Romania changed the number that most foreign shareholders had memorized. Law 141 of 25 July 2025 amended the Fiscal Code so that the dividend tax rate is 16 per cent, and article VII of that law applies the change to dividends distributed from 1 January 2026, or from the first day of a modified fiscal year beginning in 2026 for taxpayers on a non-calendar year. The same law made the corresponding change for dividends paid to non-resident beneficiaries and for dividends received by individuals.
The transitional rule sets the contrast plainly. Dividends distributed on the basis of interim financial statements drawn up during 2025, or during a modified fiscal year beginning in 2025, remain subject to the 10 per cent rate, without recalculation once they are regularized against the annual accounts. A Romanian subsidiary that made an interim distribution in December and a final distribution in March is therefore looking at two different rates on the same commercial year.
The number that changed on 1 January
The mechanics sit in three separate provisions, and it is worth knowing which one applies to a given payment. Article 43(2) of the Fiscal Code, as amended, sets the dividend tax at 16 per cent of the gross dividend paid to a Romanian legal person, declared and paid to the state budget by the 25th of the month following payment. Article 97(7), as amended, applies 16 per cent to dividend income of individuals, with the tax final and the withholding obligation on the paying company.
For a Dutch parent the relevant provision is the third. Article 224(4)(b), as amended by point 41 of the same law, sets 16 per cent for dividend income falling within article 223(1)(a), which is the head covering dividends from a Romanian resident to a non-resident. Article VII(1)(h) applies that change from 1 January 2026 on the same distribution-date basis as the domestic rule.
Sixteen per cent is a materially different number from the eight per cent that Ordinance 16/2022 applied to dividends distributed from 1 January 2023, and from the ten per cent that Emergency Ordinance 156/2024 applied in 2025. It is also, for most Dutch corporate shareholders, a rate they will never pay, because the exemption sits in front of it.
The exemption is the operative rule
Article 229 of the Fiscal Code lists income exempt from the tax on income obtained in Romania by non-residents. Point (c) covers dividends paid by a Romanian resident to a legal person resident in another Member State of the European Union, or to a permanent establishment in another Member State of a company from a Member State, where the stated conditions are met. Point (c1) extends comparable treatment to legal persons resident in Iceland, Liechtenstein and Norway.
The conditions are four and cumulative. Article 229(1)(c) requires the beneficiary to hold at least 10 per cent of the share capital of the Romanian payer for an uninterrupted period of at least one year ending on the date the dividend is paid. The others are structural: the beneficiary must take one of the listed legal forms and must be subject to corporate tax without the possibility of an option or exemption, which a transparent or exempt Dutch vehicle fails. The published guidance of the Romanian tax administration works the point through an example in which the beneficiary holds 10 per cent of the participations in the Romanian payer for a period longer than one year, and treats the exemption as available on that basis together with the documentary conditions described below.
The consequence is that the 16 per cent headline rate is the outcome for a shareholder who fails the conditions or fails the paperwork, not the outcome for a properly documented Dutch parent. That is a different way of thinking about the rate change. It did not make the structure more expensive. It made failure more expensive.
The paperwork is the substance of the claim
Romanian practice on this point is documentary rather than conceptual, and the documents have deadlines. The payer must hold a certificate of fiscal residence for the beneficiary at the time of payment. It must also hold the declaration for exemption from taxation in Romania of dividend payments made by a Romanian legal person to a legal person resident in another Member State, which is Annex 16 to Order of the Minister of Public Finance no. 583/2016.
The payer then reports. The informative declaration on tax withheld at source and on exempt income by non-resident beneficiary, form D207, is filed with the competent tax office by the last day of February of the current year for the preceding year. The instructions to the form are explicit that D207 is completed and filed for exempt income as well as for income on which tax was withheld. A structure that correctly pays nothing still files.
Where the certificate is not presented, the domestic rate applies and the question becomes one of refund rather than of exemption. That is a slow route in any jurisdiction. The discipline that avoids it is unglamorous: obtain the residence certificate for the correct year before the distribution is approved, not after it is paid, and diarize the February filing as a fixed obligation of the Romanian company rather than as a consequence of a distribution.
The treaty rate is a fallback, and a good one
Where the directive route fails, the treaty concluded between the Kingdom of the Netherlands and Romania and in force since 29 July 1999 is unusually generous. Article 10(2) of that treaty allows the source state to tax dividends where the beneficial owner is a resident of the other state, but caps the tax at nil per cent of the gross amount where the beneficial owner is a company, other than a partnership, holding directly at least 25 per cent of the capital of the paying company. It caps it at 5 per cent where the direct holding is at least 10 per cent, and at 15 per cent in all other cases.
