LETTER OF THE MINISTRY OF FINANCE OF THE REPUBLIC OF MOLDOVA

of February 7, 2001 No. (10-13-02/1-690)7

ABOUT THE PROCEDURE FOR APPLICATION OF THE VAT IN CASE OF CHANGE OF THE TAX REGIME OF GOODS (PRODUCTS)

State tax authorities of the republic

The Ministry of Finance, generalizing all earlier these instructions for question of application of the VAT by provision or cancellation of privileges on VAT liability, for the purpose of management in practical work informs the following.

1. Procedure for application of the VAT on the goods (products) which turned from category of free VATes into category liable to VAT.

In case delivery of goods (products) is performed until change of tax regime, and payment after introduction change or on the contrary, then the VAT on these deliveries is not applied.

The VAT is applied only if receipt of payment from buyers and delivery of goods (products) to their address, are performed after changes of tax regime. At the same time, the business entity if is not subject of VAT liability shall be registered in tax body as the payer of the VAT according to requirements of Art. 112 of the Tax code.

With respect thereto, VAT amounts on remaining balance of raw materials, materials, on the incomplete and not sold finished goods (and also on goods purchased) which early according to the current legislation were carried on costs, shall be set off according to requirements of Art. 102 of the Tax code.

In case of calculation of the VAT on remaining balance of incomplete and finished goods it is necessary to divide the cost indicator characterizing the cost of remaining balance into two components:

- containing the VAT;

- not containing the VAT.

From the component of remaining balance containing the VAT, being guided by requirements of Art. 102 of the Tax code, it is necessary to calculate VAT amount.

For this purpose, economic agents shall draw up the act of removal of the specified remaining balance, as of date of change of tax regime.

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