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8.1.1. Corporate Income Tax

The standard corporate tax rate for companies is 10%.

Collective Investment Institutions regulated under the Regulation on Collective Investment Undertakings are exempt from tax.

Taxpayers engaged in the following activities are eligible for 80% reduction in the tax base, resulting into reduced corporate tax rate of 2%, subject to satisfaction of certain conditions:

  • International operations involving intangible assets
  • International trading of goods
  • Intra-group financial management and investment

Further, income earned by newly set-up companies up to the first EUR 50,000 is subject to tax at a beneficial rate of 5%, for the first three years of their activity, provided their total income does not exceed EUR 100,000.

Capital gains earned by a taxpayer are subject to tax at the standard rate of 10%. However, transfer of immovable property is subject to tax at progressive rates ranging from 1% to 15%, depending on the period of holding of the asset. If the asset is held for more than 10 years prior to its transfer, no capital gains tax is levied. The gain is also subject to corporate income tax, though tax credit is granted in respect of capital gains tax paid on the transfer of immovable property.

Turnover based taxation

Special and voluntary regime of determination of tax base considering turnover can be applied if turnover in the previous year does not exceed EUR 300,000.

Under this regime, the following deductions are allowed:

  • General business expenses – 80% of the turnover
  • Board of directors’ expenses – 2% of the turnover
  • Other activities – 40% of the turnover  

Taxpayers opting for this regime must intimate the Ministry of Finance in the year preceding the relevant tax year. Once opted, the regime must be followed for 3 years.