The new rules are necessary in the context of recent changes to the Law on the VAT refund program, which simplify the procedure for farmers to access this system. The purpose of the changes is to improve the financial liquidity of agricultural producers.
According to the intention of the Moldovan authorities, the support to farmers will consist of two innovations. First, the share of VAT to be reimbursed will be increased and will amount to 40% of the amount of this tax to be withheld in the following tax period, indicated in the last submitted declaration (during the period of the VAT Reimbursement Program).
The second change is that the administrative burden is reduced by excluding the amount of land tax, income tax, mandatory social security contributions (paid by the employer) and mandatory health insurance contributions (as a share of the contribution paid by the employee) from the VAT refund calculation.
The implementation of these measures, according to the developers of the amendments, will reduce the tax burden on agricultural producers.
