Moldova

Corporate income tax (CIT)

As of 1 January 2024, employers will be entitled to deduct additional expenses as well as:

• Payments and expenses incurred by the employer for the benefit of the employee within the limits established by the legislation, namely: 
  • 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 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.

• Donations for philanthropic or sponsorship purposes to trade unions and employer organisations at up to 5% of the taxable income.

Payroll taxes

Starting 1 January 2021, mandatory social security contributions (SSC) due by the employer and employee are combined into a single 24% rate (with some exceptions) and are fully borne by the employer. The employee bears the single mandatory health insurance contribution of 9%.

The following new provisions regarding the calculation of the SSC apply as of 1 January 2023:

• For each full-time employee, the minimum monthly taxable base for the calculation of SSC cannot be lower than the national minimum monthly salary as determined under the law based on the actual hours worked.
• For part-time and reduced-work schedule employees, the SSC calculated by reference to the monthly taxable base cannot be lower than 25% of the SSC determined by reference to the national minimum monthly salary.

The list of benefits in kind that can be granted by employers to their employees has been revised. From 2024 onwards, the following payments and expenses incurred on behalf of employees will not be considered as benefits in kind:

• 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.

Value-added tax (VAT)

Starting 10 August 2023, the VAT rate for hotels, restaurants, and cafes has been decreased from 12% to 8%.

Starting 1 January 2024:

• Construction and assembly work on renewable energy power plants will be considered as VAT-exempt supplies without the right to deduct.
• The VAT rate for sanitary pads, tampons, and menstrual cups for women will be 8%.

From 2026, cars and other vehicles will be taxed at the standard VAT rate of 20%.

Starting 15 April 2022, the e-book production and/or audio and electronic periodicals publications and/or audio, as well as editing services, services regarding copyright, and related rights, are VAT-exempted supply without deduction right.

Starting 1 May 2022, a taxable subject must provide to the buyer an electronic tax invoice (i.e. 'e-Factura') for VATable supplies of main petrol products (i.e. gasoline, diesel) performed on Moldovan territory.

The following main modifications related to VAT entered into force on 1 January 2023:    

• Companies registered as VAT payers that register transactions using the Automated Informational System (AIS) and/or issue tax receipts through machines with Electronic Sales Monitoring (ESM) have a right to the refund of VAT on purchased goods and services. The refund will be made in the amount of the excess VAT on purchases (including VAT on imports) over the amount of VAT on supplies for transactions registered as of 1 January 2023.

• The reverse-charge mechanism for VAT on import of services has been implemented, so VAT payers are not required to pay VAT on such imports. The VAT amounts related to these transactions will be reflected as output VAT, and input VAT will be allowed for deduction. Non-VAT payers will be required to pay and declare VAT on the import of services.

• Supplies of electric motor scooters, ferrous and non-ferrous metal waste and residues, and industrial residues containing metals or alloys became taxable supplies.

Excise duties

The excise duties rates are gradually increased in line with Deep and Comprehensive Free Trade Agreement (DCFTA) provisions to which the Republic of Moldova is part.

New regulations have been introduced for electronic cigarettes and tobacco products.

Excise duties are not paid for goods subject to excise duties that are imported by legal entities for non-commercial purposes if the intrinsic value of these goods does not exceed the sum of 100 euros (EUR).

A new excise duty calendar has been set for the period 2024 to 2026. From 2026, excise duty on vehicles will be abolished, except for the excise duty on luxury cars.

Tax on immovable property

The maximum and specific rate for determining the real estate tax have been abolished.

The reporting and payment deadline for the tax on immovable property is 25 September of each year for property acquired by 31 August. For property acquired after 31 August, the reporting and payment deadline is 25 March of the tax period following the reporting one.

Taxpayers may no longer benefit from a 15% discount on the payment of the tax on the immovable property by 30 June.

Taxes on the natural resources

As of 1 January 2024, natural resources taxpayers have to submit the tax return and pay the taxes by the 25th day of the month following the end of the reporting quarter as follows:

• 50% of the tax amount is paid to the first-level local budget.
• 50% of the tax amount is paid to the state budget.

Withholding taxes (WHTs)

 The following changes came into effect on 1 January 2024:

• Banks, savings and loan associations, and issuers of debt securities and bonds will withhold a 6% tax from interest paid to resident individuals.
• The Ministry of Finance or primary dealers will also withhold a tax of 6% from interest income earned by individuals from government securities.

This will not be withheld in advance as part of the income tax on the disposal of shares, bonds, or other property titles in entrepreneurial activity.