Business Environment

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In this page: Accounting Rules | Tax Rates | Intellectual Property | Legal Framework | Standards | Business Practices

 

Accounting Rules

Tax Year
Calendar year.
Accounting Standards
The national charter of accountants and the accounting standards of the Republic of Moldova (MAS) have been in existance since 1998 and follow the international standards of accountants (IAS/IFRS).
Accounting Regulation Bodies
Ministry of Finance
Accounting Reports
The balance sheet, the profit and loss account and the appendix should be part of the accounting structure.
Publication Requirements
Publication should be done annually.
Professional Accountancy Bodies
Accountants association of the Republic of Moldova , Moldovan only.
Certification and Auditing
Companies are generally not required to have their accounts audited, although this requirement does exist for certain specific types of entities, such as banks, investment funds etc.. You can contact en external auditor: Deloitte, PricewaterhouseCoopers, KPMG.
Accounting News

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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.

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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.

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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.

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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%

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Intellectual Property

National Organisations
The State Agency on Intellectual Property of the Republic of Moldova (AGEPI).
Regional Organisations
Charter of the Commonwealth of Independent States (Charter on Intellectual property).
International Membership
Member of the WIPO (World Intellectual Property Organization)
Signatory to the Paris Convention For the Protection of Intellectual Property
Membership to the TRIPS agreement - Trade-Related Aspects of Intellectual Property Rights (TRIPS)
 

National Regulation and International Agreements

 
Type of property and law Validity International Agreements Signed
Patent
 
Patent Law No.461/1995
20 years Patent Cooperation Treaty (PCT)
Trademark
 
Law on Trademarks and Designations of Origin No. 588-XIII
10 years Trademark Law Treaty
Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks
Design
 
Law on protection of Industrial Designs No.991/1996
5 years  
Copyright
 
Copyright Law Law No.293-XIII
During the life of the author and up to 50 years after his/her death WIPO Copyright Treaty
WIPO Performances and Phonograms Treaty
Industrial Models
 
Law on the protection of Industrial Designs No. 991-XIII
5 years  

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Legal Framework

Independence of Justice
Moldova's constitution provides for an independent judiciary; however, judges are subjected to political pressure.
Equal Treatment of Nationals and Foreigners
Foreign nationals cannot always expect an impartial trial from the country's judicial system.
The Language of Justice
The language of the court is Moldovan, which is very close to Romanian.
Recourse to an Interpreter
It is possible to have an interpretor.
Sources of the Law and Legal Similarities
The main source of law is the new constitution of 1994 (it replaced the old Soviet constitution of 1979). The legal system is based on a civil law system and judicial reviews of various legislative acts and governmental decisions. 
Checking National Laws Online
Republic of Moldova Parliament website

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Standards

National Standards Organisations
National Institute of Standardization and Metrology of the Republic of Moldova
Integration in the International Standards Network
The National Institute of Standardization abides by the international (ISO) and European (CEN) standards, and is a member of the Euro-Asian Council for Standardization, Metrology and Certification (EASC).
Classification of Standards
The Moldovan standards are the SM. For more information consult the INSM website.
Online Consultation of Standards
For more information, refer to the National Institute of Standardization and Metrology of the Republic of Moldova.
Certification Organisations
National Institute of Standardization and Metrology of the Republic of Moldova

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Business Practices

General Information
Logisticsmoldova, Information on Moldovan etiquette
Opening Hours and Days
Banks are open Monday to Friday from 8 AM to 12 PM then from 1 PM to 5 PM.  Credit cards are accepted in very few hotels, therefore it is better to carry cash.
 

Public Holidays

New Year's Day January 1st
Orthodox Christmas January
Day following the Orthodox Christmas January
Orthodox New Year Mid-January
Orthodox Easter Monday April
Labor Day May 1st
Commemoration Day May 5th
Victory Day May 9th
Independence Day August 27th
National Language Day (Limba Noastra) August 31st
Chisinau Day October 14th
 
 

Periods When Companies Usually Close

New Year's Day January 1st
Orthodox Christmas January
International Women's Day March 8th
Easter According to the Orthodox Calendar
Commemoration Day Sunday following Easter
Labor Day May 1st
Victory Day May 9th
Independence Day August 27th
Limba Noastra (National Language Day) August 31st
National Wine Day October 13th and 14th
 

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Latest Update: November 2022