LAW OF THE REPUBLIC OF MOLDOVA

of December 15, 2017 No. 288

About modification and amendment of some legal acts

The Parliament adopts this organic law.

Art. I. - In the Tax code No. 1163/1997 (repeated publication: The official monitor of the Republic of Moldova, special release of February 8, 2007), with subsequent changes and amendments to make the following changes and additions:

1. In all text of the code of the word "depreciation" and "the added depreciation" to replace respectively with the words "depreciation" and "charged depreciation" in the corresponding case, except as specified, when this law provides other.

2. In Article 5:

in Item 36-2) of the word", the translator / the simultaneous interpreter" to exclude;

40) to add Item with the subitem c) of the following content:

"c) currency information system - hardware-software platform which design includes intermediate node for transfer in real time of financial and reporting information on the cash exchange currency transactions with physical persons performed in foreign exchange offices of licensed organizations on currency exchange by means of the protected digital channels, in information system of the State Tax Administration, providing protection of algorithms of work and data from unauthorized changes.".

3. In Article 6:

the last paragraph of Item g) parts (to state 9) in the following edition:

"The releases provided by Articles 33, 34 and 35, reduced VAT rate and exemption of the VAT tax benefits do not reckon with the deduction right.";

in part (the words "and the road charges (regarding collection for use of highways of the cars registered in the Republic of Moldova) are the regulating profitable sources" shall be replaced with words 10) "is the regulating profitable source".

4. The subitem and) Item 1) of Article 12 to declare invalid.

5. In subitems the first and second Item and) Article 15 of the word "31140 lei;" shall be replaced with words "33000 lei;".

6. In Item e) Article 18 of the word "in part (6)" shall be replaced with words "in part (7)".

7. In Article 19:

add Article with Item and-1) the following content:

"and-1) the cost of coupons on food in part in what it exceeds the deductible nominal value provided by part (1) article 4 of the Law on coupons on food No. 166/2017;";

the subitem first of Item e) to state in the following edition:

"-if the property is property of the employer - its costs determined by each object provided for use in the amount of 0,0373 of percent of cost basis for each day of use;".

8. In Article 20:

state the Item p-1) in the following edition:

"p-1) prizes in lotteries and/or sports bets;";

add Article with the Item p-2) of the following content:

"p-2) prizes in advertizing campaigns in part in what the size of each prize does not exceed the amount of the personal release established in part (1) Article 33;";

Item r) to state in the following edition:

"r) the financial support received by physical persons from reserve funds of the Government, bodies of local public authority, fund of social support of the population, and also from means of labor unions according to the provisions providing rendering such help. In case of the financial support provided from means of labor unions, the free limit constitutes the average monthly salary on economy predicted and annually approved by the Government on each worker for year, except for the help provided in case of death and/or disease of the worker or his relatives and cousins-in-laws of the first degree;".

9. In Article 24:

in part (4-1) words "Articles 26 and 27 depreciation deduction" shall be replaced with words "Articles 26, the 26-1 and 27 deduction of depreciation";

in part (the words "are charged depreciation (depreciation)" shall be replaced with words 6) "depreciation is charged", and after words "Articles 26," to add part with figures "26-1,";

part (15-1) to state in the following edition:

"(15-1) the deduction of the expenses incurred by the taxpayer during tax period in the form of financial assignments for activities of labor unions for use in the purposes established by the collective employment contract Is allowed. The limit of deduction of these expenses constitutes 0,15 of percent of the salary fund.";

add Article with parts (19-1) and (23) the following content:

"(19-1) the deduction of the expenses on provision of coupons incurred and determined by the employer on food Is allowed in the amount of, provided by part (1) article 4 of the Law on coupons on food No. 166/2017.";

"(23) the deduction of the expenses incurred according to the agreement on public and private partnership by the private partner in the objects constructed and donated to the state partner Is allowed.".

