Moldova

Corporate - Other taxes

Last reviewed - 14 February 2020

Value-added tax (VAT)

The standard VAT rate in Moldova is currently 20%. It is generally applied to local supplies of goods and services, as well as to import of goods and services through a reverse-charge mechanism.

Apart from the above, certain types of supplies are subject to reduced VAT rates. For instance, local supplies of bread and bakery products; milk and dairy products; transport and distribution of natural gases services; biofuels used for electricity, heating, and hot water production; and specific phytotechnical, horticultural, and zootechnical products are subject to the reduced 8% VAT rate.

During 1 October 2018 – 31 December 2019, the 10% VAT rate applied for accommodation services, food, and beverages supplied by entities that provide public accommodation and catering services. As of 1 January 2020, the standard VAT rate of 20% shall apply for such services.

Starting 1 January 2020, the reverse charge mechanism will apply for supply of goods by insolvent economic operators. Thus,  buyers will be required to calculate and pay to the state budget the related VAT amounts on purchased goods.

Starting with 1 April 2020, foreign supplies of digital services to Moldova-based individuals (B2C transactions) will be taxed with a 20% VAT in Moldova. A number of supplies are VAT exempted with deduction right, including international transportation and exports of goods or services. Certain supplies are VAT exempted without deduction right.

Input VAT

Input VAT incurred on acquisitions of goods and/or services may be deducted, provided it is incurred by a VAT-registered payer to perform VATable supplies within its business activity.

If input VAT relates to acquisitions destined to perform mixed supplies (i.e. both VATable and VAT-exempt ones), the input VAT deduction right is allowed on a pro-rata basis.

VAT refunds

Should a company register a deductible input VAT exceeding its output VAT, this balance can be partially refunded only if the company carries out a specific range of business activities (e.g. export supplies, international transportation services, production of bakery and dairy products, leasing activity). Otherwise, such VAT amount may be carried forward to the following months, offset against the company's future output VAT liabilities.

Additionally, VAT payers performing capital investments in Moldova may be entitled to refund the recoverable VAT related to these kinds of capital investments, provided such assets are used for product manufacture, service supply, and execution of works.

The possibility to offset the VAT against future obligations to the national public budget is also available, at the request of taxpayers not having debts to the national public budget.

VAT administration

A company is required to register for VAT purposes if the total turnover within the last 12 consecutive months reached the threshold of MDL 1.2 million. Also, companies can follow voluntary registration for VAT purposes if they only intend to perform taxable supplies.

All VAT payers registered for VAT purposes must submit electronic tax returns. VAT liabilities must be declared and settled monthly no later than the 25th day of the month following the reporting one.

Non-resident legal entities providing services through electronic networks to Moldovan resident individuals or through which payment for services is made, will be required to follow a simplified registration procedure within the electronic system of the State Tax Service. Subsequently, they will calculate, report and pay by the 25th of the month following each quarter, the related VAT amounts.

Generally, taxpayers are required to issue VAT invoices for the performed supplies, as well as to keep detailed records of their acquisitions and supplies in the correspondent VAT ledgers, according to a set of specific rules.

Until 31 December 2019, all companies registered as VAT payers have been required to register their VAT invoices exceeding MDL 100,000 in the general electronic register of VAT invoices within ten working days from the date of issuing (with some specific exceptions). Starting 1 January 2020, this obligation has been excluded.

Customs duties

Moldova’s current customs framework is regulated by the Customs Code, Law on Customs Tariff, International Agreements concluded by Moldova to date, and by other legal acts.

Customs duties include customs procedural taxes, customs taxes, VAT, and excise duties. In general, any kind of goods and means of transport may enter and leave the territory of Moldova without any restriction. However, certain limitations specifically provided by the legislation are in force, which cover goods and means of transport crossing the border by breaching state security, public order, environment, etc.

Customs regimes

Definitive and suspensive customs regimes are provided under Moldovan law.

Definitive customs regimes refer to import and export, while suspensive customs regimes comprise transit, bonded warehouse, inward processing relief (with suspension), processing under customs control, temporary admission, and outward processing relief.

Customs valuation

Under Moldovan customs legislation, the customs valuation is generally performed in accordance with the customs valuation principles in the General Agreement on Tariffs and Trade (GATT).

The customs value is determined based on one of the six provided valuation methods (i.e. transaction value, transaction value of identical goods, transaction value of similar goods, deductive value, computed value, and reserve method). If the first method is not applicable, then the second method should be applied and so forth.

Preferential tariff treatment

Moldova has concluded free trade arrangements (FTAs) to date with most of the Commonwealth of Independent States (CIS) countries and is also a Central European Free Trade Agreement (CEFTA) contracting state. A preferential tariff treatment is granted for specific categories of goods, depending on their origin and in accordance with the FTAs to which Moldova is a party.

Also, further to the Association Agreement with the European Union (EU), the customs duties on goods originating in the other party are eliminated. The origin of goods can be proven with an EUR.1 movement certificate or an origin declaration.

Customs duties applicable on imports performed in the Republic of Moldova are eliminated, except for products free of customs duties within the limits of the tariff quotas. In case these limits are exceeded, the most-favoured-nation customs duty rate shall apply.

