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Taxation and Customs Union

Republic of Moldova

Overall Relations

Customs relations and cooperation between the EU and Moldova are part of the EU's overall political and economic relations with this country. Moldova is a partner country of the Eastern Partnership within the European Neighbourhood Policy. In 2014, the EU and Moldova agreed an Association Agenda.

The Association Agreement between the European Union and the European Atomic Energy Community and their Member States with Moldova, signed on 27 June 2014 and entered into force since 1 July 2016, contains a number of economic and trade cooperation rules, including general provisions on:

  • Customs and trade facilitation (Chapter 5, artt. 192-201)
  • Taxation (Chapter 8, artt. 52-57)

Trade relations

The EU and Moldova Association Agreement introduces a preferential trade regime, the Deep and Comprehensive Free Trade Area (DCFTA). This preferential trade system has allowed Moldova to benefit from reduced or eliminated tariffs for its goods, an increased services market and better investment conditions. Moldova has been a member of the World Trade Organisation since 2001 (July 26, 2001) and joined the Pan-Euro-Med Convention since 2016 (December 1, 2016).

Customs relations

Moldova joined the World Customs Organisation in 1994 (October 28, 1994).

The EU and Moldova Association Agreement

  • allows the removal of import duties for most goods traded between the EU and Moldova
  • provides for broad mutual access to trade in services for both partners
  • provides the chance to both EU and Moldovan companies to create a subsidiary or a branch office on a non-discriminatory basis. This means they receive the same treatment as domestic companies in the partner's market when setting up a business.

The EU and Moldova Customs Sub-Committee (art. 200) provides the operative framework for regular consultations and monitoring of the implementation and the administration of Chapter 5, including the matters of customs cooperation, cross-border customs cooperation and management, technical assistance, rules of origin, trade facilitation, as well as mutual administrative assistance in customs matters. The Customs sub-committee takes place once a year.

Within the Commission:

  • TAXUD is in charge of the management of the customs section of the Agreement
  • OLAF deals with anti-fraud issues

Tax relations

The EU and Moldova Association Agreement

  • Implementing the principles of good governance in the tax area, i.e. the principles of transparency, exchange of information and fair tax competition, as subscribed to by Member States at EU level.
  • Enhances and strengths the cooperation aimed at the improvement and development of the Republic of Moldova's tax system and administration, including the enhancement of collection and control capacity, with a specific focus on Value Added Tax (VAT) refund procedures, to avoid accumulation of arrears, ensure effective tax collection and reinforce the fight against tax fraud and tax avoidance.
  • Provides for gradual approximation of the indirect tax legislation to the EU, namely the EU legislation of VAT and excise duties.
  • Taxation issues are discussed once a year during the cluster II sub-committee chaired by EEAS

Background information

The European Union is Moldova's biggest trade partner. Around 70% of its exports are sent to the EU, followed by Russia (8%) and Belarus (3%). The EU's trade with Moldova accounts for 0.1% of its overall trade. Moldova ranks 61st among the EU's trade partners, with a total turnover of €4.6 billion in 2018, an increase of about 40% since 2015.

Trade in goods

Eu exports 2.1€bn

Trade in services

Eu exports: 0.5€ bn

Source: DG Trade, Date of retrieval: 17/04/2019

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