Romania Dividend Taxes Explained: Rules, Rates, and How to Pay

Key Points

• Dividends distribute company profits or reserves to shareholders as cash, shares, or assets.
• In Romania, dividend tax rises to 16% from 2026, with additional health contributions for individuals.

Dividends represent a distribution of a company’s net earnings or reserves to eligible shareholders, proportionate to their ownership.

They provide shareholders with income and reflect how companies share generated value with investors.

Companies may distribute dividends annually or periodically, depending on financial performance and shareholder approval.

What are dividends

Dividends are portions of profits or distributable reserves paid to shareholders as compensation for holding shares.

They are usually paid in cash, additional shares, or, in some cases, other assets owned by the company.

Dividend levels are proposed by a company’s management and approved by shareholders through formal decision-making processes.

The amount an investor receives depends on the dividend per share and the number of shares owned.

Not all profits are distributed, as companies may retain earnings for growth, operations, or reserves.

Dividend taxation in Romania

In Romania, dividends distributed starting January 1, 2026, are subject to a 16% withholding tax.

The tax applies to individuals, companies, and non-residents, with possible reductions under EU rules or double taxation treaties.

The company distributing dividends withholds and remits the tax to the state, while shareholders receive the net amount.

Individuals may also owe a health insurance contribution if annual dividend income exceeds defined income thresholds.

Dividend tax obligations arise at the time dividends are paid, including for interim dividends distributed during the year.

Dividends differ from profit because profit measures value created, while dividends represent the portion approved for distribution.

On the Bucharest Stock Exchange, dividend payments follow standardized procedures, including record dates and payment dates.

Dividend income is one form of investment return, alongside interest and capital gains, each with distinct risk and taxation profiles.