From 2023, the reinvested profits of SMEs are not subject to income tax.
Minister of Economic Development and Digitalization Dumitru Alaiba, on his page in one of the social networks, explained in detail the causes and impact of the so-called income tax reform for small and medium enterprises, which was launched this year. Thus, within 3 years, small and medium-sized enterprises of Moldova will pay income tax only in case of distribution of profits in the form of dividends. If the funds remain in the company's account, then the tax will not be applied. According to Dumitru Alaiba, a similar reform was introduced in 1999 by Estonia, which today is a "paradise" for small businesses and investors, and similar measures were taken in Latvia and Georgia. The reform is an anti-crisis measure aimed at supporting SMEs. It is aimed at creating conditions for investment, stimulating the reinvestment of profits, providing additional liquidity (at least 3 billion lei per year). “Earlier, entrepreneurs paid 12% annually in the form of income tax. After that, they had a choice of what to do with the remaining money - use it for development, or distribute it as dividends to the founders. For that part of the profit, which they then distributed as dividends, they paid another 6%. Thus, the income tax was 12%, and the effective tax on dividends was 18% (12% + 6%). The reform we implemented last year makes the following change: income tax of 12% is paid only if profits are distributed as dividends to the founders. If the money remains in the company, this income is not taxed,” Dumitru Alaiba emphasized. According to him, the reform will stimulate investment and help expand business, increase wages, create new jobs and increase the competitiveness of domestic producers, etc.// 11.04.2023 — InfoMarket.
