Rental Property Taxes in Chișinău: A Guide for Investors & Landlords

Published on: February 03, 2025

Investing in rental property in Chișinău, Moldova, can be a profitable venture, but understanding the tax obligations is essential to ensure compliance with local laws. This article provides an overview of how rental income is taxed in Moldova, key tax rates, and obligations for landlords in Chișinău.

1. Taxation of Rental Income

In Moldova, rental income earned by individuals is subject to taxation under the country's tax laws. Both Moldovan residents and non-residents earning rental income from property in Chișinău must adhere to these regulations.

1.1 Personal Income Tax (PIT) on Rental Income

Rental income earned by individuals is subject to a 7% fixed tax rate on gross rental revenue. Unlike other forms of income, this tax rate applies regardless of the landlord's total income from other sources.

• The tax is levied on the total rental amount, with no deductions for expenses or depreciation.

• The landlord is responsible for declaring and paying the tax.

2. Taxation for Legal Entities

If a rental property is owned by a company, the rental income is taxed as part of the corporate profits. The applicable corporate income tax rate is 12%. Unlike individuals, businesses can deduct relevant expenses such as maintenance, repairs, and depreciation.

3. Reporting and Payment Obligations

3.1 Tax Registration

If you are renting out property as an individual, you must register your rental agreement with the Moldovan Tax Service (Serviciul Fiscal de Stat - SFS). This is a legal requirement, and failure to do so can result in fines.

3.2 Tax Declaration and Payment

• The rental tax is declared and paid monthly, by the 25th of the following month.

• Payments are made directly to the tax authorities through bank transfer or online payment systems.

3.3 Rental Agreement Registration

To be legally compliant, landlords must sign and register rental agreements with the local authorities. This helps to ensure transparency and protects both the landlord and tenant.

4. Penalties for Non-Compliance

Failure to declare rental income or pay taxes can lead to significant penalties, including:

• Fines and late payment interest charges.

• Additional audits or legal actions by the tax authorities.

• Potential criminal liability in cases of intentional tax evasion.

5. Value-Added Tax (VAT) Considerations

Rental income from residential properties is not subject to VAT. However, if a legal entity leases commercial properties and exceeds the VAT registration threshold (1.2 million MDL per year), VAT at a standard rate of 20% may apply.

6. Deductions and Allowances

Unlike corporate landlords, individuals cannot deduct maintenance, repairs, or depreciation costs when calculating rental income tax. However, property owners may benefit from general income tax deductions depending on their overall tax situation.

7. Tax Benefits and Exemptions

While there are no specific exemptions for rental income taxation, Moldova has a relatively simple and low taxation system compared to other European countries. Landlords who properly register their rentals can ensure full legal compliance while benefiting from a flat tax rate.

Conclusion

Owning and renting property in Chișinău can be financially rewarding, but landlords must fulfill their tax obligations to avoid penalties. By understanding the 7% rental tax rate for individuals, registration requirements, and payment deadlines, landlords can ensure compliance and maintain a steady stream of legal rental income.

For the most accurate and up-to-date tax information, consulting a tax advisor or the Moldovan Tax Service (SFS) is always recommended.

Disclaimer: This information is based on today's regulations and is subject to change if the government intervenes. It is solely provided by CVS.md to potential investors and current legal property owners.