Because freelancers are not Solar Staff's employees and we don't pay taxes on their payouts, they must declare any income received via Solar Staff by themselves.
To successfully declare the income received via Solar Staff in the Republic of Moldova (Moldova), one is required to:
Moldova taxes its residents on their worldwide income, while non-residents are taxed on their Moldovan-source income only.
An individual is considered a resident of Moldova if they meet one of the following criteria:
An individual has a permanent residence in Moldova, even if during the year they are on treatment, studying, or traveling on business abroad (with some exceptions).
An individual is physically present in Moldova for a period exceeding 183 days during a calendar (fiscal) year.
Tax ID number
The state identification number of a natural person (IDNP) is the main official identifier of an individual on the territory of Moldova, and is mandatory for the payment of taxes in the country. The IDNP is assigned to Moldovan citizens at birth (with data entered in the State Register of Population), to persons registering to carry out independent activities, or to those crossing the Moldovan state border.
The IDNP is indicated on the back of the identity card (or in the residence permit / foreign passport if no national identity card is available). It consists of 13 digits or matches a foreign citizen’s or stateless individual’s ID document number. The availability and validity of the IDNP can be checked online. The IDNP assigned to non-residents may have a different composition (learn more).
The state identification number of an organization (IDNO) or fiscal code is an official identifier used for legal entities and individual entrepreneurs, and certifying that they are registered in the State Register and with the State Tax Service. The IDNO also consists of 13 digits, and its availability and validity can also be checked online.
The VAT Number (VAT) is a 7-digit identifier used for value-added tax purposes, with an optional prefix MD (e.g., MD9234564). It can be obtained only when registering as a VAT payer (learn more).
Taxes and contributions payable by freelancers
Tax obligations depend on the freelancer's status and/or fulfillment of certain conditions. Moldova has two tax status options for Solar Staff users to choose from:
Read on for more details.
The status of an individual (persoane fizice) does not require any special registration and applies to employed individuals and freelancers alike. Individuals are required to pay the following taxes and contributions:
Income tax is calculated and paid at a flat rate of 12%. Income in foreign currency is converted into Moldova's national currency at the official exchange rate of the Moldovan leu (MDL) as at the day of the transaction. The taxable income is calculated as the gross income reduced by the amount of any available deductions. When calculating the income tax, taxpayers may claim the following deductions (see the FAQ):
A personal deduction of MDL 27,000 per year, if the annual taxable income is less than MDL 360,000 (except for some types of income listed in Art. 90.1, Chapter 15 of the Tax Code of the Republic of Moldova (Tax Code of Moldova)) or less than MDL 31,500 per year for certain taxpayer categories (Clause 2, Art. 33, Chapter 4 of the Tax Code of Moldova).
An additional deduction:
In the amount of MDL 19,800 MDL per year for the spouse (provided that the spouse does not benefit from a personal deduction).
In the amount of MDL 9,000 per year for each dependant (or MDL 19,800 per year for persons with disabilities).
A deduction of contributions to the Population Support Fund, towards compulsory health insurance, and to the state social security budget made during the year (Art. 36 of the Tax Code of Moldova).
Income tax returns. A single income tax return of an individual (CET18 Form, Declarația persoanei fizice cu privire la impozitul pe venit) shall be filed annually before April 30 of the year following the reporting year. See filling instructions here. It can be submitted in hard copy (either in person or by mail), in electronic format using available information resources, or via an email to the State Tax Service (Serviciul Fiscal de Stat), and is required to comply with the electronic signature requirements. The income tax due is required to be paid online by the same deadline.
Learn more about income tax returns (Declarație electronică pentru persoane fizice) and payment (Achitarea on-line a impozitelor și taxelor de către persoanele fizice-cetățeni).
Compulsory health insurance involves the purchase of an insurance policy covering a calendar year (in 2023, the cost was MDL 2,028). The payment for the policy is due by March 31 and can be made in person at any post office, bank, National Health Insurance Company office, or online through MPay, Moldova's public e-services portal. Policyholders are not required to file any reports on health insurance contributions. Liability: failure to make payment by the deadline may result in a multiple-fold increase in the policy cost, and the absence of a health insurance policy is considered an administrative offense carrying a fine ranging from MDL 500 to MDL 1,250.