10. Parts (4-1) and (Article 24 to state 6) in the following edition:

"(4-1) V departure from provisions of this Article and Article 26-1 deduction of depreciation and expenses on maintenance, operation and repair of the cars used by persons specified in compound groups 112 and 121 of the Qualifier of the occupations of the Republic of Moldova subtracted according to this Section are allowed only on one car on each person specified in compound groups 112 and 121 of the Qualifier of occupations of the Republic of Moldova and only for the purpose of business activity.";

"(6) the deduction of the amounts paid for acquisition of property on which depreciation is charged and to which Articles 26-1, 28 and 29 are applied is not allowed.".

11. In Article 26:

part (to state 2) in the following edition:

"(2) Property on which depreciation is charged is the corporeal property used in business activity reflected in balance of the taxpayer according to the legislation which cost presumably decreases in process of physical and obsolescence and which time of service exceeds one year, and cost - 6000 lei.";

in the prolog of part (9) the words "Charge of Depreciation and Its Deduction" shall be replaced with words "Depreciation and its deduction".

12. Recognize Article 26 invalid.

13. Add the code with Article 26-1 of the following content:

"Article 26-1. Deduction of fixed asset depreciation

(1) the Size of deduction of charged depreciation of fixed assets is determined according to this Article and Article 24.

(2) Fixed assets on which depreciation is charged is the corporeal property used in business activity reflected in balance of the taxpayer according to the legislation which cost presumably decreases in process of physical and obsolescence and which time of service exceeds one year, and cost - 6000 lei.

(3) the Fixed assets which are subject to depreciation for tax purposes also investments into the fixed assets which are the subject of the agreement of operational leasing, property hiring, concession, lease, free use, subhiring are recognized. For the purposes of this part investments are understood as excess of the expenses connected with repair, improvements and to that similar actions concerning the corresponding fixed assets over the specified expenses permitted to deduction in tax period according to the procedure established in part (11).

(4) For the purpose of the taxation in case of financial leasing the leasing recipient is considered as the owner of the fixed assets received in leasing, and in case of operational leasing by the owner the lessor is. Calculation and deduction of fixed asset depreciation, being the subject of the agreement of leasing, are performed by the leasing recipient in case of financial leasing and the lessor in case of operational leasing.

(5) Fixed asset accounting for the purpose of the taxation is kept on each object separately.

(6) Fixed asset depreciation is charged since the month following after month of commissioning of fixed asset with use of straight-line depreciation method. The size of fixed asset depreciation which is subject

to deduction, it is determined by multiplication of cost of fixed assets by the corresponding norm of depreciation provided by part (7).

(7) the Depreciation rate of each fixed asset is determined as the relation of 100 percent and useful life of the fixed asset established by the Government.

(8) the Depreciation and its deduction on content of the car are performed as follows:

a) at the cost of car up to 200000 lei the charged depreciation is subtracted in complete size proceeding from car cost;

b) at the cost of car over 200000 lei the deduction is limited to the depreciation amount added proceeding from the cost of the car, equal 200000 lei. This provision is not applied to automobile

the cars used as fixed assets in the main activities representing rendering services which depreciation is component of cost of sales.

(9) in case of alienation of the car specified in Item b) parts (8), the income or loss estimated as difference between the amount of the means received as a result of alienation of the car and its cost basis is recognized the income or loss in that tax period in which alienation took place. Cost the basis of the car represents the car cost reduced by the amount of charged depreciation.

(10) the Deduction of repair expenses of property is performed according to National accounting standards.

(11) the Expenses connected with the running or capital repairs of the fixed assets which are not corresponding to part (2), are allowed to deduction within 15 percent of the estimated amount of property hiring, lease or concession spent throughout tax period, and in case of the expenses connected with repair of means of the international air transport - in the amount of 100 percent of the estimated payment amount of operational leasing brought during tax period. For the purposes of this part under the fixed assets which are not corresponding to part (2), the fixed assets used by business entity in its business activity according to the lease, property hiring, operational leasing, concession on expenses according to which specified agreement are incurred by the lessee, the employer, the leasing recipient or the concessionary are understood.

(12) the deduction of fixed asset depreciation, received gratuitously is not allowed, except cases when their cost is included in the leviable income of the taxpayer.

(13) in case of partial financing of acquisition of fixed assets from the sources constituting the free income, depreciation is charged on the part suffered by the company.