Customs duties applicable on imports performed from the European Union are eliminated, except for the following products:

  • Products free of customs duties within the limits of the tariff quotas. In case these limits are exceeded, the most-favoured-nation customs duty rate shall apply.
  • Products subject to entry price for which the ad valorem component of the import duty is exempted.
  • Products subject to the anti-circumvention mechanism.

Elimination of the customs duties on some specific categories of goods will be gradually made.

Favourable tariff treatment

  • A favourable tariff treatment presumes a reduction or an exemption from customs duty upon import of specific goods into Moldova, depending on their type or final destination, according to domestic customs law or international agreements to which Moldova is a party.

    Moldovan customs law provides the following exemptions, among others, from customs duty:

    • Goods imported by individuals for personal use, not exceeding a specific threshold.
    • Goods released in Moldova under transit, bonded warehouse, or inward processing relief regimes.
    • Moldovan goods previously exported and released back within a three-year term in the same status, as well as compensatory products obtained under outward processing relief.
    • Certain movable goods imported by legal entities carrying out leasing activities for the purpose of paying off their contractual liabilities derived from lease agreements concluded with Moldovan individuals or legal entities.
    • Goods imported by legal entities for non-commercial purposes whose customs value does not exceed 100 euros (EUR).
    • Samples of goods with customs value not exceeding EUR 22 for one import operation.
    • Aircraft, helicopters, locomotives, multiple units for railways providing public transportation of passengers, and parts thereof (only certain tariff headings as provided by law).
    Certain vehicles imported free of charge (donation), regardless of the exploitation term, for certain special purposes.

Customs administration

Moldovan customs legislation provides for:

  • the concepts and procedures of post clearance audit
  • the obligation of individuals and companies to maintain the necessary documents for customs control for at least five years, and
  • the obligation of individuals and companies that perform external trade transactions to maintain the related documents for the purposes of post clearance audit for at least four years.

The Customs Service of Moldova uses procedures for issuing binding tariff and binding origin information. Additionally, companies may use the electronic procedure of customs clearance for the export of goods, as well as specific simplified customs procedures.

Excise duties

Excise duties apply to the production and import of cars, tobacco, alcohol, petrol and lubricants, and other goods. Special excise rates for each type of excisable goods are established in the tax code. The rates are widely variable and are based on multiple factors. The excise duty rates are generally established as a percentage applied to the value of goods or as a fixed amount for a certain quantity of excisable goods. However, for specific types of excisable duties, mixed excise duty rates are applicable.

The following are subject to excise duties, unless there is a specific exemption provided:

  • Any individual or legal entity producing and/or processing excisable goods on the territory of Moldova.
  • Any individual or legal entity importing excisable goods.

Businesses or individuals that produce and/or process excisable goods on the territory of Moldova (or intend to do so) must possess excise duty certificates, which must be granted by the tax authorities before these operations are actually carried out. It is mandatory for individuals or businesses, upon submitting the relevant applications to the tax authorities, to attach the details of the excise premises.

Under certain circumstances, excise duty exemptions may apply. Some excise-liable goods are subject to mandatory excise stamp marking and labelling.

Tax on immovable property

Tax on immovable property is a local tax paid on real estate (i.e. land and/or construction on the land) by the property owner or owner of material rights. Residents and non-residents owning real estate located in the territory of Moldova have similar obligations.

The 0.3% rate on immovable property used for entrepreneurial activity is applied either on the property's estimated value (if such exists) or on its book value, while the maximum tax rate on property used for agricultural activities is 0.1% of the property's book value.

Separate rates are applicable for agricultural land with construction buildings on it.

Starting with 1 January 2020, tax on immovable property is paid by the 25 September for property owned before 25 September. For property acquired after 25 September, the tax is paid by 25 March of the following year. Previously, the tax was paid in equal instalments on 15 August and 15 October for property owned before 25 June. For property acquired after 25 June, the tax was paid by 25 March of the following year.

Companies and individual entrepreneurs who own immovable property will be obligated to declare the immovable property tax by 25 September of the current fiscal period.

In the event of an owner change during the fiscal year, the previous owner may request recalculation of the real estate tax in proportion to the period in which they were subject to taxation.

Transfer duties

Transfer duties may be applied for notary acts performed by authorised notaries and other persons empowered by law. Transfer duties are applied upon authentication by a notary of sale-purchase agreements regarding plots of land; transfers of houses into private property; alienation agreements of houses, apartments, garages, and other constructions; authentication of mortgage agreements; and other evaluative contracts.

Stamp duties

  • According to the law on state duty, stamp duty (state duty) is the amount charged by specifically authorised state bodies from individuals and legal entities for the exercise of certain actions or issuance of legal documents of interest to them.

    Stamp duties may be applied for, but not limited to, the following:

    • Claims submitted to courts of justice.
    • Registration of civil status documents.
    • Issuance of passports to Moldovan citizens and other related documentation.
    • Residence registration.
    • Redemption of goods from the state.
    • Registration of mortgage, for issue of extracts from the Real Estate Register.
    • Notary acts (i.e. for notarisation of sale-purchase agreements of immovable assets).
    Application of the apostil.

