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).
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.
There is no separate capital gains tax (CGT). Starting 1 January 2020, 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.
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 252).
- Income from the withdrawn amount from the share equity related to previously increased share equity upon distribution of the net profit and/or other sources recorded in the owners'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.
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 by employees of the companies with software development as the main activity exceeding the monthly sum of two average monthly salaries per economy (until 2023 inclusive).
- Income obtained from selling the home base. The home base 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.