Resident legal entities are taxed on their worldwide income, while non-resident entities are taxed on their Moldovan-sourced income. Taxable income is computed as accounting profit adjusted in accordance with tax legislation.
Under the National Accounting Standards, the following inventory valuation methods are mandatory: specific identification, first in first out (FIFO), last in first out (LIFO), and weighted average cost.
Assets are generally valued at their acquisition cost, production cost, or market value.
Transactions with capital assets performed by the companies are subject to general taxation rules.
Starting 1 January 2021, dividends paid by Moldovan legal entities to other Moldovan legal entities from profit earned since 2012 do not represent taxable income.
Distribution of dividends from profit earned during the period between 2008 and 2011 are subject to final WHT of 15%.
Dividends received by Moldovan legal entities from foreign legal entities are included in taxable income and taxed according to general established rules. According to Moldovan legislation, the beneficiary of such dividends is entitled to a credit for the tax paid in the foreign country, within certain limits.
In general, the interest income derived by legal entities is included in the total taxable amount and taxed at the applicable 12% CIT rate.
Royalties are defined as payments of any kind received in consideration for the use of, or the right to use, any copyright and/or ancillary right of a literary, artistic, or scientific work, including moving pictures, patent, trademark, design or model, plan, software, secret formula or process, or for information concerning industrial, commercial, or scientific expertise.
The following specific types of payments are not considered royalty under the Moldovan tax law:
- Payments for software purchase, intended solely for the operation of that software, including its installation, deployment, storage, customisation, or updating.
- Payments for the full acquisition of a software copyright or a limited right to copy it solely for the purpose of its use by the user or for the purpose of selling it under a distribution contract.
- Payments for obtaining the rights to distribute a product or service without giving the right to reproduction.
- Payments for access to satellites through the hiring of transponders or the use of cables or pipelines for the transport of energy, gas, or oil, where the customer is not in possession of transponders, cables, pipes, fibre optics, or similar technologies.
- Payments for the use of electronic communications services in roaming agreements, radio frequencies, and electronic communications between operators.
In general, royalties derived by legal entities are included in the total taxable amount and taxed at the applicable 12% CIT rate.
Exchange gains and losses
Revenues obtained from foreign exchange differences are included in taxable income. Foreign exchange losses are CIT deductible in the period they are incurred.
Moldovan tax law provides for the following main types of non-taxable revenues:
- Contributions to the capital of an entity.
- Income earned while benefiting from income tax incentives.
- Money received from special funds in the form of grants from government-approved programmes.
- Income from revaluation of fixed and other assets and from reversing impairment losses on depreciation of fixed and other assets.
- Income from reversal or recovery of expenses and reversal of accruals that have not been previously deducted for tax purposes.
- Income obtained under international projects and grants that contribute to the long-term development of education and research.
Starting with 2024, the composition of non-taxable sources of income has also been completed with:
- 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.
- income obtained by individuals from the disposal of iron and non-iron waste, industrial residues containing metals or alloys and returnable packaging.
Resident legal entities are taxed on their worldwide income. The legal entities, under certain conditions, can benefit from tax credits provided under a double tax treaty (DTT) or can apply for unilateral tax credits against income tax paid in any foreign country if this income is subject to taxation in Moldova. Such tax credit shall not exceed the amount that would have been estimated at the CIT rate applicable in the given tax period. Otherwise, there is no specific tax deferral regime.