Dividends are shares of a company’s net earnings and/or distributable reserves that may be paid to eligible shareholders in cash, stock, or property as a reward for their investment. Dividends are important for a company’s investors as they represent a way to earn income for their shares; more shares translate into a larger dividend payout.
In Romania, the dividend tax rate increased from 10% to 16% for dividends distributed from January 1st, 2026. Dividend taxation is applied to individuals, companies, and non-residents, although reduced rates might apply for the latter category under EU directives or double taxation treaties.
This guide provides a clear explanation of dividends, why companies pay them, how investors benefit, and explains the differences between dividends and profit. You’ll learn all about dividend income and tax in Romania, how to calculate dividends, dividends on the Bucharest Stock Exchange, and other relevant information.
What are dividends?
Dividends represent a portion of a company’s profits or reserves, distributed to shareholders, periodically (usually annually or quarterly), as a reward for their investment.
Dividends are typically paid in:
- Cash
- Additional shares issued by the company
- Property and other assets
How dividends work
Dividends work based on the following key points:
- Dividend decision – The board of directors of a company proposes the amount of distributable profit (net earnings, distributable reserves), and the General Assembly of Shareholders has the final authority to approve, modify, or reject the proposal, within limits set by the law and the company’s governing documents.
- Calculating dividends – A gross dividend is calculated per share of the company, and the shareholder multiplies the amount by the number of shares owned in the company.
- Paying dividends to shareholders – Dividends are paid to shareholders by the company in various forms and at specific dates; the company withholds a dividend tax at source, which is ultimately paid to the state. The shareholder receives the net dividend after tax withholding.
Why companies pay dividends
Key reasons why the companies pay dividends to shareholders include the following:
- Shareholder reward – The company pays dividends to investors as a reward and to offer potential recurring income.
- Investment attraction – Companies that pay dividends to shareholders are more attractive for new investors, especially long-term ones.
- Success signal – When a company pays dividends to shareholders, often signals profitability and management confidence about future capital flows.
- Prevention of capital misallocation – If a company is mature and operates in a saturated market, keeping excess cash can be inefficient, and paying dividends reduces internal capital, but also prevents capital misallocation (inefficient acquisitions or wasteful spending).
Dividend rights explained
Dividend rights represent shareholders’ rights to receive a portion of a company’s net profits or distributable reserves, proportionally to their shareholding. In Romania, dividends are subject to a 16% tax, and may also be subject to CASS if the applicable income thresholds are exceeded.
Who is entitled to receive dividends
Shareholders who are registered as holders of dividend-entitled shares on the record date established by a company can receive dividends in proportion to their shareholdings.
Dividends can also be paid to the following groups:
- Directors can receive dividends if they are also shareholders of the company.
- Employees can receive dividends only if they hold shares in the company.
The key condition to receive dividends is that a person/entity is a shareholder on the record date (registration date). If someone buys shares after the record date, they are not eligible to receive dividends.
Difference between dividends and profit
The key difference between a company’s net profit and dividends is that the net profit measures the value generated by the company, and dividends determine how much of the value is distributed to shareholders.
- A company’s net profit represents earnings after operating costs, interest, depreciation, and corporate taxes. Until a distribution decision is made, the profit belongs to the company and may be retained, transferred to reserves, or partially distributed to shareholders as dividends.
- Dividends represent a part of the company’s net profit or distributable reserves, paid to shareholders via cash or in-kind. Dividends are not mandatory, and they require a formal decision made by the board of directors and approved by shareholders.
Not all profits become dividends, as companies often retain earnings to fund business development, operations, salaries, investments, and reserves.
Dividend income in Romania
In Romania, the current legislation states that shareholders or associates who legally own shares or participation interests
- They legally own shares or participation interests in the company.
- They are registered as shareholders on the record date
Dividends may be paid to the following entities:
- Individual shareholders, including Romanian residents and non-residents
- Corporate shareholders, including Romanian and foreign companies
Dividend tax in Romania
In Romania, dividend taxation rules are established by national tax authorities through the Fiscal Code.
The following entities are involved in dividend taxation in Romania:
| Entity | Role in dividend taxation | What they do | What they do NOT do |
|---|---|---|---|
| Romanian Parliament | Tax law decision-maker | Sets dividend tax rules and rates through the Fiscal Code | Does not collect or administer taxes |
| Romanian Government | Policy & implementation | Proposes tax changes and issues implementing norms | Cannot impose or change taxes without Parliament |
| Fiscal Code (Codul Fiscal) | Legal framework | Defines tax rates, exemptions, taxable persons | Does not apply taxes |
| ANAF (Romanian tax authority) | Tax administrator | Collects dividend tax, enforces compliance, audits | Does not set tax rates |
| Company paying dividends | Withholding agent | Calculates, withholds, and remits dividend tax to the state | Does not decide tax rates or keep the tax |
| Shareholder (individual or company) | Taxpayer / beneficiary | Receives net dividends; may declare additional obligations (e.g. CASS) | Does not withhold dividend tax |
In Romania, dividend tax is withheld at source by the company distributing dividends, while additional obligations such as CASS may apply at shareholder level.
