Belgium resident + Micro SRL in Romania

JustAnotherNomad said:

You will most likely be required by law to tell the Belgian tax authorities that you have formed a company in Romania. Then they will start asking questions and the end of it will probably be that you will be paying the same amount of taxes you would have paid in the first place + additional fees for the structure, accounting etc. Doesn’t make sense at all. Unless maybe if you have many Romanian customers who prefer dealing with a local company or some stuff like that.

If you don’t tell the Belgian authorities and they find out later, you will probably be charged with tax evasion and pay all taxes + a hefty fine, or even go to jail.
If you are willing to risk going to jail, then I don’t see the point in choosing an EU country for your illegal operation. Then you might as well go for a country that at least doesn’t exchange information, has no taxes at all etc.

I find it really amazing how many people believe they can just legally register a company in some other country and not pay taxes where they live and work. How stupid do you think the authorities are? If it was that easy, nobody would be paying any taxes in high-tax countries. Just think about it for one minute. Do you really think you are the first person who came up with that idea? That the reason nobody does it is because they all aren’t as smart as you?

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• management and control
• economic substance
• cfc rules
• beps
• aeoi

1. as we all don't know the tax treaty Belgium/Romania, analyze it deeply instead of speculating. This is the base for your business and nothing else
2. "usually" you have to create REAL structure (=office, phone, DSL, bank account, etc.. contracts) and at least officially move to Romania with all consequences (=rent real flat, etc.). You have to guard all invoices proving your REAL structure, movement and existence in Romania with at least 183 days/year there.
3. All trials to escape from this can mean that you will loose much more than you expect (including fines, etc.)
4. A Romanian SRL with at least 1 employee (can be you) is taxed with 1% of turnover (if <1 Mio. EUR), which is European benchmark.
5. Divdends are taxed with 5%. This means totally 6% effectice tax, which is almost European benchmark. After costs, I would say it's European benchmark.
6. The decision to move to Romania is a strategical one and not only taxes should be considered

whocares61 said:

Thanks!

1. I will check try to google it deeper. I was talking to who i thought specialists and that was based from what they told me. I am not saying that they are right or wrong, but based on this was my initial assumption.
2. If that's the case with Belgium/Romania then it will not work now indeed.
4. Can you please explain the term "European Benchmark"? Google gives me something irrelevant, I think

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6. Since the place of business must be fixed, it also follows that a permanent establishment can be deemed to exist only if the place of business has a certain degree of permanency, i.e. if it is not of a purely temporary nature. A place of business may, however, constitute a permanent establishment even though it exists, in practice, only for a very short period of time because the nature of the business is such that it will only be carried on for that short period of time. It is sometimes difficult to determine whether this is the case. Whilst the practices followed by member countries have not been consistent in so far as time requirements are concerned, experience has shown that permanent establishments normally have not been considered to exist in situations where a business had been carried on in a country through a place of business that was maintained for less than six months (conversely, practice shows that there were many cases where a permanent establishment has been considered to exist where the place of business was maintained for a period longer than six months). One exception has been where the activities were of a recurrent nature; in such cases, each period of time during which the place is used needs to be considered in combination with the number of times during which that place is used (which may extend over a number of years). Another exception has been made where activities constituted a business that was carried on exclusively in that country; in this situation, the business may have short duration because of its nature but since it is wholly carried on in that country, its connection with that country is stronger. For ease of administration, countries may want to consider these practices when they address disagreements as to whether a particular place of business that exists only for a short period of time constitutes a permanent establishment.

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1. Subject to the provisions of Articles 16, 18 and 19, salaries, wages and other similar remuneration derived by a resident of a Contracting State in respect of an employment shall be taxable only in that State unless the employment is exercised in the other Contracting State. If the employment is so exercised, such remuneration as is derived therefrom may be taxed in that other State.

2. Notwithstanding the provisions of paragraph 1, remuneration derived by a resident of a Contracting State in respect of an employment exercised in the other Contracting State shall be taxable only in the first-mentioned State if:
a) the recipient is present in the other State for a period or periods not exceeding in the aggregate 183 days in any twelve month period commencing or ending in the fiscal year concerned, and
b) the remuneration is paid by, or on behalf of, an employer who is not a resident of the other State, and
c) the remuneration is not borne by a permanent establishment which the employer has in the other State.

3. Notwithstanding the preceding provisions of this Article, remuneration derived in respect of an employment exercised aboard a ship or aircraft operated in international traffic, or aboard a boat engaged in inland waterways transport, may be taxed in the Contracting State in which the place of effective management of the enterprise is situated.

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