Moldova tax system - taxation of Moldavian companies and individuals: VAT, income tax and capital gains. Tax treaties of Moldova

The Tax Code contains the following personal income tax rates for 2025:

• income from employment, including benefits in kind, and from professional or entrepreneurial activity – 12%;
• capital gains – 12%;
• other taxable income – 12%;
• sole proprietorships – 12%;
• income for farming enterprises – 7%;
• dividends, except for distribution of profits for 2008-2011 – 6%;
• dividends related to distribution of profits for 2008-2011 – 15%.

Resident companies must normally calculate their tax base for the purpose of corporate income tax based on their global income. The corporate income tax rate is 12%.

Small and medium-sized companies that are not registered as VAT payers and meet certain criteria can choose a special regime of corporate income tax of 4% of their total income.

The standard VAT rate in Moldova is currently 20%. It usually applies to local supplies of goods and services and to imports of goods and services through the reverse charge mechanism.

Besides the above, some kinds of supplies are subject to reduced VAT rates. For example, local supplies of bread and bakery products, milk and dairy products, natural gas transportation and distribution services, biofuels used for the production of electricity, heating and hot water, and certain phytotechnical, horticultural and zootechnical products are subject to a reduced VAT rate of 8%.

The following income tax rates apply to payments of non-residents:

• 6% - for dividend payouts, except for dividends paid out of profits received in years 2008 through 2011, for which the withholding tax rate is 15%.
• 15% - of the amount withdrawn from the authorized capital and connected with an increase that happened as a result of distribution of net profit and/or other sources defined as equity capital among shareholders (associated persons) during the financial period from 2010 to 2011, in accordance with the venture capital quota.
• 12% - for other income.

Real estate tax is a local tax paid on real estate (i.e. land and/or a building on land) by the owner of the real estate or the owner of substantive rights. Residents and non-residents who own real estate in Moldova have analogous obligations.

Specific rates of real estate / land tax are set annually by representative and advisory bodies of local government.

Stamp duties may be charged, among other, in the following cases:

• when filing a lawsuit;
• when registering civil status documents;
• when issuing a passport to a citizen of Moldova and other supporting documents;
• when registering at the place of residence;
• when redeeming goods from the state;
• when registering a mortgage loan, issuing extracts from the real estate register;
• when performing notarial actions (i.e. for notarization of real estate sale contracts);
• when applying an apostille.

Since 1 January 2021, the unified 24% social contribution rate applies (with some exceptions), which is completely covered by the employer.

A compulsory medical insurance contribution is calculated as a percentage of salary and other remunerations; since 1 January 2021, it is 9% and completely covered by the employee.

Environmental pollution fees are administered by the Moldovan Tax Authority (MTA).

These fees are paid by manufacturers, importers and/or buyers of certain kinds of goods that produce contaminants when used.

Moldovan tax legislation does not contain controlled foreign company provisions.

Tax legislation of Moldova contains the following specific provisions in relation to transactions made by Moldovan companies with related parties:

• income from business transactions made with shareholders or other related parties at a price lower than the market value will be adjusted to the market value for taxation purposes;
• deduction of losses arising when selling or exchanging property, performing works or providing services between related parties directly or through intermediaries (whether the transaction price corresponds to the market value or not) is not allowed;
• losses incurred in respect of related parties are not subject to deduction if the payments are not substantiated and if such expenses are not necessary and usual business expenses.

Moldova has entered into 51 Double Tax Treaties (DTCs) with the following jurisdictions:

51 DTCs: Azerbaijan, Albania, Armenia, Austria, Belarus, Belgium, Bosnia and Herzegovina, Bulgaria, Canada, China, Croatia, Cyprus, Czech Republic, Estonia, Finland, France, Georgia, Germany, Greece, Hungary, Ireland, Israel, Italy, Kazakhstan, Kuwait, Kyrgyzstan, Latvia, Lithuania, Luxembourg, Macedonia, Malta, Montenegro, Netherlands, Oman, Poland, Portugal, Romania, Russian Federation, Serbia, Slovakia, Slovenia, Spain, Switzerland, Tajikistan, Turkey, Turkmenistan, UAE, Ukraine, United Kingdom, Uzbekistan, Japan.

BEPS MLI: The Republic of Moldova has not yet signed the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI).

Resident and non-resident legal entities must make and receive payments and transfers connected with foreign currency transactions through their bank accounts.

There are also certain limitations as to when such entities can use cash or payment instruments to make foreign currency transactions.