At the beginning of 2026, a phased increase of the mandatory VAT registration threshold began in the Republic of Moldova. As of January 1, 2026, the limit was raised from MDL 1.2 million to MDL 1.5 million. Subsequently, Parliament approved an increase of the threshold from MDL 1.5 million to MDL 1.7 million, and the new amount has been applied since March 1, 2026.
In practice, the increase of the threshold expands the opportunities for small and medium-sized businesses to operate longer without mandatory VAT registration. This reduces the administrative burden and allows companies that are close to the previous threshold to plan turnover growth more flexibly without an immediate transition to a more complex tax regime.
At the same time, it is important for businesses to take the new level into account when forecasting revenue so that the decision to register is made consciously and does not become a consequence of a sudden exceedance of the threshold.
In practice, the increase of the threshold expands the opportunities for small and medium-sized businesses to operate longer without mandatory VAT registration. This reduces the administrative burden and allows companies that are close to the previous threshold to plan turnover growth more flexibly without an immediate transition to a more complex tax regime.
At the same time, it is important for businesses to take the new level into account when forecasting revenue so that the decision to register is made consciously and does not become a consequence of a sudden exceedance of the threshold.
What exactly changed as of March 1, 2026
The essence of the change lies in increasing the turnover threshold upon exceeding which a company is required to register as a VAT payer:
It is important to note that this does not refer to a calendar year, but to turnover generated over the last 12 consecutive months. This means that a company may exceed the threshold at any moment during the year, not only at its end.
For businesses, it is critical to continuously monitor turnover dynamics so that the transition to VAT does not occur unexpectedly and without preparation. Otherwise, the company risks facing accounting errors, improper documentation, and financial losses.
- previously – MDL 1.2 million;
- as of January 1, 2026 – MDL 1.5 million;
- as of March 1, 2026 – MDL 1.7 million.
It is important to note that this does not refer to a calendar year, but to turnover generated over the last 12 consecutive months. This means that a company may exceed the threshold at any moment during the year, not only at its end.
For businesses, it is critical to continuously monitor turnover dynamics so that the transition to VAT does not occur unexpectedly and without preparation. Otherwise, the company risks facing accounting errors, improper documentation, and financial losses.
Why the change in the VAT threshold is important for budgeting and financial planning
VAT affects a company’s finances through specific mechanisms that businesses encounter on a daily basis.
First, the pricing logic changes. After VAT registration, a company must determine whether the tax will be charged on top of the established price or included in it. If VAT is added to the price, the final cost for the client increases, which may affect demand. If the company maintains the previous final price by including VAT “within” it, its gross margin effectively decreases.
Second, pressure on cash flows arises. VAT must be paid to the budget within the established deadlines regardless of whether payment has been received from the client. When operating with deferred payments, this may create a gap between the accrued tax and the actual receipt of funds.
Third, the cost structure changes. This means that after VAT registration, the real cost of purchases for the company changes:
When a company is not a VAT payer, it purchases goods or services at a price that already includes VAT, and this tax becomes part of its expense. It cannot recover or offset it – therefore, the entire purchase amount is included in the cost of goods or services.
When a company becomes a VAT payer, the situation changes. If the supplier is also a VAT payer and properly issues an invoice with the tax separately indicated, the company has the right:
Finally, contractual relationships change. In the B2B segment, counterparties that are VAT payers usually expect proper issuance of invoices and acts with VAT separately indicated, which must also be taken into account during planning.
Therefore, for companies approaching the threshold, it is advisable to calculate in advance two scenarios for 2026 – operating without VAT and operating with VAT – and compare their impact not only on profit but also on cash flows.
First, the pricing logic changes. After VAT registration, a company must determine whether the tax will be charged on top of the established price or included in it. If VAT is added to the price, the final cost for the client increases, which may affect demand. If the company maintains the previous final price by including VAT “within” it, its gross margin effectively decreases.
Second, pressure on cash flows arises. VAT must be paid to the budget within the established deadlines regardless of whether payment has been received from the client. When operating with deferred payments, this may create a gap between the accrued tax and the actual receipt of funds.
