PwC Moldova: Tax and Legal Alert no.4/ 2018: Approval of Tax and Customs Legislation Amendments

PwC Moldova: Tax and Legal Alert no.4/ 2018: Approval of Tax and Customs Legislation Amendments

• 29.01.2018

In brief

The Law significantly amending the Republic of Moldova’s fiscal, customs and other normative acts has been published.

In detail

Income tax 

Personal income tax

The threshold for the application of the progressive personal income tax rates of 7% and 18% is MDL 33,ooo. The annual value of allowances has been increased as follows: 

- Personal and spouse’s allowance – MDL 11,280;
- Major personal allowance – MDL 16,800;
- Simple allowance for dependents is MDL 2,520, except for people with disabilities, for whom the allowance is MDL 11,280.

Benefits in kind offered by employers

The taxable amount of benefits granted to employees in the form of an employer’s own property is determined as 0.0373% of the property’s value basis per day of use. The value of meal tickets above the limit set by law represents a benefit in kind offered by employers. 

Non-taxable income also includes:

- Winnings from lotteries and sport betting;
- Winnings from promotional campaigns up to MDL 11,280;
- Material aid granted by trade unions up to one forecasted national average salary per employee per year, except for aid granted for death and / or illness of an employee and / or their relatives (direct and through marriage).

Withholding tax

Payers of winnings should withhold 18% tax from: 

- winnings from promotional campaigns, on each win value exceeding the personal allowance;
- gambling winnings, except winnings from lotteries and sport bets. 
Tax rate imposed on individuals’ income (with some exceptions) from supplying phytotechnical and horticultural products in their natural form has been increased from 3% to 5%. Such purchases might be subject to tax inspection if their cumulative value exceeds MDL 300,000 per individual (with some exceptions).

Expenses deductibility

As of 1 January 2017, expenses from financial allocations for the benefit of trade unions are deductible up to 0.15% of the payroll fund, if used in accordance with the collective labour agreement. Expenses for granting meal tickets are deductible within the limits provided by law. Records and depreciation of fixed assets for tax purposes Investments in fixed assets subject to a sublease or a free of charge agreement are also subject to tax depreciation. Records of fixed assets for tax purposes is held separately foreach asset.

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PricewaterhouseCoopers (PwC) Moldova

PwC helps organisations and individuals create the value they’re looking for. We’re a network of firms in 157 countries with more than 208,000 people who are committed to delivering quality in assurance, tax and advisory services. This network structure provides PwC member firms with the flexibility to operate simultaneously as local businesses, but also on a global scale, creating a platform through which member firms share knowledge, skills and resources and delivery services of consistently high quality to international and local clients. PwC started operations in Moldova in 1996. It has continuously expanded the scope of its services and currently offers a full range of professional services to both international and Moldovan enterprises. Overseen by 16 partners and employing over 600 specialists and support staff, PwC operates in Romania and Moldova from a network of four offices in Bucharest, Timisoara, Cluj-Napoca, Constanta and Chisinau.