(14) In departure from parts (12) and (13) the amount of the subsidies received as a result of implementation of investments by acquisition of fixed assets at the expense of own means does not influence the extent of cost basis of fixed assets.

(15) For the purpose of the taxation the difference of revaluation of fixed assets is not recognized.

(16) Cost the basis of fixed assets is adjusted according to the procedure, established by the Government.

(17) Accounting and depreciation of fixed assets for the purpose of the taxation are performed according to the provision approved by the Government.

(18) the Cost of again acquired fixed assets consists of the cost of their acquisition, and also of all expenses connected with their acquisition including shipping charges, to installation and insurance, the percent paid or added prior to operation of object. The cost of the fixed assets relating to the property created by own efforts includes all taxes (duties) and charges, except for the value added tax which is deductible expenses and payments of percentage charges for these fixed assets for the entire period prior to their operation.".

14. In Article 27:

in Item b) parts (the words "with wear-out;" shall be replaced with words 10) "with complete depreciation;";

part (to state 12) in the following edition:

"(12) the deduction of fixed asset depreciation, received gratuitously is not allowed, except cases when their cost is included in the taxable income of the taxpayer.";

add Article with parts (13) and (14) the following content:

"(13) in case of partial financing of acquisition of fixed assets from the sources constituting the free income, depreciation is charged on the part suffered by the company.

(14) In departure from parts (12) and (13) the amount of the subsidies received as a result of implementation of investments by acquisition of fixed assets at the expense of own means does not influence the extent of cost basis of fixed assets.".

15. Recognize Article 27 invalid.

16. In Article 271:

in part (words of "Articles 26 and 27" shall be replaced with words 1) "Articles 26, 26-1 and 27";

in part (the words "with Articles 26 and 27." shall be replaced with words 2) "with Articles 26, 26-1 and 27.".

17. State Article 27-1 in the following edition:

"Article 27-1. Special rules of deduction of expenses of residents of the information and technological parks connected with depreciation and repair of fixed assets

(1) In departure from Article 26-1 provisions the business entities who received resident status of the information and technological park within tax year have no right to deduction for tax purposes of depreciation expenses and repair of fixed assets in the corresponding tax year.

(2) the deduction of depreciation expenses and repair of fixed assets according to Article 26-1 is allowed to Business entities at whom according to the legislation on information and technological parks the resident status of the information and technological park is withdrawn for application of the tax regime set in this Section. The entrance cost of fixed assets on each property category equals for tax purposes book value of these fixed assets at the beginning of the month following after month in which the resident status of the information and technological park is withdrawn.".

18. In Article 28:

in the name of Article of the word of "non-material property" shall be replaced with words "intangible assets";

in contents of Article of the word of "non-material property" shall be replaced with words "intangible assets", and the word "taking into account time of its use by rectilinear method." - the words "with calculation of time of its use for straight-line method.

19. Part (articles 29 after the words "in case of allocation of land according to the decision of the Government" to add 5) with the words "or according to the decision of representative and authorized body of local public authority".

20. In Article 31:

part (to add 2) after words of "the microfinancial organizations" with the words "and persons performing activities for financial leasing";

in part (3) word "provision", to exclude;

part (to state 4) in the following edition:

"(4) the deduction is allowed to the Microfinancial organizations and/or persons performing activities for financial leasing:

a) the reserves intended for covering of possible losses from non-return of loans and default on interest payment on them which are determined according to regulations of the National commission on the financial market on classification of loans and forming of reserves for covering of the possible losses caused by non-return of loans and default on interest payment on them; and/or

b) the reserves intended for covering of the debt obligations connected with not recovery of leasing payments and default on interest payment on them at the rate to 5 percent of annual average remaining balance of debt obligations on agreements of leasing if these obligations are outstanding person which is not the affiliate of the taxpayer.";

parts (6) and (to recognize 7) invalid.

21. In Article 33:

in part (figures "10620" to replace 1) with figures "11280";

in part (figures "15840" to replace 2) with figures "16800".

22. In Article 34:

in part (figures "10620" to replace 1) with figures "11280";

in part (figures "15840" to replace 2) with figures "16800".

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