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INFORMATION OF THE MINISTRY OF FINANCE OF THE REPUBLIC OF MOLDOVA

of January 14, 2016 No. 14/3-07/7

About the correct application of some provisions of the Tax code as a result of the made changes by the Law No. 71 of 12.04.2015.

Proceeding from the changes made to the Tax code No. 1163-XIII of 24.04.1997 by means of the Law on modification and amendments in some legal acts No. 71 of 12.04.2015. (The official monitor of the Republic of Moldova, No. 102-104/170 from 28.04.2015), the Ministry of Finance represents note and to management to daily activities the following.

I. The law on modification and amendments in some legal acts No. 71 of 12.04.2015 since 1.05.2015 in the Tax code No. 1163-XIII of 24.04.1997 changed and brought new provisions on deduction of the expenses for the purpose of the taxation connected with business activity namely:

- deduction of depreciation and maintenance costs, functioning and repair of the cars used by persons specified in compound groups 112 and 121 of the Qualifier of occupations of the Republic of Moldova;

- deduction of the annual expenses incurred by the employer on fees of supplementary medical insurance of the employee;

- deduction of discounts for losses on assets and contingent obligations;

- deduction of any donations made by it within tax year on the charitable purposes and sponsorship.

Also the Law No. 71 of 12.04.2015 since 1.05.2015 in the Tax code brought limit on VAT amount, paid or subject to payment on maintenance, operation and repair of the vehicles used by persons specified in compound groups 112 and 121 of the Qualifier of occupations of the Republic of Moldova.

At the same time according to the Tax code:

- the tax procedure is applied in time and in the place of application if the law does not provide other (h (4-1) Art. 3);

- the tax period on the income tax is understood as calendar year upon termination of which the taxable income is determined and the tax amount which is subject to payment is estimated (h. (1) Art. 12-1);

- for legal entities the method of charges and for the physical persons performing business activity – cash method of accounting or method of charges is used in tax accounting (h. (1) Art. 44);

- tax period on the VAT calendar month since first day of month is considered (h. (1) Art. 114).

Thus, in determination of the tax liabilities on the income tax for the period 2015 economic agents will apply the existing tax legislation until the end of the period to the income tax, except cases when the law provides other.

Respectively, provisions of the Tax code on deduction of the expenses connected with implementation of business activity in edition of the Law No. 71 of 12.04.2015 will extend to all tax period of 2015.

Besides, prediscretion of the Tax code on limit of VAT amount paid or subject on maintenance, operation and repair of the vehicles used by persons specified in compound groups 112 and 121 of the Qualifier of occupations of the Republic of Moldova are applied to payment since 1.05.2015 - tax period on the VAT, year in which the Law No. 71 of 12.04.2015 became effective.

Further features of application of the specified regulations are given.

1. About application of rules on provision of the right to deduction of expenses and movement of the VAT amount of the account relating to content, operation and repair of the vehicles used by persons specified in compound groups 112 and 121 of the Qualifier of occupations of the Republic of Moldova

According to the Tax code (in edition of the Law No. 71 of 12.04.2015):

- division – the structural unit of the company, organization or organization (branch, representation, department, department, shop, warehouse, etc.) located outside their main location which performs some functions of the company, organization or organization (item 29 of the Art. 5);

- in departure from provisions of this Article, Art. 26 and 27, the deduction of depreciation and maintenance costs, functioning and repair of the cars used by persons specified in compound groups 112 and 121 of the Qualifier of the occupations of the Republic of Moldova subtracted according to this Section is allowed on machines for each division of business entity, including its head office (h (4-1) Art. 24);

- the VAT amount paid or which is subject to payment on maintenance, operation and repair of the vehicles used by persons specified in compound groups 112 and 121 of the Qualifier of occupations of the Republic of Moldova is subject to offsetting only for one car on each division of business entity, including its central office. The VAT amount paid or which is subject to payment, on maintenance, operation and repair more than one vehicle, used by persons specified in compound groups 112 and 121 of the Qualifier of occupations of the Republic of Moldova is not subject to offsetting and belongs on costs or expenses (h. (11) Art. 102).

At the same time, according to the Qualifier of occupations of the Republic of Moldova approved by the Order of the Ministry of Labour, Social Protection and Family No. 22 of 3.03.2014, the specified employee categories of minor groups 112 and 121 include:

Integrated 
group

Subgroup

Compound 
group

Basic 
group

Name 
 

1

 

 

 

Legislators, members of executive bodies, other responsible officials and heads of bodies of public management, heads and senior officials of the companies

 

 

112

 

CEOs, chief executives and other heads

 

 

 

1120

CEOs, chief executives and other heads

 

12

 

 

Executive and commercial heads

 

 

121

 

Executive heads

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