Page 40 - Mazars Central and Eastern European tax guide 2023

North Macedonia VAT options in Applicable / limits The PIT Law amendments of 1 January 2019 introduced
progressive tax rates for work-related income (such
North Macedonia as salaries, pensions, etc.), income from copyrights and
Distance selling No related rights, income from an independent activity
and income from the sale of agricultural products
Call-off stock No
Mazars N-P-KONSALTING DOO VAT group registration (Labour Income). With the amendments to the PIT Law,
Labour Income will be subject to tax, at a flat tax rate
Skopje ü of 10% until January 2023 regardless of the tax base
Street Dame Gruev num. 7, Cash accounting – yearly No amount. Employers are obliged to calculate, withhold
amount in EUR (approx.)
1000 Skopje from employees’ gross salary and pay into the accounts
Phone: (+385) 1 4864 420 Import VAT deferment No of respective funds the compulsory social contributions
Fax: (+385) 1 4864 429 Construction including and personal income tax (PIT). Altogether social security
www.mazars.mk Local reverse charge maintenance, electrical installation,
plumbing, etc. contributions payable by employees amount to 28%
Option for taxation of their gross salary: the pension contribution is 18.80%;
health care insurance is 7.50%; unemployment insurance
letting of real estate No is 1.20%; and health care at work insurance is 0.5%.
Corporate taxes and other direct taxes amount of the investment of profits (reinvested profit) for supply of used real estate No The examples below show the cost of the employer and
development purposes, i.e., investment in tangible assets the employee in the case of the minimum wage level and
There is a 10% flat general corporate income tax rate for all (property, plant and equipment) and intangible assets VAT registration MKD 2 million per year average wage. The personal allowance is MKD 105,456
taxpayers in North Macedonia. Exceptionally, companies (computer software and patents) intended to expand the threshold (EUR 32,415 /year) on an annual basis, while the monthly personal allowance
with total revenues of up to 3 million denars (MKD) are activity of the taxpayer. amounts to MKD 8,788.
exempt from the payment of CIT and companies with total with regard to their public interest or special nature.
revenues between 3,000,001 and 6,000,000 denars have North Macedonia applies thin capitalisation (3:1). Thin A reduced rate of 10% was recently introduced for hotel The minimum base for social security contributions equals
the option to pay CIT at 1% of their total revenue. capitalisation rules also apply to loans from banks if they and restaurant services. 50% of the average monthly salary for the current month.
are granted in relation to a deposit of the shareholder However, for self-employed people the minimum base
The tax base is the pre-tax profit modified by several in that particular bank. Also, thin capitalisation rules Other indirect taxes in North Macedonia include fuel tax is the average salary.
increasing and decreasing items. Losses can be carried do not apply for newly established companies for the first and excise duties.
forward within a limited period of 3 years. Loss carry back three years of their operation. In North Macedonia, there The highest base for the payment of mandatory social
is not permitted. No special limitations are applicable is a withholding tax at a rate of 10% on dividends, interests, Personal income tax / Social security system security contributions on a monthly basis is 18 average
in case of M&A transactions. The tax base is reduced by the salaries paid in Macedonia for employees and members
royalties and other incomes paid by a North Macedonian With the latest amendments to the Law on Personal of managing and supervisory bodies and 12 average
company to a foreign company. The entities obliged to pay Income Tax (PIT Law), progressive taxation of personal salaries for the self-employed.
Transfer pricing in North Macedonia withholding tax should submit a Report on the withholding income is put on hold for 36 months as of 1 January 2020.
tax paid on the form “DD-I” to the Public Revenue Office
Arm's length principle ü Since 2019 once a year.
The CIT payer has to submit
Documentation liability ü a report until 30 September In North Macedonia, there is a withholding tax at a rate
of the current year for the
previous year. of 10% on dividends, interests, royalties and other incomes
paid by a North Macedonian company to a foreign
APA No The tax legislation does not company. The entities obliged to pay withholding tax
provide binding APA. Average wage
Country-by-Country No No obligation regarding should submit a report on the withholding tax paid Wage related taxes in North Macedonia Minimum wage in MAC in MAC
Country-by-Country
liability reporting as yet. on the form “DD-I” to the Public Revenue Office once
a year. This form must be submitted by 15 February of the
Master file-local file The report has to contain: following year. Exchange rate MKD/EUR 61.69 in EUR in MKD in EUR in MKD
(OECD BEPS 13) No Master File, Local File and 482 29,739 801 49,397
applicable attachments. North Macedonia has a wide international treaty (DTT)
Penalty network with 50 double tax treaties, and the withholding Total wage cost 482 100.00% 801 100.00%
tax rate can be reduced or abolished under the active Social contribution on salary – 0.00% – 0.00%
~ EUR 2,500-3,000 / missing
documents, doubled for DTT. Taxpayers are obliged to obtain approval from the Gross salary 482 100.00% 801 100.00%
lack of documentation ü recurrence and tax authorities Macedonian tax authorities prior to applying the tax Employees' contributions 135 28.00% 224 28.00%
are entitled to suspend the
taxpayer's business activity for rates from DTT. Personal income tax* 20 4.16% 43 5.37%
3 to 30 days. The tax rate on sales and other transfers of real estate and
Net salary
Up to 10 times the amount
tax shortage ü of the understatement of tax. rights to real estate is 2% to 4% of the market value of the * Personal income tax base differs from gross salary, deductions apply. 327 67.84% 533 66.63%
property. There is also a property tax (the rate is 0.1%-
Individuals and legal entities 0.2%) paid annually by owners of immovable properties.
with control or significant
influence, family members VAT and other indirect taxes
Related parties 20% < of owners or members of the
Management Board, all non-
resident legal entities registered The general rate is 18%; a reduced rate of 5% is applicable
in low-tax jurisdictions. for food products, pharmaceuticals, production
Interest income/expense equipment, computers and public transportation. Exports Nenad Randjelovic
from the loans as EURIBOR
Safe harbours ü +1% (or SKIBOR +1% for loans are zero-rated. VAT-exempt services are mainly banking Managing Partner
extended in MKD). services, insurance, certain services provided by medical Phone: +389 (0)2 3166 144
Level of attention paid by Tax doctors and dentists, certain types of education and Mobile: +389 (0)70 291 095
Authority 7/10 training, as well as other activities that are tax exempt E-mail: nenad.randjelovic@mazars.mk

40 Mazars Central and Eastern European tax guide 2023 Central and Eastern European tax guide 2023 Mazars 41