Recommendation for a Council Decision concerning the accession of Bulgaria and Romania to the Convention of 23 July 1990 on the elimination of double taxation in connection with the adjustment of profits of associated enterprises
Date: 2007-12-20
Institutions: European Commission
Subjects: Bulgaria, Romania, accession to the European Union, corporation tax, double taxation, tax exemption, tax on profits of self-employment

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 20.12.2007 
COM(2007) 839 final 

2007/0283 (CNS) 

Recommendation for a 

COUNCIL DECISION 

concerning the accession of Bulgaria and Romania to the Convention of 23 July 1990 on 
the elimination of double taxation in connection with the adjustment of profits of 
associated enterprises 

Proposal for a 

COUNCIL DECISION 

amending Annex I to the Act of Accession of Bulgaria and Romania 

(presented by the Commission) 

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EXPLANATORY MEMORANDUM 

The 2005 Act of accession of Bulgaria and Romania1 has introduced a simplified system for 
the accession of Bulgaria and Romania to the conventions (and protocols) concluded by the 
Member States on the basis of Art. 34 TEU (previously Art. K.3 TEU) or Art. 293 EC. It is 
indeed  not  anymore  necessary,  as  in  the  past,  to  negotiate  and  conclude  specific  accession 
protocols to these conventions (which would have implied ratification by 27 States): Article 
3(3) of the Act provides simply that Bulgaria and Romania accede to these conventions and 
protocols by virtue of the Act of Accession. 

Article  3(3)  and  3(4)  of  the  Act  of  Accession  provide  that,  to  that  effect,  the  Council  shall 
adopt  a  decision  in  order  to  determine  the  date  on  which  these  conventions  shall  enter  into 
force  for  Bulgaria  and  Romania  and  to  make  all  the  necessary  adjustments  to  these 
conventions required by reason of the accession of the two new Member States (which would 
include,  in  any  event,  the  adoption  of  the  conventions  in  the  Bulgarian  and  Romanian 
languages,  so  that  these  versions  can  be  "equally  authentic").  The  Council  shall  act  on  a 
recommendation of the Commission, after consulting the European Parliament. 

Annex I to the Act of Accession gives the list of the conventions and protocols concerned. 

The  list  includes  the  Convention  90/436/EEC  of  23  July  1990  on  the  elimination  of  double 
taxation in connection with the adjustment of profits of associated enterprises (the so-called 
Arbitration Convention), the Convention of 21st December 1995 on the accession of Austria, 
Finland  and  Sweden  to  the  Arbitration  Convention  and  the  Protocol  of  25  May  1999 
amending the Arbitration Convention. 

In  the  period  preceding  the  accession  of  Bulgaria  and  Romania  to  the  European  Union,  the 
Member States have signed on 8 December 2004 a Convention on the accession of the Czech 
Republic, Estonia, Cyprus, Latvia, Lithuania, Hungary, Malta, Poland, Slovenia and Slovakia, 
to the Arbitration Convention. 

Therefore  it  is  appropriate  to  provide  for  the  accession  of  Bulgaria  and  Romania  to  the 
Arbitration  Convention  as  amended  by  the  Convention  of  8  December  2004  and  that 
Convention should be added to Annex I of the Act of Accession. To that effect, and in line 
with  Article  3(6)  of  the  Act  of  Accession  the  Commission  has  prepared  a  proposal  for  a 
Council Decision to add to the list the Convention of 8 December 2004 on the accession of 
the ten new Member states to Convention 90/436/EEC. 

The  Commission  Recommendation  for  a  Council  Decision  is  intended  to  make  the 
adjustments  required  by  reason  of  the  accession  of  Bulgaria  and  Romania  to  the 
aforementioned Convention, in accordance with Article 3(4) of the Act of Accession. 

1 

OJ 21.6.2005, L 157, p. 203. 

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2007/0283 (CNS) 

Recommendation for a 

COUNCIL DECISION 

concerning the accession of Bulgaria and Romania to the Convention of 23 July 1990 on 
the elimination of double taxation in connection with the adjustment of profits of 
associated enterprises 

THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty on European Union,  

Having regard to the Treaty establishing the European Community, 

Having regard to the Act of Accession of Bulgaria and Romania, and in particular Article 3(4) 
thereof, 

Having regard to the recommendation from the Commission2, 

Having regard to the opinion of the European Parliament3, 

Whereas: 

(1) 

(2) 

(3) 

(4) 

Convention  90/436/EEC  of  23  July  1990,  on  the  elimination  of  double  taxation  in 
connection  with  the  adjustment  of  profits  of  associated  enterprises4  (hereinafter 
referred  to  as  "the  Arbitration  Convention")  was  signed  at  Brussels  on  23  July  1990 
and entered into force on 1 January 1995. 

The  Arbitration  Convention  was  amended  by  a  Protocol5,  signed  on  25  May  1999, 
which entered into force on 1 November 2004. 

Austria, Finland and Sweden acceded to the Arbitration Convention by a Convention6 
signed on 21 December 1995. 

