Changing Dividend Taxation, Dividend Policy, and Sustainability Reporting: Evidence from BVB-Listed Companies through a Forensic Accounting Lens

Dividend policy has continued to be one of the most argued over corporate financial decisions - especially if taxation has an effect on the incentives of managers and the returns of shareholders. This paper investigates the impact of the recent dividend tax reforms in Romania by examining a sample of 24 profitmaking companies listed on the Bucharest Stock Exchange over the period 2022-2025. Two fixed-effects econometric models with standard errors calculated based on the Driscoll-Kraay estimator were applied in order to determine the response of total dividends and profit retention to two successive dividend tax increases. Findings suggest a short-term increase in dividend payments after the 2023 tax reforms - followed by an opposite trend following another reform in 2025. At the same time, a higher dividend tax rate was associated with a progressive rise in profit retention, which implies an adjustment towards improving the financial sustainability. This study adopts a forensic accounting perspective, that's interpretive but is not to be operationalised through a separate empirical model - seeking to point out how fiscal shocks can reshape both the financial incentives and reporting dynamics themselves. This paper makes a contribution to the literature by linking dividend taxation and sustainability considerations within the context of an emerging capital market - while showing some practical implications for policymakers, investors and accounting professionals regarding the interpretation of payout decisions and expected behavioural responses to future tax policy changes.