Dividends from a Romanian company: tax, timing and process

Getting this right matters twice: once for the tax bill, and once for staying clean at inspections. Below is how the mechanism works, what the two layers of taxation look like, and the mistakes we most often fix when taking over a company's books.

A dividend is a distribution of profit that actually exists in the accounts — either the profit of a closed financial year, approved by the shareholders together with the annual statements, or profit shown in interim statements during the year. You cannot distribute money the company has not earned: distributing from non-existent profit is unlawful and unwinds badly at inspection.

This is also why bookkeeping quality feeds directly into your personal income. If the books are behind or wrong, nobody can say what profit is distributable — and every month of delay is a month you cannot safely take money out. A clean monthly accounting routine is what makes reliable distributions possible.

Profit is taxed twice on its way from your company to your pocket: first at company level, then at distribution. At the review date the layers look like this:

The combined effect is still one of the more moderate profit-extraction burdens in the EU, which is part of why founders choose Romania — but the exact numbers for your case depend on your regime and residency, so treat this as the map, not the calculation.

• —Annual: after year-end, the shareholders approve the financial statements and decide how much of the approved profit to distribute. Clean and simple.
• —Quarterly (interim): during the year, the company prepares interim statements and distributes from the profit shown in them. After the annual statements are approved, the amounts are regularized — if you took more than the final profit supports, the difference goes back.

Quarterly distributions are popular with owner-managed companies because they smooth personal cash flow. They also add paperwork and a real regularization risk in volatile years, so we recommend them case by case, not by default.

Foreign shareholders receive dividends from Romanian companies routinely — the payment itself is a normal bank transfer abroad. The tax question is which rate Romania withholds. Romania has an extensive network of double-taxation treaties, and a treaty may cap the Romanian withholding for residents of the other state. Relief is not automatic: the company must hold a valid tax residency certificate from the shareholder at the time of payment. We collect and track these certificates for our clients as part of the dividend paperwork — more on the whole setup in our guide for foreign shareholders of Romanian companies and on the foreign-owned companies service page.

The most common problem we inherit from previous accountants is money taken out of the company without a legal basis — transfers to the owner recorded as advances, loans that were never documented, or simply a growing balance the books cannot explain. Never "borrow" company money informally. Those balances do not disappear; they sit in the accounts, they are among the first things a tax inspector reads, and cleaning them up later is always more expensive than doing a proper dividend in the first place. If you need a shareholder loan in either direction, it must be documented and visible in the balance sheet — done properly, it is a normal instrument.