MoldovaTax Obligations Detailed

In Moldova, employers face several tax obligations, including social security contributions, income tax withholding, and reporting requirements.

Social Security Contributions (SSC)

• Standard Rate: Employers contribute 24% of employees' gross salary, including meal tickets and other remunerations.
• Specific Sectors:
  • Special Conditions: 32% employer contribution for employees working in special conditions.
  • Agriculture: 18% employer contribution, with an additional 6% covered by the state budget.
• Fixed SSC: For certain categories of taxpayers, a fixed annual SSC amount applies (e.g., MDL 20,518 for 2025).
• Payment Deadline: Due by the 25th of the month following the reporting month.
• Reporting: Monthly reporting through the unique payroll tax return, with some exceptions.
• Foreign Employees: SSC calculations are similar to those for Moldovan citizens, with some exceptions. Social security agreements exist with several countries.

Income Tax Withholding

• Rate: A flat rate of 12% applies to employee income.
• Monthly Withholding: Employers must withhold income tax monthly and pay it by the 25th of the following month.
• Annual Return: Employees file an annual income tax return by April 30th. If income is from a foreign employer, the employee is responsible for declaring and paying the income tax.

Value Added Tax (VAT)

• Standard Rate: 20% on most goods and services.
• Reduced Rates: Some goods, like certain food items, have reduced rates (e.g., 8%). Some have a zero rate, such as cars.

Other Taxes & Obligations

• Local Taxes: Paid biannually by the 25th of the month following each semester.
• Employee Debt Reporting: Annual reporting of non-wage-related employee debts to the State Tax Service is required, excluding patent holders and independent individuals.
• Corporate Income Tax (CIT): A flat rate of 12% on company profits. Various deductions are available, including employee-related expenses subject to certain limits.
• IT Park: Companies in the IT sector can opt for a simplified tax regime with a 7% tax on turnover.

Specific details and regulations can change, it's important to consult official sources or tax professionals for the most up-to-date information. Social security and tax treaties with other countries can impact contributions and withholding obligations for foreign employees. Employers must also account for any applicable deductions and exemptions when calculating payroll taxes.

In Moldova, both employers and employees contribute to the social security and healthcare systems through deductions from employee salaries. These contributions, along with income tax, form the core of employee tax deductions in the country.

Employee Deductions

• Income Tax: A progressive system applies where a 7% rate is levied on income up to 26,700 lei, and 18% on income exceeding this threshold. Annual personal allowances (29,700 lei), special category allowances (34,620 lei), dependent allowances (9,900 lei), and allowances for disabled dependents (21,780 lei) can reduce the taxable income. Allowances for a spouse in special categories (21,780 lei) also exist.
• Social Security: Employees contribute 6% of their gross income to the pension fund. As of 2025, the fixed annual social security contributions amount to 20,518 lei.
• Health Insurance: Employee contributions stand at 3.5% of their gross salary, while a 9% mandatory health insurance contribution is also applicable, totaling 12.5% for health-related contributions.
• Other Deductions: Additional deductions are available for education expenses (up to the average monthly salary), mortgage interest on first homes (excluding 'Prima Casa' program loans, capped at the average monthly salary), and certain insurance premiums (health, fire, and natural disaster, up to the average monthly salary).

Employer Contributions

• Social Security: Employers contribute 23% of the employee's gross income. Rates vary for specific sectors like agriculture (18%, with 6% covered by the state) and for employees working in special conditions (32%). Employers are responsible for remitting these contributions by the 25th of the following month.
• Health Insurance: Employers also contribute 3.5% of the employee's gross salary towards health insurance.
• Reporting and Deadlines: Employers must submit payroll tax returns monthly and remit social security contributions by the 25th of the following month.

General Tax Information for Moldova

Moldova levies taxes at both national and local levels. National taxes include income tax, VAT, excise taxes, private tax, customs duties, and road taxes. Local taxes cover areas like property, natural resources, territory development, advertising, and various other services and activities. As of January 1, 2025, several key tax amendments came into effect, impacting income tax, deductions, and exemptions. These changes aim to adjust for inflation, modernize regulations, and incentivize specific areas such as renewable energy and stock option plans. Changes for individuals include increased tax exemptions, higher debt deduction limits, and an expanded range of non-taxable income. Information regarding tax rates, deductions, and allowances is current as of February 5, 2025, and is subject to change. Consulting official government sources or tax professionals is recommended for the most up-to-date information.

In Moldova, the Value Added Tax (VAT), known locally as Taxa pe valoarea adaugata (TVA), is levied on most goods and services.