A nil rate at a 25 per cent direct holding is worth knowing about, but it is not a way around a holding period. Since the Multilateral Convention modified the treaty, the reduced rates in article 10(2) apply only where the ownership condition is met throughout a 365 day period that includes the day of payment, and a principal purpose test applies. The difference from the directive route is one of counting: the Romanian year must end on the payment date, while the treaty period may be completed either side of it.
Both routes require a certificate of fiscal residence, and article 230 of the Fiscal Code provides that where domestic law, the treaty and European law differ, the more favourable applies. The instruction is to document both routes and claim on the one available, not to assume the directive route and discover the gap in an examination.
The minimum turnover tax sits underneath
The Romanian corporate income tax rate is 16 per cent of the fiscal result, although a company below the revenue threshold in article 47 meeting its other conditions may opt instead to be taxed at 1 per cent of revenue as a microenterprise. Beneath the 16 per cent, for large companies, sits a charge that has no relationship to profit. Article 18^1 of the Fiscal Code imposes a minimum turnover tax on taxpayers whose preceding-year turnover exceeded 50.000.000 euro, computed on total revenue reduced by defined items. Emergency Ordinance 89/2025 inserted a new paragraph setting the rate within that formula at 0,5 per cent for the 2026 fiscal year, and a further paragraph providing that the article applies until 31 December 2026 inclusive, or the last day of a modified fiscal year ending in 2027.
For a Dutch parent modelling distributable profit from a Romanian subsidiary above that turnover threshold, this matters in the years when the subsidiary is investing. A company of that size in loss, or one whose corporate tax is small because of accelerated deductions, can still carry a turnover-based charge, and that charge reduces the amount available for distribution before any dividend question arises.
The stated expiry is equally relevant. A charge with a legislated end date has a habit of being extended, and a model that assumes it disappears at the end of 2026 is making a forecast rather than reading a statute. The prudent position is to model both cases and to tell the shareholders which one the projection assumes.
What Romanian examiners test
Romanian examination practice on outbound dividends concentrates on three things, and none of them is the rate. The first is the residence certificate: whether it exists, whether it covers the correct period, and whether it was held at the time of payment rather than obtained afterwards. The second is the Annex 16 declaration and its consistency with the register. The third is whether the recipient is the beneficial owner of the dividend in substance as well as in form.
The third is where a thin Dutch holding company is exposed, and the exposure does not come from Romanian law. It comes from the anti-abuse provision in Parent-Subsidiary Directive 2011/96/EU as transposed, and from the treaty. A Dutch entity that receives a Romanian dividend and pays it onward within days, under an arrangement fixed in advance, on the instruction of a shareholder elsewhere, will be examined on that pattern regardless of what the register shows.
The remedy is the one described in our note on Dutch substance requirements. The board must be capable of deciding what to do with the dividend, and must be seen to have decided. Where the group’s answer is that the money always goes straight up, the honest structure reflects it rather than disguises it.
The Dutch end of the same flow
On the Dutch side the incoming dividend from a qualifying participation falls within the participation exemption, so the Romanian result is not taxed a second time on receipt. Where Dutch corporate tax does apply, article 22 of the Wet op de vennootschapsbelasting 1969 sets 19 per cent on the taxable amount up to 200.000 euro and 25,8 per cent above, in the version in force from 1 January 2026.
The onward distribution engages article 5 of the Wet op de dividendbelasting 1965, which sets dividend withholding tax at 15 per cent of the proceeds, reduced under treaties and not levied within the European Union in qualifying cases. Whether that 15 per cent is a real cost depends entirely on where the ultimate shareholders are resident.
Set the two ends side by side and the structure is easy to describe accurately. Romania collects its corporate tax at the rate of the subsidiary’s regime and, correctly documented, nothing on the distribution to a Dutch parent. The Netherlands collects nothing on the receipt and something on the way out, depending on the shareholders. The Dutch company earns its position by holding the participation properly and by being able to prove it, not by reducing a Romanian rate that the directive and the treaty had already reduced.
This article is informational and does not constitute tax or legal advice. The treatment of any structure depends on its facts and on the law of each jurisdiction involved. Each engagement is subject to scope and applicable regulation.