Moldova

Employment income

Employee gross income includes basic pay, overtime pay, supplementary pay, awards and bonuses, compensation from unused holiday or vacation time, compensation for dismissal, as well as benefits in kind (e.g. housing allowances, compensation for school fees, food, and personal travel expenses).

Mandate relationships between the legal entity and the administrator will be recognised for tax purposes as employment relationships and taxed similarly to salary.

Income obtained by individuals is taxed on a cash basis. Individuals are entitled to certain deductions and exemptions from their taxable income.

Moldovan tax law provides for special rules (i.e. tax exemption) regarding the income obtained by members of diplomatic missions, and other missions accredited as such, and their personnel.

Capital gains

There is no separate capital gains tax (CGT). Capital gains in the case of private individuals are equal to 50% of the difference between the sale price and the purchase price (i.e. including all costs related to the acquisition of capital assets) and have to be included in the gross income of the individual for the year when the income is obtained.

In addition, under certain conditions, capital gains derived from the sale of a permanent abode are non-taxable.

New provisions on capital gains entered into force on 1 January 2023.

• Income or losses from the sale of a vehicle (except vintage vehicles of historical or ethnographic interest) that was in the seller’s possession for at least three years prior to the date of sale are not recognised for tax purposes.
• The increase or loss of capital resulting from the sale, exchange, or other forms of transfer of common property is determined by one of the owners (co-owners), based on the joint written agreement, as the difference between the amount received and the value base of the assets.

Starting with January 2024, capital gain or loss will not be recognised in the case of:

• Redistribution (transmission) of property between spouses or former spouses if this results from the need to divide the mutual property in the event of divorce.
• Redemption and/or exchange of debt securities and bonds by their issuers.
• Redemption and/or exchange of government securities by the Ministry of Finance or primary dealers in accordance with the law.
• The exercising of the right, as provided for in the option, to buy or sell equity assets and/or convert options.

As of 01 January 2025, in case of transactions involving shares acquired at a preferential price or for free under a stock option plan, the capital gain or loss is calculated as the difference between the sales price (the amount received or income obtained) and the shares' basis value.

Other taxable income

The following sources of income are also taxable, subject to specific rules:

• Income from any professional or entrepreneurial activity.
• Income of shareholders of investment funds.
• Rental fees.
• Interest, dividends, royalties, and annuities (except social security benefits and benefits received on the basis of interstate agreements).
• Investment or financial income from abroad (e.g. dividends, interests, royalties, and rent payments received from non-residents).
• Income received from gambling.
• Winnings from lotteries and sport bets in the amount of each earning exceeding 1% of the personal allowance (i.e. MDL 297).
• Income from the withdrawn amount from the share equity related to previously increased share equity upon distribution of the net profit and/or other sources recorded in the owners' equity between shareholders (associates) according to the participation share in the equity starting for the fiscal periods 2010/11.
• Interest received on deposits with Moldovan banks, securities, as well as deposits of the members in the accounts of the associates.
• Other types of income that are not expressly tax exempt.

Tax-exempt income

Moldovan tax law provides for the following main exempted sources of income:

• Sickness allowances.
• Dividends received by resident individuals, not performing entrepreneurial activity, from a resident business, for fiscal periods up to 1 January 2008.
• Property received as donation or inherited by individual Moldovan citizens.
• Capital gain or loss resulted from a donation agreement between first-degree relatives.
• Compensation for moral damage.
• Income obtained from selling the permanent abode. The permanent abode represents a property that taxpayer had owned for at least three years and has been the domicile during the three years up to the sale.
• Reimbursement of business trip expenses within the limits provided by law.
• Payments made by the employer for employee testing for COVID-19 and vaccination against COVID-19.

• The allowance for increasing access to quality education, provided by the Education Code, in the amount and manner established by the government, will also be considered non-taxable.

Starting 2024 onwards, the following incomes obtained by individuals are considered non-taxable:

• The value of gifts in kind, including vouchers given to employees where the annual amount for each employee does not cumulatively exceed the value of 10% of the national average monthly salary forecast and approved by the government for the year for which it was granted.
• The training of employees and for activities related to the consolidation of corporate culture and team spirit, in the manner established by the government, in an annual amount not exceeding 5% of the value calculated as the difference between the total labour remuneration fund per enterprise, determined for the previous year or for the current year, and the remuneration fund for the work of persons specified in minor groups 112 and 121 of the Occupations Classifier of the Republic of Moldova for the respective year;
• Subscriptions for the use of sports facilities for the practice of sports and physical education for maintenance, prophylactic, or therapeutic purposes purchased from suppliers the activities of which are classified under codes 93.11, 93.12 or 93.13 of the Activities classifier in the economy of Moldova, as well as from their intermediaries, in an annual amount of up to 50% of the national average monthly salary forecast and approved by the government for the year for which it was granted, for each employee.
• the contracting of medical services in the amount of the national average monthly salary forecast and approved by the government for the year for which it was granted, for each employee.
• 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 2,500 Moldovan lei (MDL) per month for each child. The maximum amount of these expenses should be deducted in the amount of 5% from the labour remuneration fund for the current year.

As of 15 August 2024, the following incomes are non-taxable:

• income earned by individuals, excluding individual entrepreneurs and peasant (farm) households from the return of recyclable materials such as packaging, paper, cardboard, rubber, plastic, glass (including glass shards), and used electric accumulators, whether handed over separately or as components of electronic or electrical waste.
• income earned by resident individuals in the form of capital gains or interest from state securities and/or bonds issued by local public administration authorities.