The size of the preliminary withholding of income tax will increase from 7% to 12% from 2020

The size of the preliminary withholding of income tax will increase from 7% to 12% from 2020

This is provided for by draft amendments to the Tax Code, initiated by the Ministry of Finance. The Ministry proposes to maintain the flat income tax for individuals and legal entities introduced on October 1, 2018. At the same time, it was proposed to increase from 7% to 12% the size of the preliminary withholding of payments made in favor of the resident, according to Article 90 of the Tax Code. Thus, starting from 2020, every person engaged in entrepreneurial activities, with the exception of owners of business patents and persons engaged in independent activities, every representative office, permanent establishment, institution, organization, including any public authority and public institution, will deduct as part of the tax an amount of 12% of the payments made to the benefit of an individual, with the exception of owners of business patents, individual enterprises and peasant (farmer) households and other entities specified in the law. At the same time, it will not be preliminary withheld 12% of payments made in favor of an individual from income received by him/her in accordance with Articles 20, 88, 89, 901 and 91 on the alienation of motor vehicles, alienation of securities, as well as from the amount of agricultural land rent and / or alienation of the capital assets of individuals – citizens of Moldovan citizens in accordance with leasing, leaseback, pledge, mortgage agreements and / or in cases of compulsory alienation of capital assets, and in the case of liquidation of an economic entity - from non-cash liquidation payments. According to the Ministry of Finance, this measure is aimed at simplifying tax administration and ensuring tax compliance of individuals who are not engaged in entrepreneurial activities. This measure will bring 24 million lei of additional revenues to the 2020-state budget. // 26.07.2019 - InfoMarket.

News on the subject