The tax year for CIT purposes is the calendar year. For new business entities, the fiscal year is considered the period beginning with the registration date until the end of the calendar year. Taxpayers have the right to choose a tax period different from the calendar one, subject to specific conditions.
For WHT and VAT purposes, the fiscal period is the calendar month starting the first day of the month. The VAT period for non-residents providing services through electronic networks to Moldovan resident individuals (B2C transactions) is the calendar quarter.
An annual CIT return must be submitted to the MTA by the 25th day of the third month following the end of the tax period.
WHT and payroll liabilities must be declared and settled monthly, no later than the 25th day of the month following the reporting one.
Farming enterprises and individual entrepreneurs with an annual average number of employees not exceeding three and not registered as VAT payers must submit a unified annual tax return, provided certain conditions are met.
As of 1 January 2023, all taxpayers (except individuals) will be required to submit tax reports using automated electronic reporting methods.
Adjusted tax returns
Taxpayers who discover that the tax return previously submitted contains an error are able to submit an adjusted tax return, provided that no written decision was issued by the tax authority in order to initiate a tax audit and the related tax period is not covered by a tax control.
Late interest payments will not be applicable in amounts higher than the tax liability resulting from the adjusted tax return submitted, and no fines will be applicable if the tax duties are paid before the announcement of a tax audit.
Companies that have miscalculated the taxes, and this was not detected in the previous tax audit, are absolved from fines and late interest payments for violations identified within the repeated tax audit.
Payment of tax
Taxpayers must declare and pay the applicable CIT by the 25th day of the third month following the end of tax period. Taxpayers are also required to pay interim CIT, no later than the 25th day of each three months of the current tax period, amounts equal to 25% of either the total estimated value of the CIT due for the current fiscal period or the total value of the calculated CIT for the previous fiscal period.
Enterprises classified as micro, small or medium, according to the criteria determined on the last day of the tax period according to the provisions of Law no. 179/2016, can pay the calculated corporate income tax until the twenty-fifth day of the month following that in which dividends were paid, including in the form of stocks or shares, from the profit obtained in the tax periods 2023-2025 inclusive. The amount of corporate income tax to be paid is determined by applying the pro rata between the amount of corporate income tax calculated for the tax period and the taxable income for the respective tax period. The calculated corporate income tax should be paid by the 25th day of the month following that in which the dividends were paid.
Fines and penalties
Among the most important fines and sanctions for non-compliance with applicable tax law, the following are worth mentioning:
- The fine for the performance by the taxpayer of an economic activity with the issuance of a bill without using the existing cash register is from MDL 5,000 to MDL 15,000 (other fines might also be applied for non-compliance with rules related to use of cash registers).
- The fine for the failure to provide the VAT invoice in accordance with the tax law is from MDL 3,000 to MDL 3,600 for each VAT invoice but capped to MDL 72,000.
- The fine for hindering the execution of a tax audit by not providing access to production, storage, commercial, or other facilities is from MDL 4,000 to MDL 6,000.
- The fine for utilisation of blanks with special regime other than those permitted by legislation is between 25% to 30% from the transaction amount.
- The fine for reducing taxes, SSC and health insurance contributions by presenting tax returns containing incorrect data is between 20% to 30% of the reduced amount.
- The fine for evasion from payment of taxes, SSC and health insurance contributions is between 80% and 100% of the related amount.
- The fine for failure to comply with rules concerning the filling in and submission of tax returns is between MDL 500 to MDL 1,000 for each tax return, but not more than MDL 10,000.
- In case of diminishing the taxable income declared by a taxpayer which applied the 0% CIT rate during the period 2023-2025, a fine ranging from 12% to 15% of the undeclared/diminished taxable income is applied.
Fines for infringement of the transfer pricing regulations (applicable as of 1 January 2024):
- Late presentation of the information on related-party transactions is sanctioned with a fine of MDL 30,000 to MDL 50,000 (approx. USD 1,500 to USD 2,600).
- Presentation of incorrect information on related-party transactions (similar to a tax return) that led to the reduction or avoidance of tax obligations is sanctioned with a fine of MDL 150,000 to MDL 200,000 (approx. USD 7,800 to USD 10,400).
- Failure to present the information on related-party transactions is sanctioned with a fine of MDL 300,000 to MDL 500,000 (approx. USD 15,600 to USD 26,000).
