Macedonia taxes

Taxation in Macedonia, Taxes for companies in Macedonia.

In 2009 was introduced a new concept in the taxation of corporate profits in Macedonia. Tax is calculated and payable with a tax rate of 10% on two components. Tax on any dividend distribution or other forms of distribution from the profit and tax on non-deductible expenses and understated revenues. Dividends distributed to Macedonian resident legal entities are not subject to tax.

Some of the taxable items at year-end include: expenses not related with the taxpayer’s business activity, entertainment expenses, unjustified shortages, understated revenues for supplies of goods and services between related parties and other items specifically identified by the law.

WITHHOLDING TAX

Income accrued and paid by Macedonian entities to foreign resident legal entities is subject to WHT at the rate of 10%, provided that the income is not generated through a permanent establishment of the foreign entity in Macedonia.

If there is a Double Tax Treaty (DTT) in force between Macedonia and the country where the recipient of the income is considered a tax resident, its provisions are applied with priority over the Macedonian legislation.

PERSONAL TAXES

Macedonian resident individuals are subject to personal income tax (PIT) on their worldwide income. Individuals are considered to be residents for tax purposes in Macedonia if they have a permanent dwelling in Macedonia or reside in Macedonia for more than 183 days in a 12-month period.

The personal income tax rate is 10%.

VAT

VAT is levied on supplies of goods or services with a place of supply in Macedonia, import of goods into Macedonia. The standard VAT rate that applies to most VAT taxable supplies is 18%. A reduced VAT rate of 5% applies mainly to the supply of the some goods and services.

If you have questions about different type of entities in Macedonia, do not hesitate to contact us.