Moldova Considers Tax Updates for 2027

On June 11, the Ministry of Finance of the Republic of Moldova published the draft law amending Fiscal Code No. 1163/1997, Customs Code No. 95/2021 and other normative acts with the aim of consolidating and modernizing the existing normative framework for taxpayers. Its aim is to introduce a more flexible taxation regime and simplify the administration of tax obligations.

Changes suggested for the Fiscal Code No. 1163/1997:

a) Changes regarding income tax.

Taxation of individuals not engaged in entrepreneurial activity:

– implementation of the progressive mechanism for taxation of salaries and other remunerations obtained by individuals, with the proposed income tax rate of 7% if the amount of income not exceeding 1 mln lei annually, or 15% exceeding MDL 1 mln (EUR 50,600) annually;

– unification of the quota of mandatory state social insurance contributions in the percentage quota of 21%;

– reduction of the share of the mandatory healthcare insurance premium from 9% to 7%.

Taxation of legal entities and individuals engaged in entrepreneurial activity:

– introduction of the zero income tax rate for undistributed profit: no income tax from entrepreneurial activity will be determined unless the economic agent decides on the distribution of profit in the form of dividends, including in the form of shares or quotas, or in any other form, whether monetary or non-monetary;

– expansion of activities permitted for independent contractors (freelancers): single tax at the rate of 15%, being reduced from MDL 1.2 mln (EUR 50,600) to MDL 1 mln (EUR 60,700), simultaneously with the reduction of the maximum applicable single tax rate from 35% to 30%;

– review of the conditions for carrying out entrepreneurial or professional activity by individuals: income of individuals who carry out entrepreneurial activity under the organizational and legal form of individual enterprise and peasant household (farmer), as well as the income obtained by freelancers in the field of justice and health, will be taxed with income tax in the amount of 7% if the taxable income does not exceed MDL 1 mln (EUR 50,600) and 15% on the taxable income.

Additionally:

– Review of the conditions for applying the preferential tax regime by independent traders (natural persons): it is proposed to establish the income tax rate at 3% of the income from independent activities obtained during the fiscal period.

– Expansion of the number of deductible expenses incurred by individuals: it is proposed to grant the right to deduct expenses incurred by individuals for the energy efficiency of their residential property, as well as for expenses related to the organization of events/ceremonies.

– Review of income tax rates related to investment (capital) income of individuals: revision of the income tax rates for salary/remuneration income, with a minimum rate of 7% and a maximum rate of 15%.

– Review of the taxation mechanism for donations obtained by individuals in monetary form.

– Expanding the taxable base by reviewing the base of taxable income.

b) Taxation of non-residents.

The following income tax rates are proposed:

– 15% of payments directed to non-resident individuals related to income;

– 7% of dividends directed to non-resident individuals and legal entities;

– 15% of payments directed to non-resident legal entities related to income.

c) Changes regarding value added tax and excise duties.

It is proposed to impose a 20% standard VAT rate in stages:

– from October 1, 2026: import and delivery of livestock production, for restaurants;

– from January 1, 2027: medicines, immunological products, accommodation services;

– from April 1, 2027: import and delivery of natural gas, solid biofuel.

The introduction of concepts of added sugar and liquids intended for electronic cigarettes that do not contain nicotine is also suggested for taxation with excise duties.

d) Changes regarding real estate tax and land tax: introduction, starting on January 1, 2027, of a minimum rate of 0.1% and a maximum rate of up to 1% for the real estate tax, including the land tax.

e) Changes regarding local taxes: revision fo the structure of local taxes by excluding, starting on January 1, 2028, the tax for territorial planning.

Draft law amending certain normative acts (regarding the simplification of tax and customs legislation)