Romania - Is a "Gross-Up Clause" a Treaty Override?
- M. Cotrut
- European Taxation, 2013 (Volume 53), No 9/Special Issue
- 9 August 2013
This article examines, from a Romanian perspective, whether a balance can be found between protecting a country’s right to tax its fair share of income generated in that country and the objective of eliminating double taxation. In determining this balance, special attention is given to the application of gross-up clauses, which allow Romania, as the source state, to tax non-resident investors in the form of a domestic withholding tax without considering the withholding taxes provided by tax treaties, a situation that may be characterized as treaty override.