Third, the cost structure changes. This means that after VAT registration, the real cost of purchases for the company changes:
When a company is not a VAT payer, it purchases goods or services at a price that already includes VAT, and this tax becomes part of its expense. It cannot recover or offset it – therefore, the entire purchase amount is included in the cost of goods or services.
When a company becomes a VAT payer, the situation changes. If the supplier is also a VAT payer and properly issues an invoice with the tax separately indicated, the company has the right:
- to include the VAT paid to the supplier as input VAT;
- to reduce by that amount the VAT it must remit to the budget.
Finally, contractual relationships change. In the B2B segment, counterparties that are VAT payers usually expect proper issuance of invoices and acts with VAT separately indicated, which must also be taken into account during planning.
Therefore, for companies approaching the threshold, it is advisable to calculate in advance two scenarios for 2026 – operating without VAT and operating with VAT – and compare their impact not only on profit but also on cash flows.
When voluntary VAT registration may be beneficial
Despite the increase in the threshold, avoiding VAT is not always the optimal solution. In certain cases, voluntary registration may be economically justified.
This is relevant if:
The decision on voluntary registration is always individual and should be made based on an analysis of the client structure, expenses, payment terms, and financial indicators.
This is relevant if:
- the company primarily works with VAT-registered clients for whom receiving invoices with VAT is important;
- the business incurs significant expenses or investments for which input VAT may be offset;
- turnover growth is expected during the year, and the company wants to avoid a sudden transition to VAT in the middle of the reporting period.
The decision on voluntary registration is always individual and should be made based on an analysis of the client structure, expenses, payment terms, and financial indicators.
The Government’s position: why the threshold of MDL 3.2 million was discussed and where MDL 1.7 million came from
At the end of 2025, a legislative initiative was registered — Draft Law No. 393 of December 4, 2025, which proposed increasing the VAT registration threshold from MDL 1.2 million to MDL 3.2 million. The authors of the initiative justified the proposal by the need to reduce the administrative burden on small businesses.
The Government supported the idea of increasing the threshold but did not agree with raising it to MDL 3.2 million. In its position, it stated that the Republic of Moldova is in the process of harmonizing its tax legislation with European Union law. In particular, it is necessary to take into account the provisions of Directive 2006/112/EC, which stipulates that the VAT exemption threshold must not exceed EUR 85,000 or the equivalent of this amount in national currency.
As a result, a phased decision was adopted: as of January 1, 2026, the threshold was increased to MDL 1.5 million, and as of March 1, 2026, to MDL 1.7 million. Thus, the final level of the threshold was established taking into account both proposals aimed at reducing the administrative burden and the requirements of harmonization with European standards.
The Government supported the idea of increasing the threshold but did not agree with raising it to MDL 3.2 million. In its position, it stated that the Republic of Moldova is in the process of harmonizing its tax legislation with European Union law. In particular, it is necessary to take into account the provisions of Directive 2006/112/EC, which stipulates that the VAT exemption threshold must not exceed EUR 85,000 or the equivalent of this amount in national currency.
As a result, a phased decision was adopted: as of January 1, 2026, the threshold was increased to MDL 1.5 million, and as of March 1, 2026, to MDL 1.7 million. Thus, the final level of the threshold was established taking into account both proposals aimed at reducing the administrative burden and the requirements of harmonization with European standards.
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What businesses should do right now
If a company’s turnover is approaching the established threshold, it is advisable already now to:
Such an approach allows businesses to avoid haste and reduce the risk of errors when changing the tax regime.
- analyze revenue dynamics and prepare a forecast with a monthly breakdown;
- assess the impact of VAT on pricing, margins, and cash flows;
- prepare in advance a plan for a possible transition: accounting, primary documentation, contracts, invoicing policy, and control of VAT obligations.
Such an approach allows businesses to avoid haste and reduce the risk of errors when changing the tax regime.
Conclusion
The increase of the VAT registration threshold to MDL 1.7 million reflects a cautious and phased approach by the state to tax changes. For businesses, this means that relief measures are possible, but they will be limited and aligned with the overall direction of tax policy.
Under these conditions, competent financial planning and readiness to adapt to the existing rules become key factors.
Under these conditions, competent financial planning and readiness to adapt to the existing rules become key factors.