🇷🇴 Tax Treaty
Cyprus–Romania Double Tax Treaty
The Cyprus-Romania DTA provides a 5% withholding rate on royalties — one of the most useful provisions for Cyprus companies licensing IP into Romanian operations.
Withholding Tax Rates at a Glance
10%
Dividends
(reduced rate)
(reduced rate)
10%
Interest
5%
Royalties
0%
Capital Gains
(Cyprus side)
(Cyprus side)
Full Withholding Tax Rates
| Payment Type | Treaty Rate | Conditions |
|---|---|---|
| Dividends (standard) | 10% | Standard WHT rate |
| Dividends (reduced) | 10% | |
| Interest | 10% | On interest payments between the countries |
| Royalties | 5% | On royalties, licences, and IP income |
| Capital Gains (Cyprus side) | 0% | 0% in Cyprus on disposal of shares |
Treaty signed: 1981. In force: 1982. Rates are treaty maxima — domestic law or EU directives may reduce them further.
Key Treaty Benefits
- ✓ 5% WHT on royalties (vs Romanian domestic 16%)
- ✓ 10% WHT on dividends
- ✓ 10% WHT on interest
Common Cyprus–Romania Structures
- → Cyprus IP company licensing to Romanian software companies
- → Cyprus holding company for Romanian investment
Planning Notes
Romania is an important emerging market. The 5% royalty rate and 10% dividend rate are competitive versus Romanian domestic rates. Romania has become more aggressive on anti-avoidance in recent years.
Dual Residency Tiebreaker
Place of effective management
Planning a Cyprus–Romania structure?
Treaty rates are only part of the picture. We help you design and implement Cyprus company structures that take full advantage of the Cyprus–Romania double tax treaty — with genuine substance and robust documentation.