The  Czech  Republic,  Estonia,  Cyprus,  Latvia,  Lithuania,  Hungary,  Malta,  Poland, 
Slovenia and Slovakia, acceded to the Arbitration Convention by a Convention7 signed 
on 8 December 2004.  

2 
3 
4 
5 
6 
7 

OJ C , , p. . 
OJ C , , p. . 
OJ L 225, 20. 8.1990, p.10. 
OJ C 202, 16.7.1999, p. 1.  
OJ C 26, 31.1.1996, p. 1. 
OJ C 160, 30.6.2005, p. 1. 

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(5) 

Article  3(3)  of  the  Act  of  Accession  of  2005  provides  that  Bulgaria  and  Romania 
accede to the conventions and protocols concluded between the Member States listed 
in Annex I to the Act of Accession, including the Arbitration Convention. They are to 
enter  into  force  in  relation  to  Bulgaria  and  Romania  on  the  date  determined  by  the 
Council. 

(6) 

In accordance with Article 3(4) of the Act of Accession of 2005 the Council is to make 
all adjustments required by reason of accession to those conventions and protocols, 

HAS DECIDED AS FOLLOWS:  

Article 1 

The Arbitration Convention is amended as follows: 

(1) 

In Article 2(2), points (a) to (y) are replaced by the following: 

(i) 

in Belgium: 

(a) 

impôt des personnes physiques/personenbelasting 

(b) 

impôt des sociétés/vennootschapsbelasting 

(c) 

impôt des personnes morales/rechtspersonenbelasting 

(d) 

impôt des non-résidents/belasting der niet-verblijfhouders 

(e) 

taxe  communale  et  la  taxe  d'agglomération  additionnelles  à  l'impôt  des 
personnes 
en 
agglomeratiebelasting op de personenbelasting 

physiques/aanvullende 

gemeentebelasting 

(ii) 

in Bulgaria: 

(a)  данък върху доходите на физическите лица 

(b)  корпоративен данък 

(iii) 

in the Czech Republic: 

(a) 

daň z příjmů fyzických osob 

(b)  daň z příjmů právnických osob 

(iv) 

in Denmark:  

(a) 

indkomstskat til staten 

(b)  den kommunale indkomstskat 

(c) 

den amtskommunale indkomstskat 

(v) 

in Germany: 

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(a)  Einkommensteuer 

(b)  Koerperschaftsteuer 

(c)  Gewerbesteuer, in so far as this tax is based on trading profits 

(vi) 

in Estonia: 

(a) 

tulumaks 

(vii)  in Greece: 

(a) 

foros eisodimatos fysikon prosopon 

(b) 

foros eisodimatos nomikon prosopon 

(c) 

eisfora yper ton epicheiriseon ydrefsis kai apochetefsis 

(viii)  in Spain: 

(a) 

Impuesto sobre la Renta de las Personas Físicas 

(b) 

Impuesto sobre Sociedades 

(c) 

Impuesto sobre la Renta de no Residentes 

(ix) 

in France: 

(a) 

impôt sur le revenu 

(b) 

impôt sur les sociétés 

(x) 

in Ireland: 

(a) 

Income Tax 

(b)  Corporation Tax 

(xi) 

in Italy: 

(a) 

imposta sul reddito delle persone fisiche 

(b) 

imposta sul reddito delle società 

(c) 

imposta regionale sulle attività produttive 

(xii)  in Cyprus: 

(a)  Φόρος Εισοδήματος 

(b)  Έκτακτη Εισφορά για την Άμυνα της Δημοκρατίας 

(xiii)  in Latvia: 

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(a) 

uzņēmumu ienākuma nodoklis 

(b) 

iedzīvotāju ienākuma nodoklis 

(xiv)  in Lithuania: 

(a)  Gyventojų pajamų mokestis 

(b)  Pelno mokestis 

(xv)  in Luxembourg: 

(a) 

impôt sur le revenu des personnes physiques 

(b) 

impôt sur le revenu des collectivités 

(c) 

impôt commercial, in so far as this tax is based on trading profits 

(xvi)  in Hungary: 

(a) 

személyi jövedelemadó 

(b) 

társasági adó 

(c) 

osztalékadó 

(xvii) in Malta: 

(a) 

taxxa fuq l-income 

(xviii) in the Netherlands: 

(a) 

inkomstenbelasting 

(b)  vennootschapsbelasting 

(xix)  in Austria: 

(a)  Einkommensteuer 

(b)  Körperschaftsteuer 

(xx)  in Poland: 

(a) 

podatek dochodowy od osób fizycznych 

(b)  podatek dochodowy od osób prawnych 

(xxi)  in Portugal: 

(a) 

imposto sobre o rendimento das pessoas singulares 

(b) 

imposto sobre o rendimento das pessoas colectivas 

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(c) 

derrama  para  os  municípios  sobre  o  imposto  sobre  o  rendimento  das 
pessoas colectivas 

(xxii) in Romania: 

