Higher tax exemptions, revised VAT and new excise duties: 2027 tax policy draft reaches Parliament

Tax and customs legislation could be simplified, while several taxes and tax incentives are set to be revised. The parliamentary committee on economy, budget and finance will propose that Parliament examine in first reading the 2027 tax policy draft set by the Ministry of Finance. The document provides for an increase in the personal tax exemption, measures to stimulate investment, and changes to VAT and excise duty rates.

According to the draft, the personal exemption for individuals will increase from 29,700 to 40,020 lei. The Ministry of Finance says the measure aims to reduce the tax burden and increase households’ disposable income.

At the same time, the conditions for granting an income tax exemption on capital gains from the sale of a primary residence will be amended. The benefit would apply to individuals who have lived in the property for at least three years, provided it is their only residence, even if they were not domiciled at that address.

Another amendment provides that an income tax arrear of up to 100 lei will no longer prevent taxpayers from exercising their right to designate 2% of their income tax.

The draft also provides for a review of tax-exempt income, the rates applied to investment income, and the rules for determining capital gains. The rules on taxation of non-residents will also be adjusted.

For peasant farms, income tax would be aligned with the rate applied to individual enterprises. Thus, the rate would increase from 7% to 12%.

To stimulate investment, the draft provides for extending by 2029 the application of the zero rate on reinvested income or undistributed profit. At the same time, the turnover or total asset value threshold for companies to qualify would be increased from 100 million to 200 million lei.

Income tax on profits earned during the 2027–2029 tax years could be deferred until dividends are distributed or losses from previous years are covered.

The draft also provides for a review of the conditions applicable to taxpayers benefiting from the 4% tax rate. In addition, certain income tax exemptions granted to savings and loan associations, trade unions and employers’ organizations, as well as private educational institutions, would be eliminated.

Starting in 2027, an 18% tax rate is also proposed for income from financial and insurance activities.

The document provides for the introduction of a vice tax on participation in gambling and lotteries. Organizers would pay a 6% tax when funds deposited to top up gaming accounts are collected or when tickets are sold.

The draft also proposes significant changes to VAT. For goods and services in HoReCa sector, the rate would increase from 8% to 12%, although it would remain below the standard rate.

The 12% rate would also apply to livestock, crop and horticultural production, as well as to quinces and currants produced or imported into the Republic of Moldova.

By contrast, the reduced 8% VAT rate would be maintained for essential products, including bread, milk, fruit and vegetables, eggs and poultry meat.

For household consumption of natural gas, starting on April 1, 2027, a reduced 8% rate is proposed for consumption of up to 150 cubic meters per month per consumption point. Volumes exceeding this threshold would be taxed at the standard rate.

At the same time, the VAT exemption with the right to deduct would be maintained for electricity consumption covering the first 100 kWh per consumption point. According to the draft, these measures would enter into force after the end of the heating season.

For distance sales, the draft proposes taxing parcels valued at up to 150 euros. Starting October 1, a special VAT regime and a fee of 12 lei per parcel would be introduced.

In the area of excise duties, the authors propose taxes on nicotine-free liquids, energy drinks, certain non-alcoholic beverages containing sugar or sweeteners, and pyrotechnic articles.

For tobacco products, the excise duty would increase by 20% in 2027 and by 15% annually in each of the following two years.

Regarding tax administration, the draft provides for the automatic cancellation of arrears of up to 20 lei per economic classification.

The wealth taxation mechanism would also be simplified. A threshold of 4 million lei is proposed for the estimated value of real estate, with the 0.8% rate applying only to the amount exceeding this threshold.

The Ministry of Finance estimates that implementing the 2027 tax policy will generate an additional 5.1 billion lei in public budget revenues. Approximately 820 million lei of this amount would come from income tax and the vice tax, 1.6 billion lei from VAT, and 2.7 billion lei from excise duties.

The draft will be examined by Parliament in first reading. The proposed amendments will enter into force only after the law is adopted and published in the Official Journal.