The initiative to tax digital companies, such as Facebook, Google and other nonresidents that manage different applications on Moldova’s territory could remain unimplemented if the international character of the problem is neglected. “Going alone against companies that earn colossal revenues by any standards can undermine the efficiency of the whole system and can even affect the relationship with the United States,” says a study conducted by expert Vladislav Kaim for WatchDog.md community, IPN reports.
According to the author, the Moldovan Government has at its disposal two more strategies that enable it not to go against the digital giants alone, but to use the own weapons of the giants. The first move is to put off the implementation of the new tax until January 1, 2021 as a common digital tax will be continuously introduced in the EU by then. This will enable Moldova to join its tax regime for digital companies to the regime applicable to the largest common market of the world. Such a decision can lead to a series of positive secondary effects, like the capacity to swifter obtain the recognition of the observance by Moldova of the standards stipulated by the new EU data privacy regulation, etc.
The study says that if the Government wants to be more proactive and to find a regional solution, it should suggest constituting a target working group on digital taxation together with representatives of the Eastern Partnerships countries. The objective of the group would be to create a common digital taxation system in the EaP.
The presence of Google through the search service, email and other services, of Facebook through the social networking site, of Messenger, Whatsapp, Instagram and other digital giants in the life of Moldovans can be definitely called omnipresent. “The unilateral measures introduced by one of the smallest and poorest countries in Europe against the titans of the new economy that fully use economies of scale and their global presence to keep the lead have extremely limited chances of success. And any such decision should be made taking into account the possible impact on the relations between the Republic of Moldova and the United States”.
Under the 2020 budgetary-fiscal policy, the international digital companies working in Moldova were to register with the State Tax Service as of January 1, 2020 and to pay VAT on the relevant services. It was later decided to postpone the implementation of these conditions until this April.
