Procurement of Zoom services for vocational training (case)


A company XYZ SRL, which deals with adult vocational training, purchases services accessing the Zoom platform. The company pays a monthly subscription to organise courses for 100-200 people.

What is the tax treatment for invoices received from Zoom?


According to article 223 paragraph (1) letter d) of the Tax Code, royalties from a resident are taxable income earned in Romania, regardless of whether the income is received in Romania or abroad.

We specify that the term royalty is defined in the methodological rules as any amount to be paid in money or in kind for the use or right to use any property or right referred to in Article 7 point 36 of the Tax Code, regardless of whether the amount is payable under a contract or as a result of illegal copying or infringement of another person’s legal rights.

It is important to mention that the amount to be paid as a royalty or service depends on the nature of the rights transferred, as specified in the contract with the service provider.

According to Article 7 point 36, payments of any kind received for the use or right of use of any of the following are considered royalties:

              (a) copyright in a literary, artistic or scientific work, including films, tapes for radio or television broadcasts, and the making of audio or video recordings;

  1. b) the right to make audio, video recordings, i.e. performances, broadcasts, sporting or similar events, and the right to transmit or retransmit them to the public, directly or indirectly, irrespective of the technical means of transmission – including by cable, satellite, optical fibre or similar technologies;
  2. c) any patent, invention, innovation, licence, trade mark or trademark, franchise, design, drawing, model, plan, sketch, secret formula or manufacturing process or software;

              (d) any industrial, commercial or scientific equipment, container, cable, pipeline, satellite, optical fibre or similar technology;

  1. e) any know-how;

              (f) the name or likeness of any natural person or other similar rights relating to a natural person.

It is not considered royalty for the purposes of this law:

(a) payments for the full acquisition of any property or any right of ownership in any of the items mentioned in paragraph 1;)

(b) payments for the purchase of software intended exclusively for the operation of that software, including for the installation, implementation, storage, customisation or updating thereof;

(c) payments for the acquisition of a full copyright in software or a limited right to copy it exclusively for the purpose of its use by the user or for the purpose of its sale under a distribution contract;

  1. d) payments for the acquisition of distribution rights to a product or service, without the right to reproduce;

(e) payments for access to satellites by renting a transponder or for the use of cables or pipelines for the transmission of energy, gas or oil, where the customer is not in possession of the transponders, cables, pipelines, optical fibres or similar technologies;

  1. f) payments for the use of telecommunications services under roaming agreements, radio frequencies, electronic communications between operators;

Thus, the correct classification of payments to non-residents can only be made on the basis of an analysis of the contract (regulation/terms and conditions).

Under classical conditions, the distribution to learners of content created by the company but recorded via the Zoom platform does not generate a royalty but you must analyse the terms and conditions of use of the platform (limitations on use).

Therefore, if the operation does not involve the transfer of a right such as to fall within the scope of royalties, it is considered a provision of services. I

In this situation, services provided outside Romania are not taxable from the point of view of non-resident income tax because, according to Article 223 of the Tax Code, among the services provided outside Romania only management and consultancy services are taxable in Romania.

Thus, as the services are not taxable in Romania, the company has no obligations regarding the tax on non-resident income (withholding tax, declaration or payment).

 If the operation involves the transfer of a right so that it falls within the scope of royalties, the company would be obliged to withhold tax on non-resident income at source.

We mention that the tax residence certificate of the beneficiary would allow the application of the more favourable provisions between the domestic legislation (Tax Code) and the double taxation convention between Romania and the state of residence of the beneficiary.

Legal basis:

– Tax Code (approved by Law no.227/2015, published in the Official Gazette no.688 of 10.09.2015), with subsequent amendments and additions;

– Methodological Norms for the application of the Tax Code (approved by HG no.1/2016).