Raising the tax on dividends to 16% not only means that entrepreneurs will have less money in their pockets, but that many will not even take out dividends, which means less money going to the state. In 2026, profit distribution becomes a decision with liquidity risk, SMEs come under strong fiscal pressure, and financial strategies are rewritten from the ground up. For more and more companies, reinvestment will no longer be a smart option, but the only solution for survival, warn the specialists consulted by “Adevărul”.
More and more businesses will close in 2026. File photo
For most entrepreneurs, the dividend is the natural motivation for starting a business – the reward for work, risk and responsibility. “Increasing the tax on dividends to 16% is a direct blow to entrepreneurs who have taken the risk of building businesses in Romania. Doubling the tax exactly on this component sends a dangerous signal: the state penalizes private initiative, instead of encouraging it. In our community I see more and more entrepreneurs who want to sell their business. It does not stimulate reinvestment, it pushes towards caution and lock-in. And in an economy that desperately needs capital and initiative, that's exactly what we can't afford“, business consultant Mona Bardoș, founder of Monasi and leader of the Small Entrepreneurs community in Romania with over 60,000 members, told “Adevărul”.
The increase in taxation is not only an additional burden, but a moment that forces the market to reset itself, business consultant Florin Leucă declared for “Adevărul”. The specialist says that, in reality, the impact does not only hit immediate liquidity, but also the mindset of entrepreneurs. “Such moments differentiate reactive businesses from sustainable and competitive ones. It will be a catalyst for recalibration: more financial discipline and more added value“, added the specialist.
In a context already marked by instability, this measure undermines confidence in any development plan. The effects are already appearing: entrepreneurs who distribute their dividends in advance, who postpone investments or analyze tax optimization options outside the country.
On the other hand, tax consultant Adrian Ghencea points out that the tax pressure is also amplified by the changes in the micro-enterprise regime. “By reducing the ceiling to 100,000 euros turnover, any company that exceeds this threshold becomes a payer of 16% profit tax. Coupled with the 16% dividend tax, the financial effort becomes considerable and difficult to sustain. Service providers who exceed this ceiling by 1 euro will first pay 16% profit tax, and then another 16% on dividends”the specialist declared for “Adevărul”.
The direct impact of the dividend tax increase to 16%
The increase in the quota from 10% to 16% produces immediate effects on the income of entrepreneurs and on financial decisions in companies. The change affects both personal liquidity and profit distribution and reinvestment strategies.
Here is what is happening according to fiscal consultant Adrian Ghencea:
1. Decrease in net dividend
◦ Gross dividend 100,000 lei:
▪ at 10% tax → net 90,000 lei
▪ at 16% tax → net 84,000 lei
◦ Direct loss: 6,000 lei
◦ The 6 percent increase immediately reduces entrepreneurs' income.
2. Dividend distribution becomes less attractive
◦ Many entrepreneurs will prefer to reinvest profits.
◦ Others will delay distribution to avoid loss of liquidity.
3. Additional pressure on the business environment, especially on SMEs
◦ The increase is in addition to other recent tax increases (micro, VAT, contributions).
◦ The fiscal attractiveness of small SRLs is visibly decreasing.
4. Changes in companies' strategy
◦ It is expected to rush the distribution of dividends before the 16% quota comes into force.
◦ Profit will be kept in the company more often.
◦ Remuneration alternatives will be used: management contracts, consultancy, deductible benefits.
5. Impact on personal investments: Lower dividends reduce the cash available for reinvestment, new projects or the development of existing businesses.
Who will be most affected by the dividend tax increase?
The increase in dividend tax from 10% to 16% has a direct impact on entrepreneurs and investors, significantly reducing the net income of shareholders and changing the way companies plan to distribute their profits.
According to Ghencea, the main categories on which the impact is felt directly in personal income or in the financial structure of the business:
• Small and medium-sized entrepreneurs (SMEs) – dividends are the main income of associates; direct decrease in annual income.
• Micro-enterprises with few employees – simultaneously bear the increased micro-tax and the reduction of net dividends.
• Freelancers and consultants switched to SRL – the tax advantage of the structure on SRL is significantly reduced.
• Start-ups with early profit – the founders lose the ability to self-finance through dividends.
• Entrepreneurs who live exclusively on dividends – immediate decrease in real monthly income, in the absence of a salary.
What entrepreneurs affected by the increase in dividend tax should do
As the increased tax on dividends will have the income of entrepreneurs, they can take certain measures to be able to increase their own finances.
“The dividend tax increase is not the end of the world, but it is certainly a test of competitiveness and sustainability for businesses in Romania. But entrepreneurs who treat the raise as a mere expense will miss the opportunity to strengthen and improve their business. Companies that optimize their operations, strengthen their commercial offering and reinvest part of their profits in increasing productivity will emerge much stronger, more competitive and more resilient from this challenging macroeconomic context. In a volatile economy, agility is the skill that gives competitive advantage“, said business consultant Florin Leucă for “truth“.
He recommends three clear directions for the absorption of this 6%, removing any negative impact on the beneficiaries of dividends (associates, shareholders) and on businesses undergoing consolidation or development:
1. Increasing sales by recalibrating the commercial offer and repositioning products or services. Many companies can improve their profit margin without raising their prices if they rethink their products or services in terms of perceived customer value.
How can customer perception be influenced? By grouping products and/or services (bundling), partnerships with entrepreneurs with complementary offers, differentiating products or services by level (standard, premium, etc.), loyalty programs, digital sales channels, pre- and post-sales consulting.
All of these tactics can generate additional income. Those who innovate in the offer always win over those who keep cutting costs or compete at the lowest price.
2. Optimizing operations and reducing waste. In most of the companies I analyze, there is between 5% and 12% waste that comes from: redundant processes, poor time management, non-competitive procurement, inefficient resource allocations, outdated or technologically outdated equipment, bureaucracy, lack of evaluating and rewarding employee performance. Well-done optimization of a business can fully cover the fiscal impact without any sacrifice in the area of investments, dividends or employee bonuses.
3. Reinvesting capital gains and calibrating dividend policy. In the current fiscal context, the differentiation between dividends as a personal reward and profit reinvestment as a development tool of any business is essential. I recommend entrepreneurs to create clear rules on profit distribution (which depend on business performance, a liquidity test, opportunities and strategic development goals), prioritize business capitalization and treat financial decisions from a rational perspective. In other words, let's choose strategically when and how much of the profit we distribute in the form of dividends, not emotionally, so that we can continue to do so in the future.
The increase of the dividend tax to 16% marks a turning point for Romanian entrepreneurship. It is not just a rate adjustment, but a signal that changes behaviours: fewer dividends, more caution, deferred investments and, for some entrepreneurs, the decision to exit the business.
In the short term, the state risks collecting less, and in the medium term it risks eroding exactly the base of private initiative that the economy needs. In this context, it is not those who react emotionally who survive and strengthen, but those who strategically rethink their business model, optimize their operations and turn fiscal pressure into a maturing exercise. But without predictability and real incentives for domestic capital, Romania risks losing not only money, but entrepreneurs.