Payroll taxes

Salaries and other remunerations provided by an employer to its employees are subject to PIT. Thus, an employer is liable to withhold the 12% PIT rate from the income from employment, including benefits in kind.

Also, there are available deductions, each resident taxpayer being allowed to claim annual allowances. In 2020, allowances are set in the following amounts:

Type of allowance Amount of the allowance (MDL)
Personal allowance 24,000
Spouse’s exemption (1) 11,280
Major personal allowance (2) 30,000
Allowances for dependant (3) 3,000

Notes

  1. Individuals may opt for this allowance provided the spouse does not use it in the period concerned.
  2. Individuals can opt for this if certain conditions are fulfilled.
  3. For dependants with severe disabilities since childhood, individual Moldovan residents are entitled to allowance in the amount of MDL 18,000.

All payroll taxes are reported through a unified payroll tax return by the 25th day of the month following the reporting one.

Social Security Contributions (SSC)

Starting with 1 October 2018, the standard rate of SSC for employers represent 18% of their employees' gross salary and other recompense. During the period from 1 January 2018 to 30 September 2018, SSC represented 23% of employees' gross salary and other recompense. For some specific sectors (public, aviation, agriculture), other rates are applicable.

See the Other taxes section in the Individual tax summary for more information.

Employee’s individual contribution represent 6% of their gross salary and other recompense. The legislation provides an annual fixed SSC for other categories of taxpayers in an amount approved for each year (e.g. MDL 10,740 applicable for 2020).

Meal tickets granted to employees will be subject to social security contributions due by both employer and the employee.

Companies report their SSC liabilities on a monthly basis (with certain exceptions) through the unique payroll tax return. The SSC due by both employer and employee must be transferred by the employer to the budget no later than the 25th day of the month following the reporting one.

Health insurance contributions

The mandatory health insurance contribution, computed as a percentage of wages and other remuneration, is established at 4.5% for each payer category (employers and employees). The legislation also provides for an annual fixed amount of health insurance contribution paid by other categories of taxpayers in an amount approved for each year (e.g. MDL 4,056 applicable in 2020).

The mandatory health insurance contributions are declared on a monthly basis through the unique payroll tax return. The mandatory health insurance contribution due by both employer and employee must be transferred to the budget by the 25th day of the month following the moment of payment of salary and other remunerations.

Environmental pollution payments

Payments for environmental pollution are administered by the MTA. Subject to these payments are producers, importers, and/or purchasers of the specific types of goods that, during their usage, produces pollutants.

Companies should generally submit reports on environmental pollution payments on a monthly basis. The environmental pollution payments due by a company must be transferred to the budget no later than the 25th day of the month following the reporting one.

Road taxes

Road taxes are fees collected for the use of roads and/or protection zones of the roads outside the locality limits.

The system of road taxes includes the following:

  • Tax for the use of roads by vehicles registered in Moldova.
  • Tax for the use of roads of Moldova by vehicles not registered in Moldova (vignette).
  • Tax for the use of roads by the vehicles with total mass, axle loads, or dimensions exceeding the admitted limits.
  • Tax for the use of road protection zones outside the localities for carrying out construction or installation works.
  • Tax for the use of road protection zones outside the locality limits for placing outdoor advertisements.
  • Tax for the use of road protection zones outside the locality limits for placing roadside service objects.

Depending on the type of road tax, the tax law establishes the taxable person, deadlines for payment of the road tax, tax rates, exemptions (e.g. a legal entity or an individual shall pay road tax on vehicles registered in Moldova (i) on the date of state registration of vehicle or (ii) on the date of the vehicle inspection/annual technical testing of the vehicle).

Road tax rates for the use of roads by vehicles registered in Moldova vary depending on the type of vehicle and its specific characteristics (engine capacity, weight, etc.).

The fixed tax rates for vignette vary from EUR 4 to EUR 85, depending on the period the vehicle stays in the territory of Moldova.

Taxes on the natural resources

The usage of the following natural resources is subject to taxes:

    • Water.
    • Mineral exploration.
    • Geological exploration.
    • Mining operations.
    • Usage of underground areas for the construction of underground structures not related to mining operations.
    • Exploitation of underground structures within the performance of entrepreneurial activity, not related to mining operations.
    • Standing wood.

Companies using natural resources will calculate, report and pay by the 25th of the month following which quarter, with some exceptions, specific amounts of the taxes.

As of 1 January 2020, the list of subjects required to calculate and pay the tax on water has been extended. Thus, the entities that extract or use drinking or mineral water for bottling purposes will be required to calculate and pay the water tax.

Local taxes and duties

Local taxation in Moldova refers to the application of the following main types of taxes and duties:

  • Duty for the right to perform local auctions and lotteries.
  • Tax on advertising placement and tax on advertising devices.
  • Fee for the right to use local symbols.
  • Land improvement duty.
  • Tax for commercial and/or services providing units.
  • Parking tax.
  • Hotel room occupancy tax.
  • Resort fee.

Generally, local authorities are authorised to decide the type of local taxes to be applied and the level of tax rates for each local tax.