Starting 1 January 2026, the tax regime applicable to certain types of income classified as “income from other sources” undergoes significant changes. According to Government Emergency Ordinance (GEO) No. 89/2025, the amendments mainly target benefits granted to shareholders and partners by the companies in which they hold participations. The applicable tax rate for these incomes increases from 10% to 16%, in line with the simultaneous increase in the dividend tax rate.
Types of Income Affected
The amendments to the Fiscal Code concern those pecuniary or non-pecuniary benefits which, although not distributed as dividends, represent personal advantages obtained by shareholders or partners. As of 2026, the tax is calculated by withholding at source, at the time the income is granted, by applying a 16% rate to the gross income, in the following situations:
- goods and/or services granted by a legal entity to a participant (shareholder or partner), used for personal purposes;
- amounts paid by the company to a participant for goods or services purchased from that participant, to the extent that the price exceeds the market value for similar transactions.
In these cases, the paying company is required to calculate, withhold, and remit the tax due, without the beneficiary being required to subsequently declare the income.
Alignment with Dividend Taxation
The increase in the tax rate applicable to income from other sources is justified by the legislator by the need to align the tax treatment of different forms of remuneration granted to shareholders. As of 1 January 2026, the dividend tax rate also increases from 10% to 16%, thereby reducing the differences in tax treatment between dividends and indirect benefits granted to equity holders.
This approach aims to limit practices whereby company profits were transferred to shareholders through alternative, more tax-efficient forms than the classic dividend distribution.
Implications for Companies and Shareholders
The increase in the tax rate requires greater attention to transactions between companies and their shareholders or partners. Benefits granted in kind, as well as transactions carried out at prices that do not reflect market value, will have a higher tax impact and require thorough documentation to avoid reclassification risks.