Starting January 1, 2026, the threshold for mandatory VAT registration in Moldova has been increased from MDL 1.2 million to MDL 1.5 million. The change is established by Law No. 318 of December 29, 2025, published in the Monitorul Oficial, and applies as of 01.01.2026.
At first glance, the change may seem insignificant; however, in practice it affects financial planning, pricing models, and the tax burden of companies operating near the established threshold. For small and medium-sized businesses, this is a reason to review their approach to turnover control and to assess in advance the consequences of a potential transition to VAT.
At first glance, the change may seem insignificant; however, in practice it affects financial planning, pricing models, and the tax burden of companies operating near the established threshold. For small and medium-sized businesses, this is a reason to review their approach to turnover control and to assess in advance the consequences of a potential transition to VAT.
What exactly changed as of 01.01.2026
The essence of the change lies in increasing the turnover threshold, upon exceeding which a company is required to register as a VAT payer. Previously, this obligation arose upon reaching MDL 1.2 million; starting January 1, 2026, the applicable threshold is MDL 1.5 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 time during the year, not only at year-end.
For businesses, it is critical not only to know the established threshold but also 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.
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 time during the year, not only at year-end.
For businesses, it is critical not only to know the established threshold but also 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 decide whether the tax will be added to the price or included in it. In the first case, the price for the customer increases, which may affect demand. In the second case, VAT effectively reduces the business’s margin.
Second, pressure on cash flows arises. VAT must be paid within the established deadlines, regardless of whether payment has been received from the customer. When operating with deferred payments, this may lead to a temporary shortage of working capital.
Third, the cost structure changes. After VAT registration, part of the tax paid to suppliers may be offset or refunded, but only if documents are properly оформed and all conditions are met. This requires stricter control over primary documentation and contracts.
Finally, contractual relationships change. In the B2B segment, VAT-registered counterparties usually expect correct invoicing with VAT, 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 actual cash flows.
First, the pricing logic changes. After VAT registration, a company must decide whether the tax will be added to the price or included in it. In the first case, the price for the customer increases, which may affect demand. In the second case, VAT effectively reduces the business’s margin.
Second, pressure on cash flows arises. VAT must be paid within the established deadlines, regardless of whether payment has been received from the customer. When operating with deferred payments, this may lead to a temporary shortage of working capital.
Third, the cost structure changes. After VAT registration, part of the tax paid to suppliers may be offset or refunded, but only if documents are properly оформed and all conditions are met. This requires stricter control over primary documentation and contracts.
Finally, contractual relationships change. In the B2B segment, VAT-registered counterparties usually expect correct invoicing with VAT, 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 actual cash flows.
When voluntary VAT registration may be beneficial
Despite the increase in the threshold, avoiding VAT is not always the optimal solution. In some 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 VAT invoices is important;
- the business incurs significant expenses or investments for which input VAT can 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
Alongside the already adopted increase to MDL 1.5 million, at the end of 2025 a legislative initiative by members of parliament was considered – Draft Law No. 393 of December 4, 2025, which proposed raising the VAT registration threshold to MDL 3.2 million.
The Government supported the initiative only partially and proposed a compromise option of MDL 1.7 million. This position was justified by the Republic of Moldova’s commitments within the process of alignment with European Union legislation and the need to take into account the provisions of Directive 2006/112/EC, which sets the VAT exemption threshold at up to EUR 85,000 or the equivalent in national currency.
As a result, Law No. 318 of December 29, 2025 established the threshold at MDL 1.5 million as of 01.01.2026, representing an intermediate solution between the previously applicable level and the higher proposed amounts.
The Government supported the initiative only partially and proposed a compromise option of MDL 1.7 million. This position was justified by the Republic of Moldova’s commitments within the process of alignment with European Union legislation and the need to take into account the provisions of Directive 2006/112/EC, which sets the VAT exemption threshold at up to EUR 85,000 or the equivalent in national currency.
As a result, Law No. 318 of December 29, 2025 established the threshold at MDL 1.5 million as of 01.01.2026, representing an intermediate solution between the previously applicable level and the higher proposed amounts.
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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 helps avoid haste and reduces the risk of errors when changing the tax regime.
- analyze revenue dynamics and prepare a forecast for 2026 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 helps avoid haste and reduces the risk of errors when changing the tax regime.
Conclusion
The increase of the VAT registration threshold to MDL 1.5 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 tied to the overall direction of tax policy.
Under these conditions, the key factor is not waiting for further changes, but competent financial planning and readiness to adapt to the existing rules.
Under these conditions, the key factor is not waiting for further changes, but competent financial planning and readiness to adapt to the existing rules.