On 26 sept. 2013, the European Commission has officially asked Romania to amend its discriminatory tax treatment of employment income of non-residents.
Romanian legislation does not allow non-resident individuals who work and earn all or most of their income in Romania to benefit from personal and family deductions. This may result in unfair higher taxation in Romania, as the taxpayer’s personal and family situation risks being disregarded in both his country of residence where he does not have sufficient taxable income and in Romania as the country of employment.
According to the Commission, these Romanian provisions are contrary to the principle of free movement of workers as set out in the EU Treaties and EU case-law which has established that non-resident taxpayers earning all or most of their income in an EU Member State must receive the same treatment as resident taxpayers (Case C-279-93 Schumacker).
The Commission’s request takes the form of a reasoned opinion. In the absence of a satisfactory response within two months, the Commission may refer Romania to the EU’s Court of Justice.