The European Commission issued a letter of formal notice to Romania demanding information on norms by which outbound dividends paid to companies may be taxed more heavily than domestic dividends. The EC announced on Tuesday it has sent requests on the issue to both Romania and Bulgaria, asking them to reply within two months.

According to the EC, "the letter of formal notice to Romania concerns the taxation of dividends which are paid to companies, resident elsewhere in the EU or in the EEA/EFTA countries". The Commission shows that domestic dividends on participations of up to 15% of the shares are subject to a final withholding tax of 10%. "On similar outbound dividends, Romania levies a withholding tax of 16%. Bilateral tax treaties may reduce the rate", the EC says.

Its announcement also shows that "domestic dividends on participations of 15% or more are tax exempt. In contrast, Romania levies a final withholding tax of 10% on dividends paid to companies resident in Norway and of 16% on similar outbound dividends paid to companies resident in the other EEA/EFTA countries".