Dividend tax rate
Romania increased the dividend tax rate from 10% to 16% for distributions made starting January 1st, 2026, for resident and non-resident eligible entities.
Interim dividends distributed in 2025 are taxed at 10%, even if paid in 2026, under transitional rules.
Who pays the dividend tax?
In Romania, dividend tax is withheld and paid to the state by the company distributing dividends. The shareholder (individual or company, resident or non-resident) is the taxpayer but does not pay the tax directly.
Dividend tax exemption conditions
Certain companies are exempt from dividend taxes as follows:
- Romanian company to Romanian company – If the dividend-receiving company owns at least 10% of the paying company’s capital for at least one year, withholding tax on dividends is exempt.
- Romanian company to EU-resident company – The same ownership condition applies, and if the dividend-receiving company holds at least 10% of the paying company’s capital for at least one year, dividend tax may be exempt under the EU Parent–Subsidiary Directive.
For companies outside the EU, reduced rates or exemptions may apply under applicable double taxation treaties (DTTs).
Where is dividend tax paid?
In Romania, the dividend tax is paid to the state budget via the accounts administered by ANAF (the National Agency for Fiscal Administration).
Key points about dividend tax payments include the following:
- The company pays the tax payment, not the shareholder receiving the dividend.
- The tax is transferred to the state budget account designated for dividend withholding tax.
- ANAF provides the exact IBAN for each local tax authority.
How to calculate dividends
Dividends are calculated on a per-share basis, meaning each share entitles its holder to the declared dividend amount per share.
The total dividends received by a shareholder equals the dividend per share multiplied by the number of shares held by the shareholder.
For instance, if a company declares a dividend of 2 RON/share, a shareholder who owns 1,000 shares of the company will receive 2 RON x 1,000 shares = 2,000 RON. This represents the gross dividends value.
Dividend tax calculation
The dividend tax is calculated by multiplying the gross dividend with 16% (the dividend tax in 2026 in Romania).
CASS on dividends
For individuals, CASS (health insurance contribution) applies if total annual dividend income exceeds the equivalent of 6 minimum gross wages.
- If the amount is between 6 and 12 minimum wages, there will be a 10% tax on 6 minimum wages.
- If the amount is between 12 and 24 minimum wages, there will be a 10% tax on 12 minimum wages.
- For amounts that are over 24 minimum wages, 10% tax will be applied on 24 minimum wages.
The current minimum wage in Romania is 4,050 RON.
There are multiple dividend calculators online that you can use.
For a 2,000 RON in gross dividend, the tax on dividends is 16%, meaning 320 RON. CASS will be 0 RON because the amount is below the level of 6 minimum wages.
For a gross dividend value of 200,000 RON the regular tax dividend of 16% applies, together with CASS taxes, as 200,000 RON represents over 24 minimum wages in Romania.
The total taxes for a 200,000 RON in dividends, is 16% of the amount (32,000 RON) plus 10% of 97,200 (9,720 RON, representing 24 minimum wages in Romania). The total taxes for 200,000 RON in dividends are 41,720 RON.
You can simply use a dividend tax calculator to see the exact amount that is paid for your dividends’ value according to standard taxes and CASS.
Interim dividends
Interim dividends are distributed to shareholders before the annual dividend, based on interim profits shown in interim financial statements prepared during the financial year.
Companies pay interim dividends to:
- Offer regular income to shareholders
- Signal a strong and stable cash flow
- Attract income-focused investors
In Romania, interim dividends are taxed like final dividends, but the timing is tied to the actual payment date, not to the end of the year.
The company withholds the dividend tax at source when it pays the interim dividends, and the tax becomes due immediately upon payment, ahead of the financial year-end.
For individual shareholders, CASS related to interim dividends, where applicable, is not withheld by the company and is paid in the following year through the Single Tax Return.
Dividends on the Bucharest Stock Exchange (BVB)
The Bucharest Stock Exchange publishes dividend-related information for listed companies, including trading symbols, prices, key dates, record dates, and declared dividend amounts.