Officially employed taxpayers are only required to make contributions based on their wages, with no requirement to purchase a health insurance policy.
Social security contributions are made in a fixed amount of MDL 14,700 per year (as set for 2023) and are mandatory. They are required to be paid at the minimum rate of MDL 1,225 per month before the 25th day of the month following the reporting month.
Reporting: A report on the calculation of mandatory state social security contributions and the nominal recording of insured persons in the public social insurance system (CAS18-AN Form, Darea de seamă privind calcularea contribuțiilor de asigurări sociale de stat obligatorii și evidența nominal a asiguraților în sistemul public de asigurări sociale) shall be filed online annually before January 15 of the year following the reporting year. See filling instructions here.
Residents who have no outstanding debts to the state budget may allocate 2% of their paid personal income tax (a percentage allocation) to non-profit organizations engaged in socially beneficial activities.
An individual entrepreneur (antreprenor individual) is an individual registered in accordance with the established procedure and engaged in entrepreneurial activities without forming a legal entity.
To register as an individual entrepreneur, individuals are required to arrange an appointment and visit the Public Services Agency (Agenția Servicii Publice), where they need to provide the following documents:
Personal identification document (passport).
Document confirming the payment of the registration fee (payment can be made to the state registration authority through MPay or by bank transfer).
Upon registration, an individual entrepreneur is assigned an identification number (IDNO).
When earning income via Solar Staff, individual entrepreneurs in Moldova have the option to choose from among the following tax regimes:
Read on for more details.
General taxation regime
The general taxation regime is the default regime that requires mandatory accounting and entails the payment of the following taxes and contributions:
Income tax at the rate of 12%. Taxable income from entrepreneurial activities is considered the income earned during one calendar year minus the expenses incurred in connection with the entrepreneurial activity, as well as any losses (which can be carried forward for up to five (5) years).
The income tax reporting and payment requirements depend on whether the individual entrepreneur meets one of the following criteria:
Individual entrepreneurs whose average annual number of employees throughout the tax period does not exceed three (3) individuals and who are not registered as VAT payers (according to Part 8, Article 92 of the Tax Code of Moldova) are required to file a Single Tax Return (UNIF21 Form, Declaraţia unificată) online (see filling instructions here).
The submission deadline is no later than March 25 of the year following the reporting year. The income tax due is required to be fully paid by the same deadline. Quarterly advance payments are also due no later than the 25th day of each third month of the current tax period in the amount of 25% of either the total estimated income tax for the current year or the amount of tax for the previous year.
Value-added tax (VAT) is calculated at a rate of 20% and is mandatory only for individual entrepreneurs who are registered as VAT payers and have an obligation to pay this tax. See the FAQ on VAT.
An individual entrepreneur is required to register as a VAT taxpayer if their 12-month income exceeds MDL 1.2 million (excluding supplies exempt from VAT without the right to deduct and supplies not subject to taxation). Individual entrepreneurs with income below the threshold amount may choose to register voluntarily.
The registration is accomplished by submitting an application for VAT payer registration (Cerere de înregistrare în calitate de plătitor al TVA) before the end of the month in which the income threshold was exceeded (voluntary registration can be done at any time). The State Tax Service issues a certificate of VAT payer registration, which includes the taxpayer's details, registration date, and VAT number (numarul de inregistrare TVA).
VAT accounting and reporting. VAT reporting is based on VAT invoices. VAT payers are required to issue VAT invoices and keep VAT records and books in compliance with the legislation.
Additional obligation. Taxpayers with an assigned VAT number are required to register their VAT invoices for amounts exceeding MDL 100,000 in the general electronic register of VAT invoices within ten (10) days after issuing those invoices.
