Corporate - Deductions

Last reviewed - 17 January 2024

As a general rule, expenses incurred by a company are deductible for CIT purposes only if they are deemed as ordinary and necessary, aimed at deriving taxable income, and justified with adequate supporting documentation.

The rate of deductible expenses for business purposes (ordinary and necessary) that are not adequately supported by necessary documentation is 0.2% from taxable income.

Depreciation and amortisation

As of 1 January 2023, the threshold value of fixed assets recognised for tax purposes was increased from MDL 6,000 to MDL 12,000.

For entities that apply the International Financial Reporting Standards (IFRS), the calculation and deduction of depreciation related to the right to use fixed assets that are the subject of an operational leasing contract is performed by the lessee. 

Large enterprises (except companies that carry out financial and insurance services) can use the accelerated depreciation method for the first year of putting the fixed asset into operation.

The amount of amortisation of the fixed asset to be deducted is determined as follows:

  • For the first year of use, the amortisation cannot exceed 50% of the input cost of the fixed asset.
  • For the following years of use, the amortisation is calculated by dividing the unamortised value of the fixed assets by the number of years remaining in its useful life.

Intangible assets are subject to CIT amortisation according to the straight-line method.


According to the National Accounting Standards, goodwill is recognised as an intangible asset. However, the Moldovan Tax Code does not expressly provide for specific rules regarding CIT deduction.

Start-up expenses

According to the National Accounting Standards, start-up expenses incurred by companies (e.g. stamp taxes paid upon company registration, drawing up of registration documents, manufacture of stamp) are not recognised as an intangible asset. Therefore, such expenses are to be treated as current expenses.

Interest expenses

Different CIT deductibility rules apply for interest on loans used for carrying out operational activities and for loans used for investment activities performed on an occasional basis.

As a general rule, deductions for interest expenses are allowed for CIT purposes, provided such expenses are deemed as ordinary and necessary for carrying out the activities of the business. Expenses should also be incurred for the purposes of obtaining taxable income and justified by adequate backup documentation.

If the interest paid by a Moldovan company relates to its operational or day-to-day activities, the related expenses are deductible for CIT purposes, taking into account the following:

  • Interest expenses incurred by businesses, based on loan agreements, for the benefit of individuals and legal entities (except financial institutions, micro-financing organisations, and leasing companies) are deductible for CIT purposes within a specific limit established by law. Specifically, such interest expenses are deductible up to the limit of the average weighted interest rate on credit loans offered by banks to legal entities, depending on the period of the loan and its currency (e.g. different limits are applied for loans in Moldovan lei and those in foreign currency).
  • If the loan is obtained for the purpose of acquiring/building fixed assets, the related interest expense should be capitalised to the initial fiscal value of such assets until they are put into exploitation. The deductibility of such interest expense is capped at the above limit. The excess difference is treated as a non-deductible expense for CIT purposes.

If interest relates to an investment activity, the interest expense is deductible for CIT purposes within the limit of the income derived from the investment.

Bad debt

Bad debts are deductible for CIT purposes, provided certain conditions are fulfilled and justifying documents are made available. Deduction of bad debts up to MDL 1,000, for which the statute of limitation has exceeded three years, is allowed.

Charitable contributions

Charity and sponsorship expenses are deductible for CIT purposes if borne for the benefit of public authorities and public institutions financed from the state budget, as well as non-profit organisations and family-type foster homes within certain conditions, at up to 5% of taxable income.

Fines and penalties

Fines and penalties related to CIT, related to other taxes and due payments to the state budget, or for violations of legal acts are not deductible for CIT purposes.


CIT is not deductible for CIT purposes.

Other taxes are generally deductible for CIT purposes, except those paid on behalf of another person.

Other significant items

Among others, the following expenses are also generally deductible for CIT purposes:

  • Research and development (R&D) expenses incurred during the fiscal year as current expenses, should certain conditions be met.
  • Business trip expenses, protocol expenses, and expenses on insurance of business entities, within the limits approved by the government.
  • Waste, spoilage, and perishability expenses, within the threshold approved by the company’s manager.
  • Leasing companies are allowed to deduct provisions to cover claims related to non-recovery of lease rates and interest rates up to specific limits established by legislation and provided certain conditions are met.
  • Financial institutions are allowed to deduct loss loan provisions of assets and conditional commitments calculated according to International Financial Reporting Standards (IFRS).
  • Micro-finance organisations are allowed to deduct loss loan provisions calculated according to requirements established by the National Bank of Moldova.
  • Taxpayers are allowed to deduct the expenses incurred in relation to benefits in kind granted to their employees if such benefits have been subject to payroll taxes.
  • Payments performed by the employers in relation to testing of the employees for COVID-19 and vaccination of employees against COVID-19 are fully deductible for CIT purposes.
  • Membership fees paid for the benefit of foundations or other business associations are permitted for deduction within the limit of 0.15% from the remuneration fund.
  • Starting 1 January 2022, membership fees for irrigation water user associations are fully deductible.
  • Starting 17 June 2022, expenses not adequately supported by necessary documentation are fully allowed for deduction provided they are ordinary and necessary and have been paid through business card.

Starting with 1 January 2024, the following additional deductions are allowed:

  • The value of gifts in kind, including vouchers given to employees and their minor children on the occasion of non-working holidays according to the Labour Code and on employee birthdays, of which the amount does not exceed 10% of the national average monthly salary, as per the government-approved forecast.
  • Employee training, other than that permitted by law, and activities related to strengthening corporate culture and team spirit.
  • Subscriptions for the use of sports facilities for the practice of sports and physical education for maintenance, prophylactic, or therapeutic purposes offered by the providers of sports clubs and fitness centres, in an amount of up to 50% of the national average monthly salary, as per the government-approved forecast.
  • The contracting of medical services in an amount of the national average monthly salary, as per the government-approved forecast.
  • Payments of expenses incurred and determined for the transport of and food for trainees and/or students, up to the limit determined by the government.
  • The costs of employees’ supplementary health insurance in the amount of the national average monthly salary, as per the government-approved forecast, for each employee.
  • The amounts of payments made on behalf of employees for the purpose of compensating the costs of childcare services for their children up to the age of three, without exceeding MDL 2,500 per month for each child.

Non-deductible expenses

Among others, the following expenses are generally not deductible for CIT purposes:

  • Expenses not adequately supported by necessary documentation that exceed the 0.2% rate as mentioned above.
  • Provisions and accruals, except for financial institutions, micro-finance organisations, and leasing companies as mentioned above.
  • Losses incurred from transactions between affiliated parties. Losses from transactions between related parties being considered the positive result of the difference between the total annual amount of the cost of sales and the total sale revenue booked throughout the fiscal year in dealing with a related party.

Fiscal losses

Fiscal losses may only be carried forward for five consecutive years following the year the losses were incurred, provided the company records taxable income. If the company recorded fiscal losses for more than one year, such losses are carried forward in the order in which they arose. Fiscal losses are recorded on off-balance-sheet accounts.

Losses may not be carried back.

Payments to foreign affiliates

A Moldovan legal entity generally may deduct expenses related to payments to foreign affiliates to the extent that these amounts were actually paid and are not in excess of what it would have paid to an unrelated entity (i.e. arm’s length). However, the payer is required to hold documentary evidence for the actually performed transactions. Certain types of expenses may follow general rules of deductibility that would limit their amount (e.g. interest expenses on loan agreements).