The Romanian tax treatment of income obtained from dividends has been the subject of several changes over time. These changes were enacted into the Romanian Tax Code by successive Romanian governments. The latest and most important of them was the recent increase of the tax rate from 8% to 10% as of 1 January 2025.
Below you can find out all the necessary information about Romanian taxes on dividends due in 2024, but also information on the recent change for 2025. We explain the obligations you have regarding tax reporting of dividend income, both as a company and as individual shareholder. All of them in the article below.
According to Romanian companies law (Law no. 31/1990), any individual or legal person may benefit from the payment of dividends when he/she owns shares in a company, no matter if it is a limited liability company, or a joint stock company.
Specifically, as per Romanian law, dividends constitute part of the profit that a company makes during a financial period (e.g., during a year). This profit can be distributed to each shareholder or associate in that company, in proportion to the number of shares which the shareholder or associate owns.
Therefore, according to the same law, companies that can pay dividends are only those that book a profit at the end of their financial year. On the other hand, even if they make a profit, not all companies pay dividends. The decision to pay dividends always stays with the company’s management.
Among those who do not rush to pay dividends are usually small companies. These are at the beginning of their business development, and want to reinvest all profits for development purposes. Reinvestment of profit allows a company to develop at a more rapid pace.
As already mentioned, as an important update, the Romanian tax law was amended as of 1 January 2025. Among the latest numerous tax changes as of 2025, the Romanian income tax on dividends have also changed. More precisely, the income tax rate applicable to dividends was increased from 8% to 10%. This means that any dividend income received as of 1 January 2025 will be taxed with the new income tax rate of 10%.
An individual tax payer owes health insurance contribution only if his total income obtained from sources other than salary and freelance activities altogether (i.e., dividends, income from the sale of shares, income from rental, interest income, income from cryptocurrency transactions, etc.) reaches the threshold of 6 national gross minimum wages during a tax year.
For example, for 2025 this threshold is set at the level of 24,300 Lei (i.e., 6 x 4,050 lei. The amount of 4,050 lei is the minimum national monthly wage established by the government for year 2025).
This is the first threshold for which the health insurance contribution is due and is set at 6 national gross minimum wages/year. If this threshold is reached, the health insurance contribution is capped to 10% of this amount. This means a fixed annual contribution of 2,430 lei for the income obtained in 2025.
In addition, the second threshold applicable is set at 12 minimum wages per economy, while the third (and last) threshold is of 24 minimum wages per economy.
Thus, if the value of the annual taxable income reaches one of the two higher thresholds, the contribution will be calculated at that threshold (12 or 24 minimum wages per economy).
Whenever the contribution is due, it must be calculated on the taxable base capped at 6, 12 or 24 minimum wages, and not on the actual income derived. This means that, even if during 2025 someone derives income that far exceeds the threshold of 24 gross minimum wages, that person will pay the health insurance contribution (CASS) on the basis of 24 minimum wages and not on the actual income realized.
Another important detail is that the health insurance contribution is due by the beneficiary of income even if they also have the employee status under which they already pay this contribution during the year.
The tax reporting for the purpose of paying the health insurance contribution must be fulfiled by the individual beneficiary of income. This must be done through filing the annual tax return. For income generated in 2025, the annual tax return filing deadline is 25 May 2026. While for 2024 the reporting deadline is on 25 May 2025.
Through the same annual tax return an individual must also declare the estimated income of Romanian sources to be realized during the current year (the year in which the declaration is filed). If one estimates that he/she will be deriving income subject to taxation during that year, taxes will be due in advance for certain types of income.
In the case of taxation of dividends paid from abroad, it is important to correctly apply the double tax treaties that Romania has signed with other states. Generally, in all situations where, according to the applicable treaty, the dividend income is taxed in the source state, Romania, as the state of tax residency of the beneficiary individual, has the obligation to recognize the tax already withheld by the other state and to deduct it from the amount of tax due in Romania.
Dividends paid from abroad are subject to the same tax treatment (10% income tax, plus CASS 10% due on the annual capped thresholds described above), the difference being the application of the convention for avoiding double taxation, where the case, and also the method of declaring the income.
More specifically, given that the company which distributes the dividends is not resident in Romania, the obligation to withhold, declare and pay any Romanian taxes on dividends at source does not apply.
As a consequence, the obligation to declare and pay the income tax sits entirely with the beneficiary of income. Therefore, the individuals deriving such income have the obligation to declare and pay both the income tax (10%), as well as the health insurance contribution (CASS). The declaration and payment of Romanian taxes on dividends received from abroad must also be done through the annual tax return.
You can also find more guidance on how the double tax avoidance works in our Expat Tax Guide.
As a basic rule, according to the Companies Law currently in force (Law no. 31/1990 republished and updated) dividends are distributed only to the individuals or legal entities who have the status of associate or shareholder within a company, and can be both under the form of cash, shares, or under the form of goods (although very rarely).
The distribution of dividends is not mandatory, and this represents the decision of the board of directors or the general meeting of the associates of the respective company, as the case may be.
It is also important to know that in the past Romanian companies were allowed to distribute dividends only at the end of the financial year. But starting with July 15, 2018, when the government amended the Companies Law, the dividend payment can also be done quarterly. Therefore, shareholders no longer have to wait until the end of the year to collect their share of the company’s profit, but they can do so after the end of each quarter.
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