Tax rates in Moldova

Tax Rates

Consumption Taxes

Nature of the Tax: Value Added Tax (VAT) - Taxa pe valoarea adaugata (TVA)
Tax Rate: 20%
Reduced Tax Rate: A reduced VAT rate of 8% applies to several products, including bakery products; dairy products; agricultural products; drugs; natural and liquefied gas produced and imported in Moldova; phytotechnics and horticulture products in natural form, zootechnical products in natural form, live and slaughtered produced and/or delivered within the territory of Moldova; beet sugar produced, imported and/or delivered within the territory of Moldova.
Zero-rated items include exports of goods and related services; international transport of persons and freight; electric and thermal power; and supplies of water to the public.
Exempt items include dwellings; land; cars; long-term tangible assets contributed into share capital under the special rules approved by the government; tractors and other agricultural machinery; food for children; financial services; educational services; insurance; betting and gaming; books and periodicals.
Examples of items for which input tax is non-deductible include private expenditure; cost of goods that are lost, stolen or destroyed; expenditure that is not allowable for income and corporate tax purposes; business gifts; bad debts (when a purchaser acquired goods and services but never paid the supplier); goods and services purchased based on fiscal invoices that are not registered in the state general electronic fiscal invoices register (if the supplier has the obligation to register the fiscal invoices and if the buyer does not inform the tax authorities about this registration infringement); repair, maintenance and operating expenses of cars used by company management above the specified limits provided by the legislation.
Input VAT is deductible for the following items: hire, lease, maintenance and fuel for cars used by the company management (subject to certain limits); purchase, hire, lease, maintenance and fuel for vans and trucks; parking; books; attendance at conferences, seminars and training courses; mobile phones; advertising; transport; hotel accommodation.
Starting 1 January 2021, the VAT rate for HoReCa industry (hotel, restaurants and café services) has been reduced to 12% (COVID 19-related measure). With effect from 1 October 2021, such supplies were reduced from 12% to 6% during the state of emergency period declared on the entire territory of Moldova by the Parliament or by the National Extraordinary Public Health Commission. This reduced VAT rate applies to food and/or beverages (excluding the alcoholic products), prepared or unprepared, for human consumption, together with the related services allowing their immediate consumption, provided as part of activities included in Section I of the Moldovan Classifier of Economic Activities, as well as to accommodation services, regardless of the level of comfort (e.g., hotel, apartment-hotel, motel, tourist villa, bungalow, tourist boarding house, rural boarding house, camping, holiday village or holiday camp) that are included in Section I of the Moldovan Classifier of Economic Activities.
Other Consumption Taxes: Consumer taxes applied to imported products and local products are the same. Certain products - notably tobacco, alcohol, petrol and lubricants, and imported cars - are subject to excise tax in addition to customs duty and VAT.
Finally, in the country there are several road fees applied to the use of roads, as well as natural resources taxes.

Corporate Taxes

Company Tax: 12% (if the Moldovan Tax Authority, applying indirect methods, re-assesses the income amount compared to the declared gross income, a 15% rate may be applied to the excess amount)
Tax Rate For Foreign Companies: Resident companies are taxed on their worldwide income, non-resident companies only on the Moldova-sourced income of their permanent establishment.
A company is deemed to be tax resident in Moldova if it is organised or managed in the country or if it has its main place of business in Moldova.
Capital Gains Taxation: Capital gains of companies are taxed as ordinary income. Until 2020, only 20% of the gain was taxable.
Main Allowable Deductions and Tax Credits: Ordinary and necessary expenses aimed at deriving taxable income are generally tax-deductible, provided that they are duly documented (not adequately documented expenses are deductible from taxable income up to 0.2%).
Under certain conditions and limits, deductions are possible for: depreciation; amortisation; research and development expenses; business trip expenses; waste, spoilage and expiration expenses; bad debts; charity and sponsorship expenses (up to 5% of taxable income; except for donations made to contain the COVID-19 epidemic, which are fully deductible); interests expenses (provided such expenses are deemed as ordinary and necessary for carrying out the business activity); taxes (excluding corporate income tax). Expenses incurred in relation to benefits in kind granted to employees that have been subject to all payroll taxes are also deductible.
Payments performed by the employers in relation to testing of the employees for COVID-19 are fully deductible for CIT purposes. Membership fees paid for the benefit of foundations or other business associations can be deducted up to 0.15% from the remuneration fund. Membership fees for irrigation water user associations are fully deductible.
Fiscal losses can be carried forward for five consecutive years following the year the losses were incurred, but they may not be carried back.
Other Corporate Taxes: Other taxes on companies include:
- Real property tax (for immovable property used for entrepreneurial activity the rate of 0.3% is applied either on the property's estimated value or on its book value; the rate is 0.1% for agricultural properties)
- Social security contributions: 18% of the employee's salary, plus 6% to the pension fund (certain categories of taxpayers are subject to a fixed rate of MDL 12,838 applicable for 2022)
- Stamp duties
- Transfer tax: charged upon notary authentication of transactions related to the transfer of property (between 0.1% and 1% of the value of the transaction)
- Payroll taxes
- Various road taxes
- Natural resources taxes
- Local taxes and duties (advertising, land improvements, hotel room occupancy, parking tax, etc.).
Other Domestic Resources: State Tax Service of the Republic of Moldova; Consult Doing Business Website, to obtain a summary of the taxes and mandatory contributions.

Country Comparison For Corporate Taxation

	Moldova	Eastern Europe & Central Asia	United States	Germany
Number of Payments of Taxes per Year	10.0	13.9	10.6	9.0
Time Taken For Administrative Formalities (Hours)	183.0	226.2	175.0	218.0
Total Share of Taxes (% of Profit)	38.7	36.5	36.6	48.8

Source: Doing Business, Latest available data.

Individual Taxes

Tax Rate

Individuals income tax	12%
Income from farming enterprises	7%
Dividends	6% (15% if related to 2008 to 2011 profit distribution)
Gambling revenues	18%
Winnings from lotteries and sport bets	18% for the amount exceeding 1% of the personal allowance (MDL 270) for each win

Allowable Deductions and Tax Credits: Individuals can enjoy an annual personal allowance of MDL 27,000 for the year 2022, together with a spouse's exemption of MDL 19,800. Furthermore, an annual allowance of MDL 9,000 is applied for every dependant (MDL 19,800 for dependants with severe disabilities since childhood). In general, individuals with a taxable income above MDL 360,000 are not entitled to use the personal allowance.
Mandatory social security and health insurance contributions are deductible for personal income taxation purposes.
Individuals registered as private entrepreneur or farming enterprise can enjoy the same deductions provided for corporations.
Special Expatriate Tax Regime: Residents are taxed on their income sourced in Moldova and on foreign income received for their work activity effectively performed in the Republic of Moldova.
Non-residents are taxed on their Moldova-source income, generally at the same rates as residents.

Double Taxation Treaties

Countries With Whom a Double Taxation Treaty Have Been Signed: See the list of double taxation agreements signed by Moldova
Withholding Taxes: Dividends: 0 (resident company)/6%/15% (dividends received between 2008 and 2011), Interest: 0 (resident company)/3% (paid by Moldovan banks to resident individuals)/ 12%, Royalties: 0 (resident company)/12%

Sources of Fiscal Information

Tax Authorities: Overview of Moldova's tax measures in response to Covid-19
State Tax Service of the Republic of Moldova
Customs Service of the Republic of Moldova
Other Domestic Resources: Ministry of Finance
State Tax Service - Tax legislation

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