IT companies operate in a fast-paced environment with global markets and remote teams, which places specific demands on accounting practices. Taxation regimes, intellectual property management, revenue distribution from SaaS models* – all these aspects require careful handling. In this article, we will explore the key accounting nuances in the IT industry and provide recommendations for efficient financial management.
*SaaS (Software as a Service) is a model where software is provided to users over the internet via subscription, without the need for installation on devices. All updates and maintenance are handled by the service provider.
Key features of accounting in IT companies
1. Choosing the right taxation regime
IT companies in Moldova can operate under one of two taxation regimes:
- The standard tax regime (the small and medium enterprises regime or the general taxation regime) – companies pay standard taxes, including: corporate income tax, social security contributions, mandatory health insurance premiums, payroll income tax, local taxes, etc.
- Flat tax for IT park residents – according to Law No. 77/2016, IT companies registered in an IT park pay a flat tax of 7% on revenue, which covers income tax, social and medical contributions, and certain local taxes.
2. International transactions and foreign currency operations
Many IT companies work with international clients and collaborate with freelancers worldwide. This involves:
- proper accounting of foreign currency transactions;
- compliance with transfer pricing rules in transactions with affiliated entities;
- correct recording of payments received in bank accounts and currency conversion.
3. Accounting for intangible assets
The IT industry relies heavily on intangible assets such as software, databases, patents, licenses, and trademarks. Proper accounting requires accurate valuation, amortization procedures, and financial reporting compliance.
According to Moldovan law, intangible assets are subject to amortization if used in entrepreneurial activity for more than one year. Expenses for development, acquisition, and modernization may be tax-deductible. IT park residents can apply special rules to reduce their taxable base by including amortization costs and software maintenance expenses.
According to Moldovan law, intangible assets are subject to amortization if used in entrepreneurial activity for more than one year. Expenses for development, acquisition, and modernization may be tax-deductible. IT park residents can apply special rules to reduce their taxable base by including amortization costs and software maintenance expenses.
Accurate accounting of intangible assets reduces the tax burden and ensures financial transparency, which is crucial when attracting investments and expanding to international markets.
4. Tax optimization strategies
IT companies have access to several tax optimization mechanisms, including:
- IT park residency status, which significantly lowers tax obligations.
- Application of the 0% VAT rate for exported services in accordance with tax legislation.
5. HR and payroll considerations
IT companies frequently utilize remote work models, flexible schedules, and freelancer collaborations. This requires accurate personnel accounting and adherence to tax and legal regulations. Key aspects include:
- Employment contracts – hiring employees via labor contracts, freelancer agreements, and civil law contracts.
- Taxation of employee remuneration in accordance with current legislative provisions.
- International payments – processing cross-border payments in accordance with currency regulations and tax obligations.
- Tracking personnel expenses – accounting for training, equipment, and compensation costs.
Effective workforce management ensures compliance with tax laws and minimizes financial risks.
Proper personnel record management plays a key role in human resource management. Learn more about the specifics of personnel administration in the article → "HR record management from scratch: What every leader needs to know?".
Best practices for effective accounting in IT companies
Automate your accounting – use cloud-based accounting systems for efficient management of revenue, expenses, and taxes.
Stay informed about tax regulations – keep up to date with tax changes affecting the IT sector.
Ensure proper contract structuring – consider the specifics of international contracts, VAT obligations, and royalty payments.
Optimize taxation – consult tax experts to select the most advantageous taxation regime.
Maintain financial transparency – keep clear records of all transactions to avoid risks and penalties.
We offer accounting services for IT companies. We help organize income, expense, and tax accounting, ensuring full compliance with legislation and financial transparency. Our specialists will assist you in choosing the optimal taxation regime and properly managing international transactions.
Effective accounting – the foundation for IT company growth
The IT sector thrives on innovation, and accurate financial management is key to sustainable growth. Well-structured accounting practices help ensure compliance with regulations, cost control, risk reduction, and strategic business planning. Proper tax management, intangible asset accounting, and efficient handling of international payments strengthen a company’s market position and attract investment. Transparent accounting ensures financial control and provides a strategic advantage in the industry.