DIVIDEND PAYMENT BEHAVIOUR OF COMPANIES DUE TO CHANGE OF DIVIDEND TAX RATE IN ROMANIA

• Main Author: Stela JAKOVA
• Format: Article
• Language: English
• Published: Romanian Foundation for Business Intelligence 2017-06-01
• Series: Network Intelligence Studies
• Subjects: Fiscal policy; Taxation; Financial crisis; Dividend pay-out
• Online Access: http://seaopenresearch.eu/Journals/articles/NIS_9_1.pdf

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.