The Value Added Tax (VAT) refund, in the size prescribed by the legislation and within a term of 45 days from lodging VAT refund applications, will be granted to all economic entities providing goods and services for export, bread and baked goods, milk and dairy products, electricity and heat to local consumers, constructions and other services. According to Info-Prim Neo, the new Regulations on VAT refund, published in the most recent issue of the Official Gazette (Monitorul Oficial), omitted the provisions contained in the older regulations, adopted in 2006, which provided for VAT refund depending on a credibility score assigned by the Main Tax Inspectorate to economic entities, meaning that the entities rated with the second level score would get only 80 percent of the claimed VAT refund in the established term, and the remaining 20 percent half a year later. The proposal to treat evenly all the economic entities when refunding VAT was put forward by the Foreign Investors’ Association in the second edition of the White Book of investments and supported by other businesses in Moldova. Their representatives addressed the issue during the latest Business Forum taking place under the aegis of the Prime-Minister’s Economic Council. The new Regulations determine the method of refunding VAT on assets involving long-term capital investment (expenses) made in the country’s regions, as stipulated in the 2008 State Budget Law. Thus, VAT refund shall be granted to the economic entities from all the country’s territorial-administrative units, except the municipalities of Balti and Chisinau. If investments (expenses) are made in rural areas, the entity will have the opportunity to reclaim VAT starting with the lowest amount invested in purchasing equipment and other instrumentality required in accomplishing some end. In rural areas (except Chisinau and Balti) and in district centers, purchases of instrumentality needed to do business, subsequently transformed into investments, shall be of no less than 100,000 lei to be entitled to VAT refund. VAT shall not be refunded if the investments (expenses) are made to acquire housing or means of transport. The Government hopes that refunding VAT on long-term investments will spur the investment flow in the country’s localities and boost regional development. Therefore, not only the entities based in a certain locality will profit from VAT refund, but also those based in the capital or the municipality of Balti, which will invest in villages or district centers, expanding their businesses. Statistics for 2007 show that Chisinau accounts for 54 percent of the total amount of sales of goods and provision of services, and Balti 16 percent. The towns of Ungheni and Rezina and the Gagauz autonomy managed a combined share of 10 percent. The remaining 27 territorial-administrative units had an aggregate share of 20 percent. While presenting a report on the current developments in implementing the Strategy for investment attraction and export promotion at a recent Government sitting, Economy & Trade Minister Igor Dodon observed an upward trend for investments in rural areas, which added up to 7 billion lei in 2007. They were mainly directed to such areas as building gas and water supply networks and rehabilitating infrastructure facilities in villages. The 2008 State Budget Law stipulates another incentive for Moldova’s smaller towns, district centers and villages – the allocation of 1 percent of the revenues to the regional development budget. The VAT Refund Regulations establish that the entitled beneficiaries are the taxpaying entities that have been operating for no less than two years, which have received VAT refund no less than two times, and no less than one calendar year has passed since the last refund. To receive the refund, the applicants shall submit the VAT statements from which the claimed amount is to be calculated, as well as the register of supplies and purchases.