The first modification that impacts dividend income refers to a higher personal income tax rate on this type of income. The higher tax rate will apply on dividends generated after January 1, 2023.
The new (higher) income tax rate that will apply is 8% (increased from 5% as applicable in the present), as per the recent Ordinance amending the Tax Code.
This modification will apply to income from dividends received after January 1, 2023. Therefore, dividends received this year (2022) will continue to be taxed at 5%. The increased tax rate is applied to dividends received both from Romanian companies and from non-resident companies. So, if you generate dividend income from non-resident companies (resident outside of Romania), your income will be impacted as well.
The second modification refers to the application criteria of CASS (health insurance contribution) for extra-salary income (e.g. dividends, capital gains, rental income, income from independent activities, etc.). Criteria based on which the health insurance contribution (CASS) is due on certain types of extra-salary income (including dividends) were also modified.
