As financial results are finalized, many company owners consider distributing profits in the form of dividends. While dividend payout may appear straightforward, it requires careful accounting and tax treatment.
Before any distribution, the company must ensure:
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that distributable profit exists,
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that financial statements are properly approved,
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that all prior losses are covered,
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and that the decision is formally documented.
Dividend distribution also has tax implications. The withholding tax must be calculated correctly and reported in compliance with requirements set by FURS.
Common mistakes in practice
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distribution without formal shareholder resolution,
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incorrect calculation of withholding tax,
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payment before approval of annual accounts,
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lack of documentation supporting the payout.
Improper profit distribution can lead to additional tax assessments and penalties.
➡️ Practical advice: Profit payout is not just a transfer of funds — it is a legally regulated process.
CTA:
👉 Before distributing dividends, we can review the accounting and tax implications.