While Moldova is not a part of the European Union, Moldova still abides by some EU VAT policies like the “destination principle policy,” VAT threshold of 15%, and “reverse charge” policies. Under the destination principle, VAT is payable to the country of consumption. Under the reverse charge policy, VAT is paid only by the consumer and not the supplier. Therefore, regardless of where you’re located, you have to deal with Moldovan VAT rules if you have clients in Moldova.
The standard VAT rate in Moldova is 20%, which is administered by the Moldovan State’s Fiscal Department. In addition, Moldova’s Ministry of Finance publishes and updates information online related to the management of the Moldovan VAT system. If keeping up with all the VAT rules as a freelancer seems overwhelming, we’ve got you. This guide provides all the information you need to know about the Moldovan VAT system. Let's get started!
What are the different VAT rates in Moldova? The Moldovan government levies four VAT rates, and freelancers must charge the amount that applies to their products and services.
If your yearly turnover is equal to or exceeds 1.2 million MDL, VAT registration is mandatory. In addition to the VAT threshold, these are the other situations that determine when you are liable to register for VAT.
Non-resident freelancers providing services through electronic networks to Moldovan residents must register for VAT through the State’s Fiscal Department’s electronic system. You must first check if your products or services meet the VAT liability conditions.
As a freelancer, you need to report the VAT quarterly without exceeding the 25th day after the end of each quarter. However, based on your yearly turnover, the Moldovan State’s Fiscal Department can also ask you to report VAT monthly, quarterly, or annually.
Freelancers or self-employed individuals are expected to pay the VAT on their income as well. If you are a sole proprietor having to register for VAT in Moldova, you require the following documents:
VAT registration in Moldova can be completed by submitting the application forms and relevant documents to the State’s Fiscal Department electronically through the Ministry of Finance's website or directly by visiting their office. You will receive the VAT certificate with the VAT number in a few days.
After registration, you are liable to pay VAT to the State Fiscal Department every quarter.
Alternatively, you can hire an accountant (or agency) to handle your VAT returns and dealings with the Moldovan Fiscal Department. Xolo provides services like Xolo Go and Xolo Leap, which help with precisely this and any other VAT concerns you may have.
After you register for VAT, you should ensure that you charge the correct VAT rate from anyone you provide your services to. You are also liable to file VAT returns and pay the correct VAT amount owed to the Moldovan Fiscal Department every quarter. Moreover, you should maintain detailed VAT records and a VAT account.
In addition, you should:
As a freelancer, you should record every transaction you perform, electronically or physically, for around ten years. It is your responsibility to maintain proper documentation of your transactions in a legible, complete, and understandable format. You must also maintain a record of the following:
Additionally, you cannot claim VAT on records of items that have already been received and sent.
Feeling overwhelmed? Xolo’s got your back! We future-proof your records by automatically generating, sending, and storing all your invoices for you, so you won’t have to worry about ever missing any steps or misplacing any documents ;)
Simply put, we do the hefty work for you so that you can enjoy the freedom of freelancing. So connect with us immediately, and we’ll help you get your one-person business up and running in Moldova in no time!