SRL Taxes in Moldova: What a Company Actually Pays

Value added tax is the threshold that most changes a company's tax profile. Registration becomes mandatory once the value of taxable supplies over any twelve consecutive months exceeds the ceiling set by the Tax Code. From the moment the ceiling is crossed, the company must file its registration application within the statutory deadline — a delay attracts penalties and an obligation to account for VAT on supplies made after the date registration should have taken effect.

The standard VAT rate is 20%. A reduced rate applies to specified categories of goods and services, including basic foodstuffs, medicines and certain supplies. Exports of goods and a range of services supplied outside the territory are zero-rated, meaning the company charges no VAT to the customer but retains the right to deduct input VAT paid to its own suppliers. For companies serving mainly foreign clients, this mechanism typically generates a recoverable VAT position rather than a payable one.

Voluntary registration before reaching the threshold is possible and sometimes rational. If your suppliers charge VAT and your customers can reclaim it, staying unregistered simply means you absorb input VAT as a cost with no right of deduction.

For most companies, the tax burden attached to staff far exceeds the tax on profit. From the employee's gross salary the company withholds personal income tax, applied after any personal allowance the employee is entitled to, together with the individual mandatory health insurance contribution. Separately, as employer, the company owes the state social insurance contribution, calculated on top of the gross salary.

The practical consequence is that a net salary agreed with an employee costs the company considerably more than the amount that reaches their card. Any staffing budget must be built from the total employer cost, not from the negotiated net figure. The corresponding returns are filed monthly, and late payment of contributions triggers interest that accrues automatically.

A frequent error in young companies is paying the director without an employment contract and without declaring it, in the form of withdrawals from the company account. Such amounts are not deductible expenses and are reclassified on audit, with tax and penalties applied.

For companies operating in information technology, Moldovan law provides a distinct regime built around information technology parks. A resident of such a park pays a single tax calculated as a percentage of sales revenue — the rate being 7% — which replaces an entire package of tax obligations.

This single tax substitutes, in the main, corporate income tax, employees' salary income tax, social and health insurance contributions, local taxes and property tax attached to the activity. For a business where payroll dominates the cost base — the typical profile of a software development firm — the difference against the general regime is substantial.

The regime is neither automatic nor unconditional. The company must obtain resident status, its principal activity must fall within the list of permitted activities, and the single tax carries a minimum amount tied to headcount and the national average wage. Leaving the regime or losing resident status returns the company to the general rules going forward.

Before building a financial model on the 7% rate, verify the list of eligible activities and the conditions for maintaining status — in practice, that is where the surprises appear.

Profit remaining after tax belongs to the company, not to its shareholders. Transferring it to shareholders is done by distributing dividends, on the basis of a general meeting resolution adopted after the financial statements are approved. On payment, the company withholds tax at source on dividends paid to individuals.

This means money reaching the shareholder has been taxed at two levels: once at company level through corporate income tax, and again on distribution. Founders often discover this only at the end of the first year, and it belongs in the return calculation from the outset.

Taking money out of the company account without a legal basis — no employment contract, no dividend resolution, no expense claim with supporting documents — is among the most common findings on audit. Such amounts are treated as taxable income of the individual, with obligations recalculated and penalties applied.

An active SRL runs a tax calendar with monthly, quarterly and annual obligations: payroll and contribution returns are filed monthly, VAT-registered companies file the VAT return on the monthly statutory deadline, and the annual corporate income tax return closes the fiscal period. Taxpayers on the general regime make advance payments during the year.

When a company is audited, inspectors typically concentrate on the same points: whether deductible expenses are real and documented, whether input VAT was correctly deducted, how payments to individuals were treated, and whether contracts exist to support the transactions. A well-kept file — signed contracts, correct invoices, handover documents, bank statements that reconcile — turns an audit into a formality. Their absence turns entirely genuine costs into non-deductible amounts.

The rates and thresholds described here reflect the framework applicable at the time of writing. Moldovan tax law changes frequently, usually through the fiscal policy package adopted at year end, so before any structuring decision confirm the figures in force or seek advice.