Moldovan Government Introduces 4% Tax on Small Businesses

Simplified Taxation for Small Businesses

Starting from [date], the Moldovan government has introduced a new tax regime aimed at simplifying the taxation process for small businesses. Companies with turnover below the mandatory Value-Added Tax (VAT) registration threshold or those who have chosen not to register voluntarily will be subject to a 4% tax on their taxable turnover.

Benefits of the New Tax Regime

• The 4% tax rate is expected to benefit smaller businesses and start-ups, providing a more streamlined tax system compared to the standard VAT regime.
• The new tax rate will apply to companies operating in various sectors, including retail, hospitality, and services.

Personal Income Tax Remains Progressive

Income Tax Rates

Moldova’s personal income tax regime remains progressive, with rates increasing as an individual’s income increases. Income from employment, business activities, and investments is subject to personal income tax.

VAT Rates and Exemptions Remain in Place

VAT Rates

• The standard VAT rate in Moldova remains at 20%.
• Reduced rates of 8% and 6% apply to specific goods and services, such as:
  • Bread
  • Milk
  • Medicines
  • Accommodation services
• Export services are exempt from VAT, allowing businesses to deduct the VAT paid on inputs related to these services.

Fiscal Reporting and Payments Remain Obligatory

Tax Compliance Requirements

Companies in Moldova must continue to report their taxes and make payments in accordance with tax law, including: + Regular declarations + Payments of VAT, income tax, and other relevant taxes

• Tax incentives and exemptions may be available for businesses operating in specific sectors or regions.

Get Help with Company Formation and Compliance

For more information on company formation, bank account opening, and compliance requirements in Moldova, please contact Incorpore at [phone number] or visit our website at [website URL].