The law project, initiated by the entrepreneurial environment in Romania on 26th June 2017, was approved by the Chamber of Deputies on 13th June 2018 and provides that the dividend distribution can be made quarterly based on the quarterly financial statements approved by shareholders and associates.
The main aspects provided by the law project are:
- Quarterly distribution will be made within the limit of the net quarterly profit plus any retained earnings and withdrawn amounts of reserves available for that purpose, excluding all reported losses and the amount deposited in reserves in accordance with statutory requirements.
- This option foresees the obligation to prepare interim financial statements that will be audited for those persons who have the obligation of statutory audits of the annual financial statements, or opt for auditing them, according to the law, or by censors, if the annual financial statements are subject to verification by censors.
- Amounts related to interim dividend distributions are recorded in the accounting and reflected in the interim financial statements as receivables from shareholders or associates.
- The lower differences, respectively dividends distributed and paid over in the financial year shall be reimbursed within 60 days from the date of approval of the annual financial statements. The restitution obligation occurs for the persons who have received dividends on a quarterly basis and the management of the company has the obligation to pursue the recovery of these amounts and to order the necessary measures for this purpose.
- If quarterly dividend payments have been opted, the excess differences, respectivly dividends to be paid in the course of the financial year shall be paid within 60 days from the date of approval of the annual financial statements. Otherwise, after this term, the company owes penalty interest calculated according to art. 3 of Government Ordinance 13/2011.
- It is considered a criminal offense and it is sanctioned with imprisonment from 6 months to 3 years or a fine for the administrator of the company or the executive director who receives or pays dividends in any form from fictitious or non-distributed benefits, in the absence of the interim financial statement or annual financial statement, as the case may be.
Please note that in order to enter into force the project law must be published in the Official Gazette.
For further information, our consultants are at your disposal.
Contact person tax department:
Senior Tax Advisor
Mobil: +40 736 012 643