(a) 

impozitul pe venit 

(b) 

impozitul pe profit 

(c) 

impozitul pe veniturile obţinute din România de nerezidenţi 

(xxiii) in Slovenia: 

(a) 

dohodnina 

(b)  davek od dobička pravnih oseb 

(xxiv) in Slovakia:  

(a) 

daň z príjmov právnických osôb 

(b)  daň z príjmov fyzických osôb 

(xxv) in Finland: 

(a) 

valtion tuloverot/de statliga inkomstskatterna 

(b)  yhteisöjen tulovero/inkomstskatten för samfund 

(c) 

kunnallisvero/kommunalskatten 

(d)  kirkollisvero/kyrkoskatten 

(e) 

korkotulon lähdevero/källskatten å ränteinkomst 

(f) 

rajoitetusti 
skattskyldig 

(xxvi) in Sweden: 

verovelvollisen 

lähdevero/källskatten 

för 

begränsat 

(a) 

statlig inkomstskatt 

(b)  kupongskatt 

(c) 

kommunal inkomstskatt 

(xxvii) in the United Kingdom: 

(a) 

Income Tax 

(b)  Corporation Tax. 

(2) 

In Article 3(1), the following indents are added: 

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–  in Bulgaria: 

Министъра на финансите или негов упълномощен представител, 

–  in Romania: 

Agenţia Naţionala de Administrare Fiscala. 

Article 2 

The Arbitration Convention, as amended by the Protocol of 25 May 1999, the Conventions of 
21 December 1995 and of 8 December 2004 and this Decision, drawn up in the Bulgarian and 
Romanian  languages  and  annexed  to  this  Decision,  shall  be  authentic  under  the  same 
conditions as the other texts of the Arbitration Convention and the Protocol. 

Article 3 

The Arbitration Convention, as amended by the Protocol of 25 May 1999, the Conventions of 
21 December 1995 and of 8 December 2004 and this Decision, enters into force on 1 January 
2007  between  Bulgaria,  Romania  and  the  other  Member  States  for  which  the  Arbitration 
Convention is in force. It enters into force between Bulgaria, Romania and each of the other 
Member States on the day the Arbitration Convention enters into force for the other Member 
State concerned. 

Article 4 

This  Decision  shall  take  effect  on  the  day  following  that  of  its  publication  in  the  Official 
Journal of the European Union. 

Done at Brussels, […] 

For the Council 
The President 
[…] 

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ANNEX 

Text  of  the  Convention  on  the  elimination  of  double  taxation  in  connection  with  the 
adjustment of profits of associated enterprises, as amended by the Protocol of 25 May 1999, 
the  Conventions  of  21  December  1995  and  of  8  December  2004  in  the  Bulgarian  and 
Romanian languages. 

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Proposal for a 

COUNCIL DECISION 

amending Annex I to the Act of Accession of Bulgaria and Romania 

THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty on the European Union,  

Having regard to the Treaty establishing the European Community, 

Having regard to the Act of accession of Bulgaria and Romania, and in particular Article 3(6) 
thereof, 

Having regard to the proposal from the Commission8, 

Whereas: 

(1) 

(2) 

Article  3(3)  of  the  Act  of  Accession  of  2005  provides  that  Bulgaria  and  Romania 
accede to the conventions and protocols concluded between the Member States, listed 
in its Annex I. 

In the period preceding the accession of Bulgaria and Romania to the European Union, 
the Member States have signed on 8 December 2004 a Convention on the accession of 
the  Czech  Republic,  Estonia,  Cyprus,  Latvia,  Lithuania,  Hungary,  Malta,  Poland, 
Slovenia and Slovakia, to the Convention of 23 July 1990 on the elimination of double 
taxation  in  connection  with  the  adjustment  of  profits  of  associated  enterprises9 
(hereafter "the Arbitration Convention"). 

(3) 

It  is  appropriate  to  provide  for  the  accession  of  Bulgaria  and  Romania  to  the 
Arbitration Convention as amended by the Convention of 8 December 2004. To that 
effect, that Convention should be added to Annex I of the Act of Accession of 2005, 

HAS DECIDED AS FOLLOWS: 

Article 1 

Annex I to the Act of Accession of 2005 is amended as follows: 

In point 2, the following indent is added: 

8 
9 

OJ C , , p. . 
OJ L 225, 20. 8.1990, p. 10. 

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« 

- Convention of 8 December 2004 on the accession of the Czech Republic, the 
Republic  of  Estonia,  the  Republic  of  Cyprus,  the  Republic  of  Latvia,  the 
Republic  of  Lithuania,  the  Republic  of  Hungary,  the  Republic  of  Malta,  the 
Republic of Poland, the  Republic  of Slovenia and the Slovak Republic to the 
Convention  on  the  elimination  of  double  taxation  in  connection  with  the 
adjustment of profits of associated enterprises (OJ C 160, 30.6.2005, p. 1). » 

Article 2 

This  Decision  shall  take  effect  on  the  day  following  that  of  its  publication  in  the  Official 
Journal of the European Union. 

Done at Brussels, […] 

For the Council 
The President 

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