Ana Nicolaescu. In June, in partnership with maib, we will organise a seminar on transfer pricing

Pavel Zingan, in an interview with Ana Nicolaescu, CEO and administrator of NGA Accounting, for the "Entrepreneurial Education" section supported by maib edu.

Ana, I want to talk about working with maib on financial education for entrepreneurs in Moldova. More than 200 people attended the last seminar on income tax for individuals. I'm sure every participant would be interested in learning more about the company you run, as you could be a potential partner. Does NGA Accounting provide accounting services?

Yes, and not only. We offer accounting services, tax audit services, process audit services, and an accounting outsourcing service.

How many employees are there in the company?

Twenty specialists are providing services to 130 legal entity customers.

I want to point out the link between audit and accounting services. Does a company need a license to provide such services?

I will give a brief insight into this topic as part of the financial education process for entrepreneurs.

Recently, a company with an annual turnover of 230 million MDL approached us for a tax audit. For us, tax auditing is a prospective service that we are actively developing. At the same time, for large companies, it is a way to reduce the risk of possible tax penalties - to do an audit at the end of the financial year, as we are also financially responsible for the audit results. So, working with this company, we found a report on the activity of audit companies in Moldova for 2022. The data in the report surprised me and made me think that, considering Moldova's European course and the alignment of national legislation with the European one, the state and companies should pay more attention to this area. Currently, there are only 190 authorised auditors in Moldova.

Do companies not need audit licenses?

No. A company only needs to be registered, and licenses are obtained by specialists who sign audit reports. So, of the 190 licensed auditors, 24 are not working, and 20 have suspended their work. This leaves about 150 auditors working. According to the report, the total revenue of audit companies was 230 million MDL, and direct audit services amounted to 90 million lei. This means that an auditor provided, on average, services worth 600 000 lei, i.e. less than 3,000 euros per month. For comparison, a single company in the agricultural sector has a higher turnover than all the audit companies in the country.

Do you think audit services are undervalued in the local market?

Extremely undervalued. One negative aspect is that audits are mainly formal. According to legislation, a large proportion of companies, in addition to banks and financial institutions, must be audited. There are three criteria - the number of employees is more than 50 people, the value of the company's assets exceeds 127 million and revenues are more than 63 million per year. The company must pass an annual audit if at least two criteria exceed these thresholds. In 2022, 3,240 "audit missions" were carried out. Comparing this figure with the 90 million EUR figure for audit services, one such mission cost less than 1,500 EUR, meaning the checks were probably superficial. Auditing should be an essential element of entrepreneurial activities.

A question about accounting services. How widespread is this in Moldova?

There are no statistics. There is no doubt that this market is much larger than the audit services market. But I am glad there is competition, which helps increase the quality of services, and entrepreneurs can only benefit. As for NGA, the company's mission is to raise the level of financial education of Moldovan entrepreneurs.

Has the collaboration with maib in the field of financial education started due to shared interests?

Exactly. Working with customers, we moved from the manager level of financial education to the personal finance level. The practice of declaring indirect sources of income has been introduced in Moldova for 13 years now, and entrepreneurs are increasingly faced with the obligation to provide confirmatory documentation on personal sources of income. Banks are monitoring this issue, so we organised seminars on the subject. At the last seminar attended by EBA, there were over 200 people, and the question session lasted more than three hours compared to the one and a half hours that had been planned initially.

Do you plan to develop this theme?

I will certainly return to the topic, but I have prepared two new subjects for the near future.

Which one?

As of 2024, a new transfer pricing tax mechanism has been introduced in Moldova.

What prices are we talking about?

In the case of a group of affiliated companies abuses can occur when the group uses transfer prices instead of market prices in its calculations, which are favourable to the group but lead to tax avoidance. The practice of transfer pricing control emerged in the 1960s in the USA and subsequently spread to Europe, and Moldova was one of the few countries in Europe where this practice was not in force.

At present, upon the request of the International Monetary Fund, groups of affiliated companies with domestic transactions between 20 and 50 million MDL annually will file a special declaration by March 25 of the following year. If transactions exceed 50 million MDL, a special case will be opened. Companies must prove that intra-group transactions were carried out at market prices, including when affiliated companies are foreign companies.

You said "two" subjects

A seminar on the second topic will probably take place in early autumn. We will discuss the new law on cash circulation, which will come into force on February 1, 2025. The law requires strict regulation of cash flows. For example, the payment of cash dividends to all founders can be at most 100,000 MDL annually. Thus, even individuals will be required to settle through a bank if the transaction exceeds 1 370 000 MDL, the average price of an apartment.

There is a lot to be done in education. I wish you success and perseverance in keeping it up. It is a necessary field for entrepreneurs in Moldova.

Acest site folosește cookies. Prin continuarea navigării, îți exprimi acordul asupra folosirii cookie-urilor.