Moldova's fiscal, customs policy for 2020-2022 sees introducing reverse taxation principle

Chisinau, 5 November /MOLDPRES/ - The sum of the value added tax (VAT) paid for the pledged, mortgaged, sequestrated property or for assets of enterprises declared in process of insolvency will be transferred, as a priority, to the budget. In this respect, the document of fiscal and customs policies for 2020-2022 provides for the introduction of the principle of reverse taxation.    

The subject was discussed at a working meeting, organized by the Finance Ministry with representatives of the State Fiscal Service, National Bank of Moldova (BNM), business environment, bank institutions and employers.

According to Finance Minister Natalia Gavrilita, the harming of the state budget  will be avoided through the introduction of the reverse taxation principle. “This is an international practice. We propose to introduce the reverse taxation principle for the companies which are in insolvency or in the context of the pledge’s commercialization. Taking into account the seller’s payment incapacity, many times, the VAT sum related to the asset sold is not paid to the budget and in this respect, the deduction of the VAT sum, which actually does not reach the budget, takes place,” the finance minister said.   

Under the reverse taxation principle, if the insolvent economic agent (seller) sells the asset to another economic agent (buyer), the latter calculates and pays the VAT sum to the budget, subsequently having right to deduction.  

The Finance Ministry has started a string of consultations on the document of fiscal and customs policies for the next period. So far, the Finance Ministry’s leadership has discussed this subject with business associations, representatives of local and central public authorities, employers and trade unions.