Dividends remain one of the most commonly used ways for entrepreneurs to capitalize on their company’s profits. However, tax rules and distribution conditions must be carefully observed, especially in light of the changes applicable starting in 2026.

In this article, we explain—in clear and accessible terms—what dividends are, when they can be distributed, what taxes apply, and what reporting obligations exist.

1.What are dividends?

Dividends represent the share of profit paid to each shareholder or associate, proportionally to their participation in the paid-up share capital, in accordance with Company Law no. 31/1990.

2.How and when can dividends be distributed?

Dividends may be distributed exclusively based on a resolution of the General Meeting of Shareholders/Associates (GMS), which may take place:

• at least once a year, within a maximum of 5 months after the end of the financial year, for the approval of the annual financial statements and profit allocation;
• during the year (quarters I–III), in the case of interim dividends, based on interim financial statements.

3.Mandatory conditions for distribution

Dividends may be distributed only if:

• the legal reserves have been established;
• any carried-forward accounting losses have been covered, if applicable;
• the net assets are at least 50% of the subscribed share capital;
• in practical terms, a company may distribute dividends only if, after deducting all liabilities, the remaining value in the company is at least half of the subscribed share capital; if this threshold is not met, profits cannot be distributed as dividends.
• Companies that distribute interim dividends may not grant, in the same year, loans to shareholders/associates or other affiliated persons.
  • If, at the end of the year, the company’s profit exceeds the interim dividends distributed, the company may resume granting loans starting with the following year.
  • Failure to comply with this prohibition constitutes an administrative offense.
  • The applicable penalty is a fine ranging from RON 10,000 to RON 200,000.
• Companies which, based on the annual financial statements, have net assets lower than 50% of the share capital may not repay loans received from shareholders/associates or other affiliated persons.
  • The applicable penalty is a fine ranging from RON 10,000 to RON 200,000.

4.Dividend tax in 2026

Dividends distributed starting 1 January 2026

• Tax rate : 16%
• The tax is final and is withheld at source by the company distributing the dividends.

Interim dividends distributed during 2025

For dividends distributed based on interim financial statements prepared in 2025:

• tax rate 10%;
• the tax is not recalculated after regularization based on the annual financial statements for 2025;
• it is important to note that interim dividends cannot be distributed for the fourth quarter (Q4), therefore this option cannot be used to avoid or postpone the application of the 16% dividend tax rate.

5.Deadlines for paying dividend tax

Dividend tax must be paid:

• by the 25th of the month following the month in which the dividends are paid;
• if dividends have been distributed but not paid by the end of the year, the tax must be paid by 25 January of the following year.

6.Dividends and health insurance contribution (CASS) – what individuals need to know

Dividends received by individuals fall under the category of investment income and are taken into account when determining the obligation to pay the health insurance contribution (CASS).

Applicable CASS thresholds.CASS is due if the cumulative income (including dividends) reaches:

• 6 gross minimum salaries → CASS base = 6 minimum salaries;
• 12 gross minimum salaries → CASS base = 12 minimum salaries;
• 24 gross minimum salaries → CASS base = 24 minimum salaries;

⚠️For the purpose of determining the threshold, net dividends received are taken into account.

Individuals are required to declare CASS through the Single Tax Return (Form 212) by 25 May of the year following the one in which the income was earned.

7.Dividends between legal entities

General rule

• Dividend tax: 16%, applied to the gross dividend;
• the obligation to withhold and pay the tax lies with the company distributing the dividends.

Tax exemption situations

Dividend tax is not due if all the following conditions are met:

• the beneficiary holds at least 10% of the participation titles;
• the holding period is continuous for at least one year;
• both companies are corporate income tax payers (or subject to a tax that substitutes corporate income tax).

8.Dividends paid to non-residents

For non-resident individuals or legal entities:

• tax rate is 16%;
• a more favorable rate from a double taxation treaty may apply, only upon presentation of a valid tax residency certificate.

9.Dividend reporting – required forms

Withheld dividend tax is reported using:

• Form 100 – dividend tax;
• Form 205 – for romanian beneficiaries;
• Form 207 – for non-resident beneficiaries;
• Interim financial statements;
• Annual financial statements;

10.Conclusion

Dividends remain an attractive option for entrepreneurs, but the tax rules applicable in 2026 must be carefully observed. The 16% tax rate, proper correlation with CASS, and compliance with reporting deadlines are essential to avoid fiscal risks.

For a correct and optimal distribution of dividends, it is recommended to analyze the company’s financial and tax situation before making a decision. For more information, we invite you to read other articles we have published. Additionally, for fiscal updates applicable this year, the summary published by ANAF Timișoara may also be useful.