Dividend distribution on the BVB is:
- Standardized
- Tightly regulated
The BVB-listed companies distribute dividends after approval by the General Meeting of Shareholders. These steps follow:
- After approval, the company sets an ex-dividend date (first trading day when shares no longer carry dividend rights), a record date (shareholders registered on this date are entitled to dividends), and a payment date (when dividends are actually paid)
- Eligible shareholders are identified by Depozitarul Central (an entity that identifies eligible shareholders, manages shareholders’ records, and facilitates dividend distribution logistics)
- Dividends are paid via brokers/designated payment agents (with dividend tax at source)
Bank Transilvania dividends and Hidroelectrica dividends are two notable examples of dividend-paying companies listed on the BVB, representing the financial and energy sectors.
Bank Transilvania dividends
The Bucharest Stock Exchange lists three separate dividend distributions made by Bank Transilvania (TVL), approved and paid at different times:
- The dividend of over 1.73 RON/share (the main annual dividend) is part of the largest payout totalling almost 1.59 billion RON, and it was paid from the 2024 profits on June 30, 2025. Shareholders registered on June 16, 2025 are entitled to this dividend.
- The dividend of over 0.64 RON/share (a supplementary dividend) is part of a total payout of 700 million RON, and it was paid from 2024 profits as well, on November 25, 2025. Shareholders registered on November 25, 2025 are entitled to this dividend.
- The dividend of over 1.25 RON/share (annual dividend), part of a payout of 1 billion RON, was paid from 2023 profits, on December 6, 2024. Shareholders registered on June 26, 2024 are entitled to this dividend.
Bank Transilvania is one of the most popular banks in Romania.
Hidroelectrica dividends
The BVB lists two dividends for Hidroelectrica (H20), the country’s electric energy leader:
- The H20 dividend worth over 8.9 RON/share is part of a payout of over 4 billion RON, and it was paid from 2024 profits on June 25, 2025. Shareholders registered on April 6, 2025 are eligible for this dividend.
- The H20 dividend worth 13.99 RON/share is part of a payout of over 6.29 billion RON, and it was paid from 2023 profits on June 28, 2023. Shareholders registered on October 6, 2024, are eligible for this dividend.
Dividends vs other investment income
Apart from dividends, you can gain from other types of investment income, including interest and capital gains.
Dividends vs interest
Dividends and interest are two different types of investment income, and the key differences are the following:
| Criteria | Dividends | Interest |
|---|---|---|
| Who receives it | Shareholders | Creditors or lenders |
| Source of payment | Company profits or distributable reserves | Deposits, bonds, or loan agreements |
| Dependency on performance | Depends on company performance | Independent of profitability |
| Decision/obligation | Requires shareholder approval | Contractually owed |
| Payment regularity | Paid when approved | Paid regularly according to contract |
| Taxation | Taxed at a flat withholding rate at payment | Taxed separately, at source |
| Risk level | Not guaranteed | Generally guaranteed by contract |
Dividends vs capital gains
The key differences between dividends and capital gains are the following:
| Criteria | Dividends | Capital Gains |
|---|---|---|
| Type of income | Periodic income | One-time income |
| Who receives it | Eligible shareholders | Investors who sell an asset |
| How income is generated | Paid by the company | Generated by selling an asset |
| Need to sell the investment | No | Yes |
| Source of return | Company profits or reserves | Market price appreciation |
| Dependency factors | Company performance and approval | Market conditions and timing |
| Taxation moment | Taxed at the time of payment | Taxed when the asset is sold |
| Cash flow | Provides regular cash flow | Provides cash only at sale |
FAQ about dividends in Romania
What are dividends?
Dividends are payments made by a company from its profits or distributable reserves to eligible shareholders usually in cash, shares, or property. Dividends represent a reward for shareholders for their investment in the company.
Who pays the dividend tax?
In Romania, dividend tax is withheld and paid to the state by the company distributing the dividends. Shareholders receive the net dividend.
Shareholders may also owe CASS to ANAF if dividend income exceeds certain thresholds.
When is dividend tax paid?
Dividend tax is paid at the moment when dividends are distributed.
How are dividends calculated?
Dividends are calculated on a per-share basis. Entitled shareholders who receive dividends have to multiply the number of shares they own by the dividend per share.
What is CASS on dividends?
CASS on dividends is a Social Health Insurance Contribution applicable to individuals if dividend income exceeds certain thresholds.
What is the calculation base for CASS on dividends?
In Romania, for the 2025-2026 tax years, the calculation base for the CASS on dividends is determined by capped thresholds based on multiples of the minimum gross wage.
CASS applies if total annual dividend income exceeds six times the minimum gross wage.
What are interim dividends?
Interim dividends are offered by a company to eligible shareholders before the annual dividend, based on interim profits shown in interim financial statements prepared during the year.
What is dividend income?
Dividend income is the portion of a company’s profits or distributable reserves set to be delivered to eligible shareholders in cash, shares, or property.
