Romanian Tax on Dividends: Key Updates for 2025

As of January 1, 2025, Romania applies a 10% withholding tax on dividends paid by Romanian companies to both resident and non-resident shareholders. This marks an increase from previous years but remains competitive within the EU.

For non-resident shareholders, the 10% tax can potentially be reduced if there is an applicable tax treaty between Romania and the investor’s country of residence. It is crucial for non-residents to check specific treaties, as they may provide for lower rates or exemptions.

Romanian holding companies can benefit from certain tax reductions or exemptions on dividends received from subsidiaries, provided they meet specific criteria like a minimum holding percentage and holding period. These measures encourage reinvestment and help reduce the tax burden on intercompany dividends.

Typically, dividend tax is withheld at the source, meaning individual shareholders generally do not need to file a separate tax return. However, non-resident investors may need to file for a refund or apply for a reduced withholding tax rate under tax treaties.

The 10% dividend tax still keeps Romania an attractive location for investment, though businesses should consider its impact on dividend strategies and compare it with other jurisdictions. Romania continues to enforce anti-avoidance rules to ensure compliance and proper withholding, which is critical to avoid penalties.

In summary:
• Dividend tax rate: 10% for both residents and non-residents.
• Non-residents: Can benefit from treaty reductions.
• Holding companies may qualify for exemptions/reductions.
• Compliance is key to avoid penalties.

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