PwC Moldova: Tax and Legal Alert no. 8

PwC Moldova: Tax and Legal Alert no. 8

• 19.07.2016

Approval of tax and customs legislation amendments

The Law providing significant amendments to the Republic of Moldova’s fiscal and customs legislation has been published.

Corporate income tax 

Deductions

The deduction of the following expenses has been extended:

- Expenses related to calculation of depreciation, maintenance and repair of cars used by individuals with leading positions in a company – for one car for each individual (provided that it is used for business purposes). The deduction of such expenses was previously limited to one car for each company subdivision;
- Expenses incurred for private scholarships (in line with rules established by the Government);
- The limit of expenses permissible for deduction, incurred by persons carrying out entrepreneurial activity for philanthropic and / or sponsorship purposes, has been increased (from 2% to 5%). This amendment also restricts the right of
individuals that do not carry out entrepreneurial activity to deduct such expenses.

Carry forward of fiscal losses

The term for fiscal losses carry forward has been extended from three to five years. In addition, the requirement for carrying forward fiscal losses in equal instalments has been removed.

Submission of income tax returns 

New rules have been established regarding the obligation to submit income tax returns:

- Individuals carrying out professional activities have to submit their income tax return, regardless of whether they have a tax payment obligation;
- The rules have been amended regarding the submission of income tax returns by representative offices which obtain permanent establishment status.

Personal income tax

The thresholds for the application of the progressive personal income tax rates of 7% and 18%, as well as annual allowances provided for resident individuals, remained unchanged. In addition, the tax regime applicable to income obtained by board members or members of the audit committee of companies has been clarified. 

Withholding tax 

An obligation has been introduced for companies undergoing liquidation or reorganisation during the fiscal year to present information regarding withholding tax within 15 days as of the date of approval of the liquidation balance sheet / repartition balance of the company. 

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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.