INDIVIDUAL TAXATAION

Residents are taxed on their worldwide income. An individual is considered resident if he has a permanent residence in Moldova or he is present in the country for more than 183 days in a year. Married couples are taxed separately.

INCOME TAX

Income earned in Moldova is taxed at progressive rates, often withheld at source, except for some forms of income, on which different rules apply. Business and professional income are taxed by way of assessment. For types of income that are taxed as ordinary income, progressive rates are applied. Rental income of residents is taxed at a flat rate of 10% on the gross amount, by withholding.

Rental Income

Rental income is subject to a 5% withholding tax, if the tenant is an individual. The tax is levied on the gross amount. The applicable tax rate is 10% if the tenant is a legal entity.

Deductions and Allowances

• Contributions to eligible charities and qualified sponsorship contributions are deductible up to 10% of taxable income.
• Contributions made by an employer on behalf of an individual to a qualified non-state pension fund are deductible up to 15% of gross income.
• Social security and medical assistance contributions are deductible.
• A basic personal allowance of MDL 5,400 (€326) per year is given.
• An additional allowance of MDL 5,400 (€326) for a spouse is also given, provided that only one of them will use this allowance.
• Additional allowances of MDL 1,440 (€87) per year are granted for children and other dependants.

Capital Gains

Capital gains realized from sales of real estate properties are no longer taxable.