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The document ceased to be valid since  August 10, 2018 according to Item 7 of Appendix No. 4 of the Order of the Government of the Republic of Moldova of July 11, 2018 No. 693

ORDER OF THE GOVERNMENT OF THE REPUBLIC OF MOLDOVA

of May 4, 1998 No. 490

About approval of the Regulations on procedure for separation of income gained by nonresidents from sources in the Republic of Moldova, and income gained beyond its limits

In pursuance of provisions of Article 73 of Chapter 11 of the Tax code N1163 XIII of April 24, 1997 on regulation of procedure for separation of income gained by nonresidents of the Republic of Moldova from different sources, the Government of the Republic Moldova DECIDES:

Approve Regulations on procedure for separation of income gained by nonresidents from sources in the Republic of Moldova, and income gained beyond its limits according to appendix.

 

Prime Minister of the Republic of Moldova

Ion Chubuk

Appendix

to the Order of the Government of the Republic of Moldova No. 490 of May 4, 1998

Regulations on procedure for separation of income gained by nonresidents from sources in the Republic of Moldova, and income gained beyond its limits

I. General provisions

1. This provision is developed according to Article 73 of Chapter 11 of the Tax code N 1163-XIII of April 24, 1997 and regulates procedure for separation of income gained by nonresidents of the Republic of Moldova from various sources.

2. Nonresidents of the Republic of Moldova are any foreign legal entities and physical persons, including individual which do not fall under the concept of resident given in article 12 of the Tax Code.

3. For the purposes of this provision taxpayers of the income tax are foreign legal nonresident persons who perform business activity in the Republic of Moldova through permanent mission.

4. The term "foreign legal entity" is understood as the company, firm, the company, financial and industrial group, holding and any other organizations formed according to the legislation of foreign states and also foreign legal entities - members of associations (associations, consortia) and other companies, not being legal entities.

5. The permanent mission of the foreign legal entity in the Republic of Moldova for the purposes of the taxation is understood as branch, department, office, the agency, any other permanent place of implementation of the activities connected with development and operation of natural resources, carrying out the works on construction, installation, installation, assembly, slip, equipment maintenance, with operation of gaming machines provided by contracts, sale of products from the warehouses located in the territory of the Republic of Moldova and belonging to foreign yuridicheskorm to person or leased by it and also rendering services and implementation of other types of activity on extraction of the income in the territory of the Republic of Moldova or abroad.

II. Income distribution on sources of their forming

6. On forming sources all income of the nonresident taxpayer is divided into income gained:

a) in the Republic of Moldova as a result of the business activity performed in Moldova;

b) outside the Republic of Moldova as a result of the business activity performed in other country.

7. The list of income groups of the legal nonresident persons received in the Republic of Moldova and beyond its limits is provided in articles 71 and 72 of the Tax Code.

8. The nonresident taxpayer performing activities in the Republic of Moldova through permanent mission is income tax payer on the gross incomes gained from sources of the Republic of Moldova, connected with permanent mission and reduced by the amount of deductions only of those expenses, losses and other payments which directly belong to this income.

9. In international treaties on avoidance of double taxation which participant is the Republic of Moldova in case of determination of the taxable income of permanent mission the deduction of the expenses incurred for the purposes of this permanent mission including management and total administrative expenses is allowed irrespective of, these expenses in Moldova where there is permanent mission, or beyond its limits are incurred. At the same time deductions of such expenses shall be documented.

10. Legal nonresident person for the purposes of the taxation shall keep separate account of gross incomes and expenses from the business activity performed both in the territory of the Republic of Moldova and beyond its limits.

11. If legal nonresident person performs activities not only in the Republic of Moldova and at the same time does not keep the separate account allowing to determine income gained from the activities performed by it through permanent mission the amount of gross income can be determined on the basis of the calculation approved by the taxpayer with the tax authority controlling its payments in the budget.

12. In each case for these purposes one of the following indicators is accepted:

specific weight of gross income from sales of products (works, services) in the Republic of Moldova in total of income of legal nonresident person from all its activities;

specific weight of the expenses connected with activities in the territory of the Republic of Moldova in the total amount of expenses of legal nonresident person;

specific weight of number of the workers performing activities in the territory of the Republic of Moldova in the total number of workers of legal nonresident person.

13. The procedure for income distribution of nonresidents - physical persons, including individual, on sources of forming is performed similar to the principle of separation of the income for legal nonresident persons provided in Item 12 of this provision.

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