KPMG: Tax & Legal Newsflash
Tax&Legal Newsflash
December 2009
Taxation changes
Rates set for compulsory medical insurance and state social insurance contributions
Average forecast monthly salary for 2010 approved
Definition of a public interest entity changed
Start date for application of IFRS postponed
Change in the use of special regime documents
Changes to administrative liability
For more details in English, Romanian and Russian please check KPMG Publications page.
Income tax
The definition of the subject of taxation has been revised.
A new rate of 15% has been set for the flat tax on payments to non-residents according to Article 71 of the Tax Code of the Republic of Moldova.
The annual personal exemption has been set at MDL 8,100.
The annual personal exemption for dependent persons has been set at MDL 1,800.
The tax exemption for interest on bank deposits and income from securities received by individuals and legal entities has been extended up to 1 January 2015.
Value added tax
New types of supplies beyond the scope of VAT taxation have been introduced:
· supply of goods and services within a free economic zone;
· income in the form of interest received by a lessor under lease agreements;
· supply of goods and services without consideration for advertising purposes and/or for the purpose of sales promotion, up to a limit of 0.1% of the sales revenue received in the year preceding the year of supply;
· transfer of property as part of the reorganization of a business entity.
Subjects of taxation importing services pay VAT at the moment of provision of services. The date when the obligation to pay tax is incurred is the date of the provision of services indicated in the confirming document
A reduced rate of 8% has been set for agricultural goods.
The rate for natural and liquid gas imported and supplied within Moldova has been increased to 6%.
Taxpayers are entitled to a refund of VAT on capital investments made to acquire agricultural and forestry tractors.
The taxation system for the supply of goods and services for the implementation of investment and technical aid projects, to which only zero-rate VAT applies, has been unified.
Tax administration
The deadline for a taxpayer to present its case in writing when the taxpayer contests the findings of a tax audit has been increased to 15 calendar days.
The fine for incomplete or improper preparation of accounting documentation and/or tax reports has been reduced from MDL 500 to MDL 200 for every violation and the maximum limit of the taxpayer’s liability has been set at MDL 5,000.
The fine for underestimating taxable income by a taxpayer applying zero-rate income tax has been reduced to 15% of the non-declared (underestimated) income tax.
Excise tax
The rates have been increased by 25% for beer, by 4 times for filter cigarettes (ad valorem component), by 50% for petrol and its derivatives including diesel fuel, by 3 times for perfume, toilet water and jewelry, and by 2 times for luxury cars.
Real estate tax
The object of taxation is the real estate. This includes projects under construction which are at least 50% completed, or which have remained unfinished three years after construction began.
Taxation of garages and land on which they are located, real estate of gardening partnerships, as well as commercial and industrial real estate will be based on the market value. The procedure for declaring, calculating and paying the tax on such real estate has also been amended.
Local levies
The maximum rate for the local levy for territory improvement has been doubled.
The rate of the levy for trade and service enterprises has been increased by 50%.
Miscellaneous
Road tax for passenger cars registered in Moldova has been increased in proportion to their impact on the road infrastructure.
The levy for placing service points at the side of roads outside populated areas has been increased by 2 times.
The levy for gambling licenses has been doubled.
Minimum retail and warehouse sale prices for spirits have been introduced.
Enterprises for which the volume of warehouse and/or retail sales of goods and/or services exceeds MDL 2 million in the previous year do not have to install POS terminals if all payments have been made only by bank transfers or if they are located in rural areas.
The rates for compulsory medical insurance contributions have been set
The fixed rate compulsory medical insurance contribution, applicable to certain types of income, has been reduced to MDL 2,478.
Compulsory medical insurance contributions calculated as a percentage of salary and other forms of remuneration have been set at 7 per cent (3,5 per cent for the employer and 3,5 per cent for the employee).
The rates for compulsory state social insurance contributions have been set
Individual state social insurance contributions made by an insured person working under either an individual labor contract or other contracts for carrying out work or rendering services have been set at 6 per cent of salary and other payments.
The annual basis of calculation of the individual state social security contributions may not exceed five times the forecast average monthly salary throughout the economy multiplied by 12.
Compulsory state social insurance contributions made by an employer for persons working under either an individual labor contract or other contracts for carrying out of work or rendering services have been set at 23 per cent.
Contributions made under an individual contract with the National Social Insurance Office have been increased to MDL 4,044 per year, payable monthly.
The forecast average monthly salary for 2010 has been approved
The rate is MDL 2,950.
The definition of public interest entity has been changed
Public interest entities are now defined as entities that are of significant public relevance because of the nature of their business and which are financial institutions, investment funds, insurance companies, private pension funds or commercial companies with shares quoted on the Moldovan Stock Exchange.
The start date for the application of International Financial Reporting Standards has been postponed
When preparing financial reports, public interest entities will have to apply IFRS from 1 January 2011.
Changes in the use of special regime documents
Special regime documents no longer need to be to be issued when financial services are provided by financial institutions, microfinance organizations, saving or lending associations.
Preparation of more than one primary document for the same operation has been prohibited, except for cases where a tax invoice is one of the primary documents of the special regime.
Changes to administrative liability
Liability for certain types of infringements related to the use of cash machines has been set.
Liability for infringements related to keeping accounting records, as well as for preparation and filing of financial reports has been revised.
All changes took effect from 1 January 2010.
This information is based on the provisions of Law No.108-XVIII on amending of some legislative acts of 17 December 2009; Law No.128-XVIII on funds for compulsory medical insurance for 2010 of 23 December 2009; Law No. 129- XVIII on the budget for state social insurance for 2010 of 23 December 2009; Government Decree No. 773 on approving the forecast average monthly salary for 2010 of 27 November 2009.
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