Taxation/salaries

Working in Europe | Taxation/salaries | Moldova

Taxation system in Moldova

Labor legislation settles the social partnership rules when hiring foreign researchers.When the foreign researchers are being hired through a labor contract, all the provisions of the legislation of the Republic of Moldova are applied. According to the legislation of the Republic of Moldova, every employer is required to monthly calculate and withhold various taxes from their employees; being considered the given exemptions claimed by the employee, contributions or premiums are calculated pursuant to the Main State Tax Inspectorate, the National Health Insurance Company and the National Social Insurance Agency of the Republic of Moldova. Contributions The employer and the employee must contribute to the social and health security. Percentage paid by the employer and the employee is based on the gross income.

  • Pension fund 6%;
  • Insurance premium 3.5%;
  • Income tax 7% up to 26 700 lei and 18% starting from 26 700 lei;
  • Exemptions for dependents excluding dependents who are disabled from childhood –2040lei per year;
  • Personal exemption 10 128 lei per year.

Employer’s contributions:

  • Social Insurance Fund 23%;
  • Health insurance premium 3.5%.

Taxes are levied both at the national and local levels.

  • income tax,
  • VAT,
  • excise taxes,
  • private tax,
  • customs duties;
  • road taxes.

Local taxes include:

  • immovable property tax;
  • natural resources taxes,
  • territory development tax;
  • tax for organizing auctions and lotteries in the administrative-territorial unit;
  • tax for advertising placement;
  • tax for the use of local symbols;
  • tax for trading and/or social services units;
  • market tax;
  • tax for temporary living;
  • resort tax;
  • tax for rendering of the municipal, urban and rural (communal) passenger transportation services;
  • car parking tax;
  • dog owners tax;
  • tax for development of localities situated in the border zonewith customs (offices) posts for border crossing.

Withholding Tax (WHT)

WHT on payments to residents Each resident entity that makes payments in the form of interest, royalties, service fees or payments to individuals for lease, rent or usufruct of movable and immovable property, must withhold and pay to the budget a WHT at the following rates:

  • 10% final withholding of an individual’s income derived from lease, rent, usufruct of movable and immovable property, advertising campaign, gambling;
  • 15% final withholding of an individual’s income from monetary and non-monetary payments performed for the benefit of individuals, which are treated as non-deductible for the paying company and non-taxable for the recipients thereof;
  • 5% final withholding of the valueof the contract for possession and/or use of immovable property by individuals, who do not perform entrepreneurial activity;
  • 15% of interest paid to individuals (except for individual entrepreneurs and farms) and royalties. The beneficiary deducts (i.e. recover) the 15% WHT from his due income tax;
  • 5% of payments to individuals (except for individual entrepreneurs and farms). The beneficiary deducts (i.e. recover) the 5% WHT from his due income tax.

WHT on payments to non-residents

Non-residentsare subject to WHT (without deducting the related expenses) as follows:

  • 10% for service fees received by a non-residents for services if they were performed on the territory of Moldova;
  • 10% of capital gain received from sale of real estate located on the territory of Moldova or from the sale of the shares, if the shares are sold to a Moldovan resident. The taxable basis is estimated based on the capital gain rule, namely 50% of the difference between the amount of the proceeds and the tax book value of the assets;
  • 10% on interests and royalties;
  • 10% on other income;
  • 15% of dividends;
  • 15% of both monetary and non-monetary payments made to non-residents individuals and legal entities, which are treated as non-deductible for the paying company and non-taxablefor the recipients thereof.

Taxation of Non-residents

Taxable income of a non-resident is taken into account only if it is received from sources located in Moldova. Expenses, losses and other payments directly related to the income are not deductible. The salary of non-residents working in Moldova is subject to income tax at the same rates as those of Moldovan residents. Individuals, who are non-residents, are not entitled to personal exemptions, spouse exemption or dependant's exemption.