- In August 2019, the 8% rate was a temporary reduction, applicable only to undistributed profits of 2018 and earlier years, if distributed by the deadlines of August 20 or September 30, 2019, under the old Law No. 8438/1998.
- Outside those deadlines, the rate for those old gains became 15%.
- Law No. 8438/1998 is no longer in effect. Today, dividend tax is regulated by Law No. 29/2023 “On Income Tax.”.
- Importantly, today the 8% rate is no longer a temporary deduction; it is the permanent standard rate for every dividend, regardless of the year of earnings.
On August 10, 2019, the General Directorate of Taxes reminded taxpayers that undistributed profits realized in 2018 (and profits from 2017 and earlier years) could be distributed at a reduced rate of 81% instead of the standard rate of 15%, provided the payment was made by August 20, 2019 for 2018 earnings, or by September 30, 2019 for earlier earnings. The legal basis was Law No. 8438 of December 28, 1998, “On Income Tax,” which is no longer in effect.
From our daily work we still see businesses that, upon finding this kind of old notice online, confuse two different things: the temporary 2019 deduction for specific prior-year earnings, and today's standard rate, which is also 8% but applies permanently to every dividend, regardless of the year the earnings come from.
Read also: How profits are distributed and how dividends are taxed: our complete guide.
From the temporary discount to the standard rate
What was it in 2019?
In 2019, 8% was a time-limited incentive designed to encourage companies to distribute profits accumulated from previous years, which would otherwise have been taxed at the then-standard rate of 15%. The deadline was an essential part of the deduction, not just the rate.
What is today?
According to Law No. 29/2023 “On Income Tax,” dividends are taxed at a rate of 8%, withheld at source by the company distributing them, with no transition period and no condition regarding the year of earnings. This rate applies to individual partners who are residents, to resident entities, and, subject to double taxation treaties, to non-resident recipients as well.
Every time there is a tax or financial change that affects your business, we notify you directly by email with a practical explanation.
Send me free notificationsWhy it Matters
Don't confuse the figure with the rule.
The fact that the figure 8% is repeated, from the old deduction to today's rate, creates the false impression that nothing has changed. In fact, the legal framework, conditions, and deadlines have been completely changed. A business planning a dividend distribution today must rely on Law No. 29/2023, not on memories of 2019.
How we handle this with our clients
When a client plans a dividend distribution, we calculate the amount to be distributed, prepare the shareholders' resolution, and withhold and report the 8% tax within the current deadlines, without relying on old rules discovered by chance.
Frequently asked questions
Does the August or September 2019 deadline still apply?
No. It was a one-time deadline tied to the old Law No. 8438/1998, which is no longer in effect today.
Why is the rate still 8% if the law has changed?
It's a numerical coincidence, not a rule continuity. The new Law No. 29/2023 has chosen that very figure as the permanent standard rate, whereas the old law had it as a time-limited discount for only a few years of profit.
Where can I find today's dividend rules?
In our comprehensive guide on profit distribution and dividend taxation, linked above, which covers the rates, deadlines, and special cases under Law No. 29/2023.