VAT returns shall be submitted electronically on a monthly basis before the 25th day of the month following the reporting month. The VAT due is required to be paid by the same deadline.
Special taxation regimes
Patent taxation regime
The patent taxation regime is a special taxation regime that enables individual entrepreneurs to conduct their activities based on a patent, without hiring employees or obtaining specific licenses. An entrepreneurial patent (patenta de întreprinzător) is a personal state certificate issued by the State Tax Service (Serviciul Fiscal de Stat) and certifying the individual entrepreneur's right to engage in the type of activity specified in the patent for a certain period of time.
The patent taxation regime is subject to eligibility limitations based on the types of activities (the full list of eligible activities is specified in the Appendix to the Law on Entrepreneurial Patent) and the income threshold, which shall not exceed MDL 300,000 over a consecutive 12-month period.
Under this regime, there is no obligation to maintain accounting records or submit financial and tax reports and returns.
Furthermore, patent holders are not required to register as VAT payers.
The registration process for the patent regime is simplified and can be completed within three (3) days by submitting an application to the State Tax Service at the place of residence or the intended place of entrepreneurial activity. The patent is issued for the period of time specified in the application and can be extended for one month or a longer period as requested by the applicant. The application for issuance/extension of the patent shall be accompanied by the following documents:
Document confirming the patent holder's authority.
Document confirming the payment of the patent fee in the amount depending on the term of the patent.
Documents confirming the payment of state social security contributions for the entire intended patent term or documents confirming exemption from such contributions.
Documents confirming the insured person's status in the mandatory health insurance system or documents confirming exemption from the health insurance contribution.
Copy of a diploma or other educational document confirming the required qualification for engaging in certain types of activities.
The patent fee amount may vary depending on the intended locality of entrepreneurial activity. It covers the personal income tax and certain contributions. Importantly, the payment for the patent shall be made prior to submitting the application.
Mandatory health insurance and social security contributions shall be made at a fixed rate, following requirements similar to those applicable to individuals (other than individuals with disabilities and retirees).
Information Technology Park (IT Park)
The MITP taxation regime is subject to eligibility limitations and applies only to one or several of the following eligible activity types (learn more):
Custom software development (as per client requirements)
Computer game production
Development of other software solutions
Computer system management and operation
Data processing, web page administration, and associated activities
Operation of web portals
IT consulting services
Other IT activities
Additionally, the primary activity is required to generate at least 70% of the sales revenue earned by the MITP resident (individual entrepreneur).
See all patent eligibility requirements here.
The MITP resident status may be obtained by signing an agreement regarding the activity in the Park and registering in the Register of Park Residents. A special taxation regime will apply starting from the month that follows the signing of the agreement (learn more about the registration process here).
Being a MITP resident entails the payment of the following taxes and fees:
A single tax of 7%, which covers corporate income tax, personal income tax, mandatory health insurance and social security contributions, local levies, and other types of payments. The single tax is payable at a rate of 7%, and its minimal amount shall not be less than 30% of the average monthly salary.
Tax returns. The MITP residents are required to file single tax returns (IU17 Form, Declarația cu privire la impozitul unic) on a monthly basis before the 25th day of the month following the reporting month (see filling instructions here).
The tax due is required to be paid by the same deadline.
Value-Added Tax (VAT) is not covered by the single tax, so once an individual entrepreneur becomes a VAT taxpayer (similar to the general taxation regime), they incur VAT payment and reporting obligations.
VAT returns shall be filed electronically on a monthly basis before the 25th day of the month following the reporting month. The VAT due is required to be paid by the same deadline.
A resident fee of MDL 86 (as set for 2023) is payable for the month of registering as a MITP resident, with the subsequent monthly fee amount set based on the sales volume and other factors (the fee is calculated according to the formula stipulated in Government Decision (GD) 1144/2017; the fee calculator is available here).
MITP residents are also required to file the following statistical reports:
Results of annual audits by an accredited audit organization to be submitted before April 30 of the year following the reporting year.
If you have any questions, get in touch via the chat in your Solar Staff account or email us at [email protected].