The Assistant Treasurer, Senator Rod Kemp, today announced that the Australia-Romania Double Taxation Agreement entered into force on 11 April 2001. This followed an exchange of notes through the diplomatic channel indicating that the necessary procedures to give the agreement the force of law had been completed in each country.
The new tax agreement will encourage Australian companies to expand their commercial relationships with Romania, Australias largest export market in the Central European region.
Signature of the agreement took place in Canberra on 2 February 2000. Details of the agreement were made public at that time and legislation providing for the agreement to be given the force of law in Australia - the International Tax Agreements Amendment Act (No.1) 2000 - received the Royal Assent on 6 July 2000.
This is a comprehensive agreement for the avoidance of double taxation in relation to all income flowing between Australia and Romania. The allocation of taxing rights between the countries under the agreement generally accords with those provided for in Australia's other modern comprehensive taxation agreements.
The agreement will have effect in Australia for withholding tax purposes in relation to income derived by a resident of Romania on or after 1 January 2002. In respect of other tax, the agreement will have effect in Australia in relation to income, profits, or gains of any year of income beginning on or after 1 July 2002.
The agreement will have effect in Romania in respect of taxes on income, profits and gains for the taxable period starting from 1 January 2002.
The agreement limits the withholding tax or other tax that the source country may apply on certain dividends, interest or royalties payable to residents of the other country. Details of the practical application of those tax rate limits in relation to Australian withholding tax or income tax imposed on an assessment basis are available at offices of the Australian Taxation Office.
Formal notification of the entry into force of the agreement was published in the Gazette on 11th July 2001.
MELBOURNE
20 July 2001
Contacts: Richard Wise Assistant Treasurers Office (02) 6277 7360
Ariane Pickering Australian Taxation Office (02) 6216 2611