@David, my understanding is the Cabinet already voted that they didn't agree with the higher 3.2M threshold (so their opinion on the law registered in parliament) due to EU requirements limiting the ceiling for voluntary registration at 85,000 eur - hence the 1.7M threshold proposed. I've found some tables suggesting France is above this for some categories as is Germany.
Does AIM or other business groups have an opinion and how it might relate to EU harmonization?
Hi Frank, yes you are right - I've updated the phrasing there to make it more clear that the 1.7 was a counterproposal from the government.
I don't believe AIM has taken any position on this issue. Most member companies are large enough to be VAT payers and as such would probably oppose the 3.2M number.
Personally, I think that setting this number too high creates serious moral hazard. Companies that were very competitive the day before they cross the threshold can have serious problems the day after if they plan poorly - which results in a move to evade taxes. At the same time an inflation adjustment was overdue.
I think there are 2 real issues at play though:
1) Admin / complexity - companies under the threshold have *VASTLY* simpler reporting requirements. I would happily support a 0 lei threshold for all companies if it was as easy to run a VAT paying company as a non-VAT payer. The real tax here is time and admin costs.
2) Who pays taxes? Moldova's tax system is extremely regressive by design. Letting this threshold slip with high inflation only exacerbates that. I have a piece planned on the topic of taxes more generally (including the new fight over real estate valuations) but that'll have to wait for another day :)
@David, my understanding is the Cabinet already voted that they didn't agree with the higher 3.2M threshold (so their opinion on the law registered in parliament) due to EU requirements limiting the ceiling for voluntary registration at 85,000 eur - hence the 1.7M threshold proposed. I've found some tables suggesting France is above this for some categories as is Germany.
Does AIM or other business groups have an opinion and how it might relate to EU harmonization?
Hi Frank, yes you are right - I've updated the phrasing there to make it more clear that the 1.7 was a counterproposal from the government.
I don't believe AIM has taken any position on this issue. Most member companies are large enough to be VAT payers and as such would probably oppose the 3.2M number.
Personally, I think that setting this number too high creates serious moral hazard. Companies that were very competitive the day before they cross the threshold can have serious problems the day after if they plan poorly - which results in a move to evade taxes. At the same time an inflation adjustment was overdue.
I think there are 2 real issues at play though:
1) Admin / complexity - companies under the threshold have *VASTLY* simpler reporting requirements. I would happily support a 0 lei threshold for all companies if it was as easy to run a VAT paying company as a non-VAT payer. The real tax here is time and admin costs.
2) Who pays taxes? Moldova's tax system is extremely regressive by design. Letting this threshold slip with high inflation only exacerbates that. I have a piece planned on the topic of taxes more generally (including the new fight over real estate valuations) but that'll have to wait for another day :)