Approved by Moldova's government: personal allowance to rise to 46,680 lei, VAT-free electricity consumption threshold to reach 150 kWh

The personal allowance for individuals will increase from 34,620 to 46,680 lei, while the monthly electricity consumption threshold exempt from VAT will be raised from 100 to 150 kWh for each consumption point. The changes are included in the opinion approved today by the government on the amendments to the draft law on simplifying tax and customs legislation. Twenty-seven out of 87 proposals submitted during the review process were accepted in full or in part.

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. At the same time, the possibility of deducting expenses for services meant for sports activities will be introduced. Trade unions and employers’ organizations will continue to benefit from income tax exemptions for income used for their statutory purposes.

As for the taxation of agricultural products, the reduced 8-per cent VAT rate will be maintained for planting material and cereal products until January 1, 2028. A reverse-charge mechanism will be introduced for cereal products traded between VAT payers. However, the provision on applying the reduced 8-per cent VAT rate to eggs and poultry meat will be removed from the draft law.

The amendments also target the cultural and sports sectors. The proposed VAT exemption with the right to deduct for books’ production will be extended to publishing services and related copyrights. In addition, the list of national sports federations eligible to receive goods intended for sporting activities free of charge will be expanded.

The VAT exemption for the import or purchase of goods by non-commercial organizations will also be maintained, provided that the 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 these rates are not approved or the 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 expenses for residents of the villages of Hagimus, Farladeni and Harbovat until April 1, 2027.

Another amendment concerns investments in renewable energy. Importers of batteries meant for renewable energy installations with storage systems will be able to defer payment of customs debt for up to 20 months without providing a guarantee. The customs debt will be extinguished after the submission of the 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 an amendment concerning stock option plans, through which employees can acquire stakes in companies. The new exemption proposed under Article 20 of the Tax Code will be removed from the draft law, while participation interests got through the exercise of these rights, worth up to 100,000 lei, will not be included in the calculation base for social insurance contributions and mandatory health insurance premiums.

The government also proposed a string of adjustments resulting from the examination of the draft law by parliamentary committees. Thus, the vice tax will be reformulated and will apply exclusively to gambling: 6 per cent of deposits made by individuals and 25 per cent of the gross income of the state monopoly operator and its partner.

In addition, dividends obtained abroad by resident individuals will be taxed at a rate of 8 p[er cent, while the reduced 8-per cent VAT rate will apply to milk and dairy products classified under tariff headings 0402 and 0403.

A fallback solution will be established for property tax: if the decision of the local public authority is missing or has been annulled, the minimum rates provided by law will apply.

The proposals that were not supported were assessed based on their impact on the budget, the coherence of tax policy and compatibility with European Union legislation.

The opinion approved by the government preserves the concept of the draft law and includes the proposals considered to have a clear social impact. The document will be submitted to parliament for consideration.