- Late presentation of the transfer pricing file is sanctioned with a fine of MDL 30,000 to MDL 50,000 (approx. USD 1,500 to USD 2,600).
- Presentation of the transfer pricing file with incorrect information is sanctioned with a fine of MDL 150,000 to MDL 200,000 (approx. USD 7,800 to USD 10,400).
- Failure to present the transfer pricing file is sanctioned with a fine of MDL 300,000 to MDL 500,000 (approx. USD 15,600 to USD 26,000).
Taxpayers who settle amounts as assessed by the MTA within three business days and have no other outstanding liabilities may benefit from a 50% reduction of the fines applied by the tax authorities.
In addition, certain special provisions regarding tax evasion apply. The term 'tax evasion' is defined under Moldovan criminal law as diminishing the tax liabilities by more than 50 medium forecasted salaries (MDL 585,000 in 2023) by means of including in accounting, tax, or financial documents deliberately distorted data on income or expenses or by hiding other objects of taxation. According to the Moldovan Criminal Code, legal entities can be punished for tax evasion with a fine up to MDL 400,000 and preclusion from performing certain activities. In case the amount of diminished tax liabilities exceeds 100 medium forecasted salaries (MDL 1,170,000 in 2023), legal entities can be punished for tax evasion with a fine up to MDL 800,000 and preclusion from performing certain activities or winding-up.
As of 15 April 2022, the amount of infringement considered insignificant and not triggering fines and penalties has been increased from MDL 100 to MDL 500 for individuals and from MDL 1,000 to MDL 5,000 for legal entities.
Tax audit process
The rules governing the tax audit process are stated in the Tax Code. Generally, the tax audit duration and frequency depend on its type. For instance, a tax audit performed at the taxpayer premises should not exceed two months (with some exceptions) and should be performed no more than once per year for the same taxes and duties, except for specific circumstances provided by law.
Also, a tax audit can be performed on a more frequent basis within certain specific circumstances (e.g. refund of VAT and other taxes, reorganisation).
A repeated tax audit for already audited periods can be performed in a number of cases, for instance:
- If the results of previous controls are inconclusive, incomplete, or not satisfactory.
- If certain circumstances are identified that attest to the existence of tax infringements.
- In the event of reorganisation or liquidation.
The anti-abuse rule comes into force on 1 January 2024. In this regard, for determining the taxpayer's fiscal obligations, the state tax service will not take into account or reclassify a transaction, action or series of transactions or actions that, when considering all the relevant facts and circumstances, reflect a different situation or economic content than the one claimed by the taxpayer and is being undertaken with the aim of obtaining a fiscal advantage.
Statute of limitations
Under the general tax rule, the Moldovan tax authorities can assess tax liabilities no later than four years after the last date established for the submission of the relevant tax report or for the settlement of that tax liability (if submission of the tax report is not required). This limitation term does not apply in case of tax-related crimes or non-submitting of the corresponding tax returns.
Topics of focus for tax authorities
There are no specific topics of focus for the tax authorities. Generally, it depends on the nature of the taxpayer and the specifics of the activity it performs. The main criterion for selection of a company to be subject to a tax audit is a risk based one.
In addition, tax authorities are currently focused on promoting voluntary compliance of the taxpayers.
Starting with 2017, the concept of advanced binding ruling has been introduced in the Moldovan tax law.
The binding ruling under the Moldova tax law represents an administrative act issued by the state tax service college in order to solve claims submitted by individuals and legal entities that perform entrepreneurial activity, regarding the applicability of the tax legislation on the future specific situations and/or transactions. The anticipated individual tax ruling is mandatory for MTA and other entities with tax administration attributions, provided certain conditions are met. The procedure of issuing and rejecting of advanced binding rulings is determined by the government.
The law also provides for the possibility of obtaining comfort letters. Taxpayers that inadequately computed tax liabilities due to incorrect written explanations issued by the MTA may not be subject to sanctions (i.e. fines and late-payment penalties). Tax liabilities may still be recomputed by the MTA. Written explanations are issued by the MTA free of charge and may remain valid for an indefinite period of time, unless cancelled by new legislation or other rulings. Such explanations are generally issued by the Moldovan competent authorities during a period of up to one month.