ECONOMIC COUNCIL TO THE PRIME MINISTER OF THE RM

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Moldovan employers face problems in paying the salaries of their workers who work for them remote

13 May 2021 – During the COVID-19 pandemic, changes were made in Moldovan legislation that allow Moldovan employers to sign remote contracts with workers, including from other countries. These provisions are widely used by the IT industry.

At the end of the month, when the employer has to transfer the employee’s salary abroad, the State of the Republic of Moldova cannot withhold the taxes related to the employee, ie income tax, social insurance and medical insurance. This is because all these taxes remain on the territory of the Republic of Moldova, but because the contracts with non-residents are made with data only from the passport, which do not contain IDNP, it is impossible to identify the person for whom medical insurance is paid.

The subject came to the attention of the Economic Council at the request of the associative business sector. A first meeting in this regard took place, during which it was established that the subject requires a detailed analysis.

Experts need to find a solution that allows both the payment of taxes to the state and the facilitation of access to qualified specialists on the labor market in Moldova, which we are acutely lacking, including in the IT field.

The Secretariat of the Economic Council to the Prime Minister is supported by the European Bank for Reconstruction and Development, funded by the UK Government’s Good Governance Fund, and the International Finance Corporation’s Investment Climate Reform Project funded by the Government of Sweden’s International Development Agency.

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