Sole proprietor in Moldova: all taxes, rates, and mandatory payments
A sole proprietor is one of the most accessible forms of doing business. Simple registration and a relatively straightforward accounting system make it popular among small businesses, self-employed professionals, and beginner entrepreneurs.
At the same time, the taxation of a sole proprietor cannot be considered fully simplified. The entrepreneur participates in a general system of obligations: they pay income tax, social and medical contributions, and under certain conditions – value-added tax (VAT). If the sole proprietor hires employees, additional employer obligations also arise.
Income tax for sole proprietors
The income of a sole proprietor is taxed according to the rules established by Article 15 of the Tax Code of the Republic of Moldova.
The following rate applies:
12% of taxable income, meaning the difference between income and documented expenses.
This means that:
tax is not paid on turnover
expenses reduce the taxable base
proper accounting directly affects the final tax amount
The sole proprietor is required to submit an annual income tax return and pay the tax within the established deadlines, generally by March 25 of the year following the reporting year.
Mandatory social contributions (CNAS)
Depending on their status, a sole proprietor is required to pay state social insurance contributions.
For sole proprietors, a fixed annual contribution established by the Law on the State Social Insurance Budget applies.
In 2026:
22,878 lei per year
This contribution is mandatory and does not depend on the entrepreneur’s income.
It provides:
pension service record accumulation
access to social benefits
Even in the absence of profit, the payment obligation remains.
Mandatory medical insurance (CNAM)
A sole proprietor also participates in the mandatory medical insurance system.
For entrepreneurs who insure themselves independently (without an employer), a fixed insurance premium established by the law on mandatory medical insurance funds applies.
In 2026:
12,636 lei per year
Payment deadline – by March 31 of the reporting year (to apply standard conditions).
This payment grants access to medical services within the public healthcare system.
VAT: when the obligation arises
A sole proprietor does not automatically become a VAT payer.
The obligation arises upon reaching the established turnover threshold.
In 2026:
registration threshold – 1.7 million lei over the last 12 consecutive months
After exceeding this threshold, the entrepreneur is required to:
register as a VAT payer
maintain records of taxable transactions
submit regular tax reports
VAT rates
After registration, the rates provided by the Tax Code apply:
20% – standard rate
8% – for certain categories of goods and services
0% – for certain transactions, including exports
VAT affects cash flow and requires strict accounting.
If the sole proprietor has employees
When hiring employees, the sole proprietor becomes an employer and is required to:
calculate and pay social contributions
withhold and transfer income tax from salaries
calculate and transfer medical insurance contributions
In 2026, the following benchmarks apply to the private sector:
24%– social insurance contributions (paid by the employer)
9% – medical insurance (within the payroll system)
12% – income tax on employees’ salaries
General tax model for a sole proprietor
If all obligations are combined, the tax structure for a sole proprietor in 2026 looks as follows:
Mandatory payments:
12% – income tax
22,878 lei – social contributions
12,636 lei – medical insurance
Upon reaching the turnover threshold:
VAT (20%, 8%, or 0%)
If employees are hired:
24% – employer social contributions
9% – medical insurance related to payroll
12% – income tax on employees’ salaries
Key feature of a sole proprietor
The main difference between a sole proprietor and legal entities is the existence of fixed mandatory payments.
This means:
with low income, the tax burden is relatively high
as income grows, it becomes more balanced
Therefore, a sole proprietor is well suited for starting a business, but it requires careful financial planning.