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Dividend Payment Behaviour Of Companies Due To Change Of Dividend Tax Rate In Romania

Author

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  • Stela JAKOVA

    (Academy of Economic Studies Bucharest, Romania)

Abstract

This paper examines Romanian companies’ behaviour (listed on the Bucharest Stock Exchange) to a change of dividend tax rate. Even if the number of companies which had paid dividends in 2016, for 2015 decreased to 32, compared with 34 companies from previous year, the total value of paid dividends increased with 53% comparatively with dividends paid for 2014. This can be explained through the new tax rate which has been reduced from 16% to 5%. We found that the shareholders obtain profit from two sources: due to increase of gross dividend and due to decrease of the tax rate. Moreover, the paper found also: for the companies who paid higher dividend for 2015 compared with 2014 the dividend paid for 2015 is statistically significant different than the dividend paid for 2014; for the companies who paid smallest dividend for 2015, we were not able to find any statistical difference. This means that the companies which increased the dividend for 2015, took into consideration the new legislation and they are motivated to pay more to the shareholders; companies which decreased the dividend value for 2015 is due to some internal factors.

Suggested Citation

  • Stela JAKOVA, 2017. "Dividend Payment Behaviour Of Companies Due To Change Of Dividend Tax Rate In Romania," Network Intelligence Studies, Romanian Foundation for Business Intelligence, Editorial Department, issue 9, pages 7-15, June.
    • Handle: RePEc:cmj:networ:y:2017:i:9:p:7-15
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    More about this item

    Keywords

    Fiscal policy; Taxation; Financial crisis; Dividend pay-out;
    All these keywords.

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • G01 - Financial Economics - - General - - - Financial Crises
    • G3 - Financial Economics - - Corporate Finance and Governance

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