Moldova plans higher tax allowances, electricity VAT relief
The personal income tax allowance for individuals will increase from 34,620 to 46,680 lei, while the monthly electricity consumption threshold exempt from VAT will rise from 100 to 150 kWh per consumption point. The changes are included in an opinion approved by the government today on amendments to a draft law aimed at simplifying tax and customs legislation.
Of the 87 proposals submitted during the review process, 27 were accepted in full or in part, CE Report quotes MOLDPRES.
In the area of personal income taxation, the opinion also provides for an increase in the allowance for dependents from 9,900 to 11,040 lei. In addition, taxpayers will be allowed to deduct expenses for services related to sports activities. Trade unions and employers' organizations will continue to benefit from income tax exemptions on revenue used for their statutory purposes.
Regarding taxation of agricultural products, the reduced VAT rate of 8% will remain in place for planting material and cereal products until January 1, 2028. A reverse-charge mechanism will be introduced for cereal products between VAT payers. However, the draft law will no longer include a provision applying the reduced 8% VAT rate to eggs and poultry meat.
The amendments also cover the cultural and sports sectors. The proposed VAT exemption with the right to deduct input tax for book production will be extended to publishing services and related copyright. The list of national sports federations eligible to receive goods free of charge for sporting activities will also be expanded.
The VAT exemption on the import or purchase of goods by non-profit organizations will be maintained when those goods are used for the needs of social assistance institutions.
Regarding local public administration, local councils will be required to adopt local tax rates annually. If the rates are not approved or a decision is annulled by a court, the rates from the previous year will apply.
The opinion also maintains compensation for natural gas and electricity consumption costs for residents of the villages of Hagimus, Fârlădeni and Hârbovăț until April 1, 2027.
Another amendment concerns investment in renewable energy. Importers of batteries intended for renewable energy installations with storage systems will be allowed to defer customs duty payments for up to 20 months without providing a guarantee. The customs debt will be extinguished after the submission of a grid connection certificate and confirmation that the beneficiary has not received other financial support for the same investment. The measure will apply until December 31, 2027.
The opinion also includes a change concerning stock option plans, which allow employees to acquire stakes in companies. The proposed new exemption under Article 20 of the Tax Code will be removed from the draft law. However, equity stakes worth up to 100,000 lei acquired through the exercise of these rights will be excluded from the calculation base for social security contributions and mandatory health insurance premiums.
The government has also proposed several adjustments following the examination of the draft law by parliamentary committees. The vice tax will be redefined and applied exclusively to gambling: 6% of deposits made by individuals and 25% of the gross revenue of the state gambling monopoly operator and its partner.
In addition, dividends received from abroad by resident individuals will be taxed at a rate of 8%, while the reduced VAT rate of 8% will apply to milk and dairy products classified under tariff headings 0402 and 0403.
A fallback mechanism will also be established for property tax. If a decision by the local public authority is missing or annulled, the minimum rates provided by law will apply.
Proposals that were not supported were assessed based on their impact on the budget, consistency with tax policy and compatibility with European Union legislation.
The opinion approved by the government preserves the draft law's overall concept and incorporates proposals considered to have a clear social benefit. The document will now be submitted to Parliament for consideration.
Photo: Chat GPT
