give the Convention the force of law in their respective countries have been completed. In the case of Canada, the Convention will have effect, in respect of tax withheld at source on amounts paid or credited to non-residents, on or after the first day of January in the calendar year next following that in which the Convention enters into force; and, in respect of other Canadian taxes, for taxation years beginning on or after the first day of January in the calendar year next following that in which the Convention enters into force. In the case of Romania, the Convention will have effect, in respect of taxes withheld at source, on or after the first day of January in the calendar year next following that in which the Convention enters into force; and, in respect of other taxes, on or after the first day of January in the calendar year next following that in which the Convention enters into force.

The existing Convention between Canada and Romania, signed at Ottawa on the 20th of November 1978, shall cease to have effect from the dates on which the new Convention becomes effective.

For further information contact:

Parry Athenaios
Tax Legislation Division
Phone: (613) 992-5864