Ratification of the Multilateral Convention (MLI): Law no. 5/2022
14 Jan 2022
The takeaway
The Multilateral Convention on the Implementation of BEPS Measures to Avoid Double Taxation in Treaties has been ratified. Numerous amendments have been made to the Multilateral Convention which affect a wide range of double taxation treaty provisions.
In detail
Law no. 5/2022 ratifies the Multilateral Convention (MLI) on the implementation in double taxation avoidance treaties of measures related to the prevention of tax base erosion and the transfer of profits (BEPS). It includes Romania’s options, reservations and notifications regarding the application of the MLI.
The MLI enters into force on the first day of the month following that in which a period of three calendar months expires as of the date on which the instrument of ratification (i.e. this law) is deposited with the Secretariat of the Organisation for Economic Co-operation and Development (OECD).
For each double taxation treaty concluded by Romania and the states for which the MLI has entered into force, the provisions of the MLI apply as of:
1 January of the following year for provisions relating to withholding tax on income obtained by non-residents;
1 January of the year following the expiry of a period of six calendar months as of the most recent date of entry into force of the MLI for the respective signatory states for provisions relating to other taxes (only for Romania).
We will provide further updates once the instrument of ratification has been deposited with the OECD.
Please contact us for a more detailed discussion of the impact that these provisions may have in your specific case.
Source: [Law no. 5/2022 ratifying the Multilateral Convention for the implementation in the fiscal treaties of measures related to the prevention of the erosion of the tax base and the transfer of profits, opened for signature and signed by Romania in Paris on 7 June 2017, published in the Official Gazette no. 28 dated 10 January 2022]
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