Tax on property income in Moldova
August 16, 2017
Effective Tax Rate on Rental Income
|Click here to see a worked example|
Global Property Guide research
Nonresidents in Moldova are taxed only on their income from Moldovan sources. Married couples are taxed separately. Nonresidents are not entitled to personal allowances.
Applicable tax rates and calculation of tax base of income of nonresidents depend on the source of income.
Business and employment income earned by nonresidents is subject to progressive income tax rates.
INCOME TAX 2015
|TAXABLE INCOME, MDL (€)||RATE|
|Up to 29,640 (€1,347)||7%|
|Over 29,640 (€1,347)||18% on all income over €1,347|
|Source: Global Property Guide|
Investment income and all other items of income are mostly subject to a flat 10% withholding tax.
Nonresidents earning rental income in Moldova are liable to pay tax at a flat rate of 10%. The tax is levied on the gross amount, and withheld by the tenant.
Capital gains from the sale of real estate property earned by a nonresident are taxed at a flat 10% withholding tax. The adjusted cost base of the property and related transaction costs are deductible when calculating the taxable capital gains.
If the property was owned by the taxpayer for at least 3 years before selling the property, it is considered that the property was used as his principal residence. In this case, the taxable capital gain may be reduced by MDL10,000 (€623) for each year after 01 January 1997, during which the taxpayer owned the property and used it as a principal residence.
Property tax is levied on the estimated value of properties in villages, and the estimated market value of properties located in cities and municipalities. The tax rates range from 0.05% to 0.30%, and the actual tax rates are set annually by the local authorities.
The applicable tax rate for properties located in villages is 0.10%. In municipalities and cities, the rates may vary between 0.02% and 0.25% for municipalities and cities. The property tax rate in Chisinau is 0.02%.
A specified value of the property is exempt, in Chisinau it is MDL380,000 (€17,273). The rate is increased by a particular multiplier, for the excess of the size of the property over 100 square meters. The rate is 0.02% in Chisinau.
Land tax is also levied by local authorities annually. Land owners are liable to pay this tax and determination of the tax liability depends on the land location, fertility and purpose.
Income and capital gains earned by companies are taxed at a flat rate of 12%.
Taxable income is calculated by deducting income-generating expense from gross income. Taxable capital gains are calculated by acquisition costs and related expenses from of market value or selling price. For sale of capital assets that are not considered to be part of the company’s ordinary activities, only 50% of the net capital gains are taxable.