Screening of Chapter 16 – TAXATION in Brussels: Findings

Screening of Chapter 16 – TAXATION in Brussels: Findings

• 19.05.2025

On May 15–16, the bilateral Screening meeting on Chapter 16 "Taxation" took place in Brussels, Belgium, as part of the Republic of Moldova’s accession process to the European Union.

The event marked the culmination of a continuous effort carried out in collaboration with the Ministry of Finance over the past year in the area of aligning tax legislation. This chapter is, based on the experience of other countries, one of the most difficult to close, as its topics are among the most sensitive for both the business community and citizens — a fact also confirmed by colleagues from the European Commission.

The discussions spanned two days and were structured into presentations across four core dimensions:

1. General overview of the tax system;
2. Indirect taxes (VAT, Excise Duties);
3. Direct taxes (income tax, abusive tax practices, exchange of information);
4. Anti-corruption and digitalization measures (Tax and Customs Authorities).

Key findings are summarized below:

• The European Commission places significant emphasis on simplifying and digitalizing the tax system.
• With the removal of borders and alongside the benefits of economic integration, a clear strategy is needed for how state budget revenues will be compensated. This may include revising tax rates or introducing new taxes, but such changes must be preceded by rounds of consultations and supported by real impact assessments.
• Excise duties, which are quite narrowly segmented, are the subject of detailed harmonization and increased interest from the European Union. By the end of this year, harmonization discussions will also cover elements not addressed by the previously presented project (see: https://amcham.md/?go=news&n=4199).
• The project concerning the application of Value Added Tax, in addition to the norms already approved or under approval related to automobiles, as well as reverse charging on energy products (previously reviewed by the AmCham community – see: https://amcham.md/?go=news&n=4206 and https://amcham.md/?go=news&n=4212), is expected to be proposed for public consultation by the end of this year.
• Also by the end of the year, a series of actions will be undertaken to harmonize income tax rules, with a direct impact on the business environment and regarding the transposition of EU Directives and other mechanisms that must be implemented upon accession (e.g., BEPS, Code of Conduct, etc.).
• Special regimes for VAT and income tax will be subject to particular scrutiny regarding how their existence might distort the general tax base applicable to entities across the European Union, including from the perspective of the Base Erosion and Profit Shifting (BEPS) Plan.