VAT Rates

• Standard Rate: 20% (This is the general rate applied to most goods and services in Moldova).
• Reduced Rate: 8% (Applies to specific goods and services like bread, bakery products, milk, dairy products, natural gas, certain biofuels, and some agricultural products. The 8% rate also applies to hotels, restaurants, and cafes).

VAT Registration

Businesses are required to register for VAT if their turnover reaches MDL 1.2 million within 12 consecutive months. Voluntary registration is also possible for businesses planning to conduct taxable supplies, even if they haven't reached the threshold. Non-resident companies providing digital services to individuals in Moldova must register for VAT regardless of their turnover.

VAT Filing and Payment

• Filing Frequency: Monthly.
• Deadline: VAT returns and payments are due by the 25th day of the month following the reporting period. Non-resident providers of digital services to Moldovan residents file quarterly by the same deadline.

Electronic Invoicing (e-Invoicing)

Moldova mandates e-invoicing for certain transactions. As of January 1, 2025, the VAT deduction related to purchases from e-invoice-obligated suppliers is no longer contingent upon invoice issuance through the e-invoicing platform. Since May 1, 2022, suppliers of gasoline and diesel must issue electronic tax invoices for transactions within Moldova.

Exempt Goods and Services

Some goods and services are VAT-exempt with the right to deduct input VAT, such as international transportation and exports. Others are exempt without the deduction right, including certain financial, educational, and medical services, and e-books and related services (since April 15, 2022). Additionally, as of August 15, 2024, the settlement of additional costs or revenues from balancing the electricity system is exempt from VAT. As of 2025, excise duties will no longer apply to fur clothing.

Note: This information is current as of February 5, 2025, and might change due to future updates in tax legislation. Always refer to official government sources for the most recent updates on Moldovan VAT regulations.

Moldova offers a range of tax incentives for businesses and individuals in 2025.

Personal Income Tax

• Increased Personal Allowances: As of January 1, 2025, personal allowances have been raised:
  • Personal Allowance: 29,700 lei (increased from 27,000 lei in 2024)
  • Special Category Personal Allowance: 34,620 lei (increased from 31,500 lei in 2024)
  • Spouse Allowance for Special Categories: 21,780 lei (increased from 19,800 lei in 2024)
  • Dependent Allowance: 9,900 lei (increased from 9,000 lei in 2024)
  • Allowance for Disabled Dependents: 21,780 lei (increased from 19,800 lei in 2024)
• Deductions for Education Expenses: Taxpayers can deduct education expenses for dependents, up to the average monthly salary forecasted by the government.
• Expanded Non-Taxable Income: New categories of non-taxable income include gains from government bonds, income from renewable energy sales, and stock option plan rights.
• Stock Option Plans: Employees and administrators can purchase up to 25% of company shares through stock option plans, which are considered non-taxable income.

Corporate Income Tax

• IT Park: Companies in the IT sector registered within the Moldova IT Park benefit from a single tax rate of 7% on turnover, with no additional payroll or other taxes. Eligible services include software development, technical consultancy, hardware production, and data processing.
• Free Economic Zones (FEZ): Businesses operating within FEZs receive several tax advantages:
  • 50% reduction in corporate income tax on profits from goods and services exported outside Moldova or delivered to other FEZ residents for export.
  • 25% reduction in corporate income tax on all other goods and services produced in Moldova.
  • Tax exemptions for investments exceeding certain thresholds ($1 million for 3 years, $5 million for 5 years).
  • VAT, excise, and customs tax exemptions.
• Employee Training and Corporate Culture Expenses: A tax exemption is available, capped at 5% of the difference between the total wage fund (current or previous year) and the wage fund for specific employee categories.
• Deductible Gifts and Expenses: Gifts in kind to employees are deductible up to 10% of the average monthly salary forecasted by the government. Limits also apply for employee training and team-building expenses, calculated as 5% of the difference between the company's total payroll and the payroll for minor groups 112 and 121. The 5% cap on childcare costs for children under three has been removed.
• Accelerated Depreciation: Businesses can use the accelerated depreciation method in the first year of operation for fixed assets (with some exceptions).

General Tax Information

• Corporate Income Tax (CIT): The standard corporate income tax rate is 12%.
• Individual Income Tax: A flat rate of 12% is applied, with deductions and allowances applicable.
• Value Added Tax (VAT): The standard VAT rate is subject to adjustments as per legislation.
• Double Tax Treaties: Moldova has double tax treaties with various countries, offering more favorable tax rates.

This information is current as of February 5, 2025, and may be subject to change. Consulting official government resources or tax professionals is recommended for the most accurate and up-to-date information.