Question of the day

The particularities of 2020 made a complex fiscal policy process conditional on the need to identify and promote measures focused on economic recovery in the aftermath of the pandemic crisis, the refinement of tax regulations through clear taxation rules based on fairness, simplicity and ensuring predictability of tax regulations.

In this respect, a systematisation and description of the most important amendments to the VAT tax and customs legislation is to be found in Law No nr.257/2020 on the amendment of certain legislative acts (hereinafter: Law No nr.257/2020).

2. VALUE ADDED TAX

2.1. Adjustment of the concept of ‘capital investment’ (Article 93 (18) of the Fiscal Code)

The new amendments propose to adjust the notion of capital investments laid down in Article 93 (18) of the Fiscal Code in order to extend the right to claim VAT refunds in connection with the capital repair of fixed assets. In this respect, the amendment aims at boosting investments and modernising fixed capital.

2.2 VAT scheme for the HORECA sector (Article 96 (b), eighth and ninth indents, of the Fiscal Code):

Law nr.257/2020 provides for the reduction of the VAT rate from 15 % to 12 % for the HORECA sector.

Respectively, the reduced VAT rate of 12 % is to be applied to accommodation services as well as to foodstuffs and/or beverages, excluding alcoholic beverages, carried out as part of the activities attributed under Section I of the Classification of Activities in the Economy of Moldova.

This measure aims at ensuring the support of companies in that sector, which is affected by the consequences of the pandemic crisis.

2.3 allowing deduction of the amount of VAT relating to goods procured which, in the course of business activity, were destroyed as a result of natural disasters (Article 102 (8)1) from CF)

Law No nr.257/2020 includes amendments proposing that the amount of VAT paid or to be paid on goods procured which, in the course of business activity, have been destroyed as a result of natural disasters be allowed to be deducted where those situations are confirmed.

2.4 amendments relating to the right to deduct VAT in the case of supplies of petroleum products (Article 102 (12) of the Fiscal Code)

The Law includes amendments according to which, if the tax invoice for the supplies of petroleum products is received by the purchaser (recipient) up to and including the 10th day of the month following that in which the supply documented by that tax invoice took place, the taxable person will be entitled to deduct the amount of VAT paid or to be paid on those goods used to carry out taxable supplies in the course of business in the month in which the supply took place.

2.5 abolition of exemption from VAT with right of deduction, excise duty, exemption from customs duty and fee for carrying out customs procedures for the import and/or delivery in the territory of the country of goods, services for investment assistance projects, financed from the loan account (Article 104 (c1), Article 124 (3) (b) of the Fiscal Code, Article 28 (n) of Law No 1380/1997.

The measure provides for the cancellation of tax and customs facilities on the import and/or delivery within the country of goods, services for investment assistance projects, financed from the account of loans or granted with a state guarantee, from the account of loans granted by international financial bodies (including the government’s share). Tax and customs facilities will apply to the import and/or delivery within the territory of the country of goods, services for investment and technical assistance projects financed by grants.

Important: Investment assistance projects financed from loans granted to the Government or granted under State guarantee, loans granted by international financial bodies (including the Government’s share) which are in the process of being implemented on 1 January 2021 will continue to benefit from the tax and customs facilities applied, in accordance with the legislative framework as at 31 December 2020.

2.6 amendments aimed at implementing the deadline for the tax liability relating to VAT in the case of imports of services (Article 109 (2) and Article 115(2) (b) of the Fiscal Code)

The purpose of the amendment is to remove the ambiguities and dual interpretations of the provision concerning the time limit for the tax liability and the date of payment of VAT on the importation of services. Thus, the amendment will ensure that it is expressly stipulated that that time limit is deemed to be no later than the time limit by which the economic operator is required to submit the VAT return, i.e. no later than the 25th of the month following the end of the tax period in which the importation of the services or their payment took place.

2.7 additions with rules relating to the status of VAT payer in the event of reorganisation (Article 112 (5) of the Fiscal Code)

Law No nr.257/2020 provides for Article 112 (5) to be supplemented so that it is to be established that the person to whom, in the context of the reorganisation, rights and obligations have been transferred by the reorganised undertaking holding the status of taxable person for VAT purposes, in the case of the practice of business activity, is deemed to be registered as a taxable person for VAT purposes from the date of the state registration of the new legal person or from the date of registration of the amendments in the instruments of incorporation of the legal person, depending on the type of reorganisation.

2.8 Details relating to the issue of a tax invoice for retail sale and the provision of services in specially equipped locations and in the context of electronic commerce (Article 117 (3) of the Fiscal Code)

The purpose of the proposed addition is to make the tax invoice more efficient and create certain conditions for businesses by expressly stating that, in the case of retail sales and the provision of services in specially equipped places and in the context of electronic commerce, the issuing of a tax invoice is not mandatory, except where it is requested by the purchaser within the deadline of the last day of the month in which the supply takes place, in accordance with the conditions laid down in that Article.

Source: monitor.fisc.md