Amendments to tax, customs and other normative acts

In short

Law no. 214/2024 has been published, introducing substantial amendments to tax legislation and other normative acts.

In detail

Income tax

Taxation of individuals

The composition of non-taxable income sources has been supplemented, including:

• the income obtained by individuals resident in the Republic of Moldova (citizens and stateless persons) from the sale of a car owned for at least three years, with the exception of collectible vehicles of historical or ethnographic interest;

• the income of resident individuals obtained in the form of capital increase or interest related to state securities and/or related to bonds issued by local public administration authorities;

• the income of resident individuals from the sale of electricity produced from renewable sources and to whom the net metering/invoicing mechanism applies according to Law no. 10/2016;

• the rights granted under the ‘stock options plan’ at the time of granting them, in accordance with the conditions established by the government;

• the income obtained by the system operator and/or the thermal energy unit, following the receipt, free of charge, of electric lines and stations, natural gas installations or thermal networks and/or thermal energy installations.

Some non-taxable income categories have been adjusted, as have the tax-exempt thresholds for some income categories, including:

• for gifts in non-monetary form, including vouchers offered 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;

• for 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 to practise 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.

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

Deduction of expenses related to the entrepreneurial activity 

Deductibility threshold for certain types of expenses have been adjusted (see the list above). Likewise, the right to deduction for these types of expenses which exceed the threshold established by legislation will not be limited if, in relation to them, were calculated social security contributions and/or withheld health insurance contributions and income tax owed by the employer and the employee.

Losses obtained following the sale or exchange of property, the performance of works and the provision of services, carried out directly or mediated between affiliated parties, will be allowed for deduction if the arm’s length principle has been applied in determining the price for these transactions.

No deduction will be allowed for the expenses incurred by the legal entity for the redemption or cancellation of options from a stock option plan.

The threshold of bad debt with an expired statute of limitations has been increased from MDL 1,000 to MDL 2,000.

Non-banking financial institutions will be allowed to deduct provisions relating to allowances for asset losses and conditional commitments calculated in accordance with IFRS.

Deduction of the fixed assets’ depreciation 

As of 2025, the right to apply the accelerated depreciation method for the first year of putting the fixed asset into operation is granted to all legal entities, except for legal entities that carry out financial insurance/reinsurance activities provided for in section К of the Activities classifier in the Moldovan economy.

Personal income tax exemptions 

The annual amount of personal income tax exemption for individuals has been increased by approximately 10%.  

Deduction of expenses for individuals

The list of expenses allowed for deduction for individuals has been adjusted as follows:

• The amount paid for purchase of life, health, fire and other natural disaster insurance policies, within the limit of the national average monthly salary for all cumulative contracts.

• The interest paid for the purchase of the first home based on a credit agreement, other than that contracted through the state program, in the amount of the national average monthly salary for the year for which it was granted.

• Expenses paid during a tax period for the education of dependents – children – in the institutions provided for in art. 15 of the Education Code no. 152/2014, in the amount of the national average monthly salary applicable cumulatively for all children and types of education.

Capital assets 

In the case of transactions with shares acquired at a preferential price or free of charge, within a stock options plan, the increase or loss of capital is determined as the difference between the sale price (amount received / income obtained) of the shares and the value base of these shares.

Non-residents taxation

The income of non-residents from leasing, lease, sublease or usufruct of property located on the territory of the Republic of Moldova, including for ships, aircraft and transport (railway, road), including those operated in international traffic, as well as movable properties related to their exploitation, obtained from resident individuals, will be taxed at 12% of the monthly value of the contract. The people mentioned are obliged to register the concluded contract with the Moldovan Tax Authorities within seven days as of the date of its conclusion. The tax is paid monthly, at the latest on the twenty-fifth day of the current month, in the manner established by the Moldovan Tax Authorities.

Value added tax (VAT)

As of 15 August 2024, the settlement of additional costs or revenues from balancing the system, according to point 707 of the Electricity Market Rules, approved by the National Agency for Energy Regulation, will not constitute objects of taxation with VAT.

The deduction of the amount of VAT related to procurement from suppliers included in the list of taxpayers obliged to issue e-invoices will no longer be conditional on issuance through this platform.

The VAT amounts related to the goods purchased, as well as those related to the goods, services purchased that were used in the manufacture of goods will be allowed for deduction for cases when they  were destroyed in the process of an entrepreneur’s activity as a result of exceptional situations, as defined according to Government Decision no. 1076/2010, and under the conditions in which these situations are demonstrated and confirmed.

Tax invoice

The obligation has been established to issue e-invoices for the delivery of goods and/or services (except for deliveries of electricity, thermal energy, natural gas, electronic communications services and home utilities) to economic agents from the Republic of Moldova that do not have tax relations with its budgetary system or within the implementation of technical and investment assistance projects.

Excise duties

As of 2025, excise duties will not be levied on fur clothing. 

The excise duty rates for tobacco products are to be adjusted over a period of three years.

Tax administration

The taxpayer has the right to present the corrected tax return related to social security contributions no later than six years after the deadline for presenting the corrected tax return.

The procedure for carrying out the simplified tax inspection at the office of the Moldovan Tax Authorities has been regulated.

The limitation period can be extended for a period of more than six years following the last date set for the presentation of the tax return if the taxpayer has not submitted the tax return or requests the return of overpaid amounts or of the amounts which, according to the tax legislation, are to be returned.

Transfer pricing

Advance, licence and contribution were excluded from the notion of ‘transaction’. 

The notion of ‘local transaction’ has been adjusted to refer only to a transaction between resident taxpayers, where one or both taxpayers are residents of free economic zones / information technology parks or they apply different rates and/or have different taxable bases for corporate income tax.

To determine the thresholds for transaction reporting, the total value of the transactions represents the revenues and/or expenses recognised according to the accounting records arising from the transactions carried out with all related parties, excluding exchange rate and revaluation differences.

The fines for presenting inauthentic information and/or transfer pricing file that led to the reduction or avoidance of tax obligations have been reduced from MDL 150,000 / MDL 200,000 to MDL 60,000 / MDL 90,000. The fines for not presenting the transfer price information and/or file have also been reduced, from MDL 300,000 / MDL 500,000 to MDL 100,000 / MDL 150,000. The reduced fines will be applied for tax inspections initiated by the Moldovan Tax Authorities for the tax periods starting with 2028.

As of 1 January 2025, the concept of ‘advance price agreement’ will come into force. A decision issued by the Moldovan Tax Authorities will establish and justify the conditions and the methods of formation of transfer prices during a determined period related to the a controlled transaction or transactions carried out between related parties.

Tax on real estate

For certain categories of real estate, the local council can increase the real estate tax by up to 300%.

Wealth tax

One of the criteria for determining the object of taxation for wealth tax has been modified, with the estimated value being set at a minimum of 200 national average monthly salaries forecast for the period for which the tax is calculated.

Local taxes

The deadlines for presentation of tax returns and payment of local taxes have been changed from quarterly to semiannually by the twenty-fifth day of the first month immediately following the management semester.

To remember

The provisions of Law 214/2024, through which amendments are made to tax, customs and other normative acts, will enter into force on 1 January 2025, with some exceptions.