Moldova

Corporate - Group taxation

Last reviewed - 01 July 2021

Moldovan tax law does not provide for group taxation.

Transfer pricing

Currently, transfer pricing regulations in Moldova are at an initial development stage. Formal transfer pricing documentation requirements might be introduced in the Moldovan tax law in the near future.

Moldova is currently not an Organisation for Economic Co-operation and Development (OECD) member country, and the domestic law does not provide for any reference to the possibility of applying the OECD Transfer Pricing Guidelines.

As a general rule, under Moldovan tax provisions, transactions concluded between related persons are taken into consideration only if the interdependence of these persons does not influence the outcome of the transaction. The arm’s-length principle applies to transactions with both resident and non-resident related parties.

With reference to the transactions carried out by Moldovan companies with related parties, Moldovan tax law provides the following specific provisions:

  • No deduction is allowed for losses incurred on the sale or exchange of property, performance of work, or supply of services between related parties, carried out either directly or through intermediaries (regardless of whether the transaction price corresponds to the market value).
  • No deduction is allowed for expenses incurred in relation to related parties if no justification is available for payments and if such expenses do not represent necessary and ordinary business expenses.

In accordance with Moldovan tax law, a company is considered the taxpayer’s related party if one of the following conditions exists:

  • The company controls the taxpayer.
  • The company is controlled by the taxpayer.
  • Both the company and the taxpayer are under common control of a third party.

From a tax perspective, control is the ownership (either directly or through one or more related persons) of 50% or more in value of the capital or voting power of one of the companies. For this purpose, an individual will be treated as owning all equity interest that is directly or indirectly owned by members of one’s family.

Thin capitalisation

Moldovan tax law does not provide for a specific thin capitalisation regime.

The deductibility of interest expenses follows the deductibility regime as described under Interest expenses in the Deductions section.

Controlled foreign companies (CFCs)

Moldovan tax law does not contain CFC provisions.