Page 40 - CEE Tax Guide 2024

North Macedonia public interest or special nature. A reduced rate of 10% was 1, 2020. The PIT Law amendments of January 1, 2019
recently introduced for hotel and restaurant services.
introduced progressive tax rates for work-related
Other indirect taxes in North Macedonia include fuel tax income (such as salaries, pensions, etc.), income from
and excise duties. copyrights and related rights, income from independent
activities, and income from the sale of agricultural
VAT options in products (Labor Income). With the amendments to the
Mazars N-P-KONSALTING DOO Applicable / limits PIT Law, Labor Income will be subject to tax at a flat rate
Skopje North Macedonia of 10% until January 2023 regardless of the tax base
Street Dame Gruev num. 7, Distance selling No amount. Employers are obliged to calculate, withhold
1000 Skopje from employees’ gross salary, and pay into the accounts
www.mazars.mk Call-off stock No of respective funds the compulsory social contributions
VAT group registration ü and personal income tax (PIT). Altogether, social security
Cash accounting – yearly contributions payable by employees amount to 28%
amount in EUR (approx.) No
of their gross salary: the pension contribution is 18.80%;
Import VAT deferment No health care insurance is 7.50%; unemployment insurance
Construction including is 1.20%; and health care at work insurance is 0.5%.
Corporate taxes and other direct taxes case of M&A transactions. The tax base is reduced by the Local reverse charge maintenance, electrical installation, The examples below show the cost of the employer and
amount of the investment of profits (reinvested profit) for plumbing, etc. the employee in the case of the minimum wage level and
There is a 10% flat general corporate income tax rate for all development purposes, i.e. investments in tangible assets average wage. The personal allowance is MKD 105,456
taxpayers in North Macedonia. Exceptionally, companies (property, plant, and equipment) and intangible assets Option for taxation on an annual basis, while the monthly personal allowance
with a total revenue of up to 3 million denars (MKD) are (computer software and patents) intended to expand the letting of real estate No amounts to MKD 9,540.
exempt from the payment of CIT, and companies with activity of the taxpayer. supply of used real estate No
a total revenue between 3,000,001 and 6,000,000 denars The minimum base for social security contributions equals
have the option to pay CIT at 1% of their total revenue. North Macedonia applies thin capitalization (3:1). Thin VAT registration MKD 2 million per year 50% of the average monthly salary for the current month.
capitalization rules also apply to loans from banks if they threshold (EUR 32,415 /year). However, for self-employed people, the minimum base
The tax base is the pre-tax profit modified by several are granted in relation to a deposit of the shareholder is the average salary.
increasing and decreasing items. Losses can be carried in that particular bank. Also, thin capitalization rules
forward within a limited period of 3 years. Losses cannot do not apply for newly established companies for the first Personal income tax / Social security system The highest base for the payment of mandatory social
be carried back. No special limitations are applicable in the security contributions on a monthly basis is 18 average
three years of their operation. In North Macedonia, there With the latest amendments to the Law on Personal salaries paid in Macedonia for employees and members
Transfer pricing in North Macedonia is a withholding tax at a rate of 10% on dividends, interests, Income Tax (PIT Law), progressive personal income of managing and supervisory bodies and 12 average
taxation has been put on hold for 36 months as of January
royalties, and other incomes paid by a North Macedonian
Arm's length principle ü Since 2019 company to a foreign company. The entities obliged to pay salaries for the self-employed.
The CIT payer has prepare withholding tax should submit a Report on the withholding
a TP report and keep it in its tax paid on the form “DD-I” to the Public Revenue Office Wage related taxes in North Macedonia Minimum wage in MAC Average wage
Documentation liability ü records. The CIT payer needs once a year. in MAC
to provide the TP Report
to the PRO within 15 days Exchange rate MKD/EUR 61.69 in EUR in MKD in EUR in MKD
of their request. In North Macedonia, there is a withholding tax at a rate 482 29,739 934 57,609
of 10% on dividends, interests, royalties, and other
APA No The tax legislation does not incomes paid by a North Macedonian company to a foreign Total wage cost 482 100.00% 934 100.00%
provide a binding APA.
Country-by-Country No No obligation regarding company. The entities obliged to pay withholding tax Social contribution on salary – 0.00% – 0.00%
liability Country-by-Country should submit a report on the withholding tax paid Gross salary 934
reporting as yet.
on the form “DD-I” to the Public Revenue Office once
Master file-local file The report has to contain: a year. This form must be submitted by February 15 of the 482 100.00% 100.00%
(OECD BEPS 13) No Master File, Local File and following year. Employees' contributions 135 28.00% 261 28.00%
applicable attachments. Personal income tax* 20 4.16% 53 5.63%
Penalty North Macedonia has a wide international treaty (DTT) Net salary 327 67.84% 620 66.37%
network with 50 double tax treaties, and the withholding
~ EUR 2,500-3,000 / missing
document, doubled for tax rate can be reduced or abolished under the active * Personal income tax base differs from gross salary, deductions apply.
recurrence; tax authorities
lack of documentation ü are entitled to suspend the DTT. Taxpayers are obliged to obtain approval from the
taxpayer's business activity for Macedonian tax authorities prior to applying the tax
3 to 30 days. rates from DTT.
The tax rate on sales and other transfers of real estate and
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
Individuals and legal entities property. There is also a property tax (the rate is 0.1%-
with control or significant 0.2%) paid annually by owners of immovable properties.
influence, family members
Related parties > 20% of owners, or members of the VAT and other indirect taxes
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 equipment,
Interest income/expense computers, and public transportation. Exports are zero- Nenad Randjelovic
Safe harbors ü from the loans as EURIBOR Managing Partner
+1% (or SKIBOR +1% for loans rated. VAT-exempt services are mainly banking services, Phone: +389 (0)2 3166 144
extended in MKD). insurance, certain services provided by medical doctors
Level of attention paid by Tax and dentists, certain types of education and training, as well Mobile: +389 (0)70 291 095
Authority 7/10 as other activities that are tax-exempt with regard to their E-mail: nenad.randjelovic@mazars.mk

40 Mazars Central and Eastern European tax guide 2024 Central and Eastern European tax guide 2024 Mazars 41