KPMG Moldova: Tax Newsflash, Issue 6

KPMG Moldova: Tax Newsflash, Issue 6

• 22.01.2016

New rules for implementing certain provisions of the Moldovan Fiscal Code

On 14 January 2016 Letter no. 14 / 3-07 / 7 on the correct application of some amendments made by Law no. 71/2015 to the Moldovan Fiscal Code (Law no. 1163, 24.04.1997) was published.
The Letter states that the changes introduced under Law 71 apply to the whole of 2015, even though the Law only entered force on 1 May. The Letter also clarifies the following provisions in the Fiscal Code, introduced by Law no. 71 / 04.12.2015:

1. Deduction of expenses and entering on account of the amount of VAT relating to the maintenance, operation and repair of cars used by managers and leaders in the administrative sector For the 2015 fiscal period, wear and tear expenses incurred by an entity for the maintenance, operation and repair of cars used in its business, may be only deducted for tax purposes for one car for the head office and one for each further office. This limitation is applicable only for the cars used by individuals specified in minor groups 112 and 121 of the Moldovan Classification of Occupations (i.e., CEOs, executives and similar, as well as managers in the administrative sector).

The entity must issue internal documentation giving details of the car which will be used for business activity and for which wear and tear and maintenance expenses will be calculated and deducted for VAT purposes.
Deductible expenses related to the operation of motor vehicles may also include expenditure on drivers’ wages, support staff / technical, motor insurance liability, lease payments (operating leases) and interest on financial leasing.

The deductibility or otherwise of the Moldovan vehicle registration tax will be assessed according to the general principles of deductibility in the Fiscal Code. VAT related to expenditures on maintenance, operation and repair of cars, may not be entered on account, will be related to consumption/expenditure, and will be deductible in accordance with Art. 30 of the Fiscal Code.

Read the full information in English and Romanian
 

KPMG Moldova

KPMG is a global network of professional firms providing Audit, Tax and Advisory services. KPMG operates in more than 155 countries and has over 174,000 people working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. In Romania, KPMG was founded in 1994 and now operates from six offices, in Bucharest, Timisoara, Cluj Napoca, Iasi, Constanta and in Chisinau (the Republic of Moldova) since 1997. The practice has more than 800 staff, including 18 Partners, both Romanian and expatriates from the Canada, France, Israel, Sweden etc.