North Macedonia

Financial Year – 1 January – 31 December
Currency – Macedonian denarius (MKD)

Corporate Income Taxes

Resident legal entities are generally subject to tax on their worldwide income. A legal entity is resident in North Macedonia if it is established in North Macedonia or if its headquarters are in North Macedonia.

Non-resident companies are generally subject to tax on their Macedonian source income, subject to the terms of any relevant tax treaty.

The standard corporate income tax rate is 10%. A simplified tax regime is available to resident small and micro legal entities if:

• The entity carries out economic activities, excluding banking, financial activities, insurance activities, games of chance, or entertainment games, and
• The entity’s total annual income exceeds MKD 3m but does not exceed MKD 6m.

Under the simplified regime, qualifying taxpayers are subject to tax at the rate of 1% of total annual revenue. Qualifying resident small and micro legal entities whose total annual income does not exceed MKD 3m are not subject to tax.

Taxable income must generally include any taxable capital gains.

Dividend income received by a resident entity from another resident entity is deducted from the receiving entity’s tax base if such income was taxed in the hands of the paying company.

Unutilized losses can generally be carried forward for up to three years (restrictions may apply in cases where the status of the taxpayer changes, such as by merger, acquisition, separation, or transformation of ownership). There are no provisions for the carry back of losses.

Group tax consolidation is not available in North Macedonia; consequently losses cannot be offset against the profits of another company in the same group.

The tax period is the calendar year.

Tax returns are generally due for filing by no later than the end of February of the following year, or by 15 March if filing electronically. Large and medium sized entities (as defined) are required to file their tax returns electronically.

Taxpayers are generally required to make monthly advance payments of corporate income tax payable within 15 days following the end of each calendar month. Any remaining corporate income tax due is payable by no later than 30 days after the deadline for filing the tax return. If the advance payments exceed the eventual tax liability, the taxpayer may reclaim a refund of the excess. Alternatively, any excess tax paid can be carried forward as an advance payment for the next tax period. Taxpayers under the simplified tax regime are required to pay tax in one installment no later than 30 days after the deadline for filing the tax return.

Personal Taxes

Resident individuals are generally subject to income tax on their worldwide income.

Non-resident individuals are generally subject to income tax on their Macedonian source income, subject to the terms of any relevant tax treaty.

Individuals are subject to tax on their taxable income at the rate of 10% (subject to exemptions and deductions).

Taxable income must generally include any taxable capital gains. Capital gains in respect of sales of real estate in which the taxpayer has lived for a period of at least one year prior to sale are taxable on 70% of the gain. Capital gains from the sale of real estate are not subject to tax if:

• The taxpayer has owned the real estate for a period of at least three years and has lived in the property for at least one year prior to sale,
• The taxpayer has owned the real estate for a period of at least five years,
• The real estate sold was acquired by way of an inheritance or gift that is tax exempt, or
• The real estate was sold to a spouse, or was sold in connection with a divorce.

From 1 January 2013 to 31 December 2021, capital gains arising from the sale of securities are not subject to tax.

Inheritance and gift taxes are generally imposed on the market value of Property obtained by way of inheritance or gift. The tax rates are determined by municipalities in accordance with legislation from a range of 2% to 5%. Certain inheritances and gifts are tax exempt, including inheritances and gifts received from first degree relatives, and residential real estate received from second degree relatives if the parties lived in the same household for a period of at least one year before death or before the gift was given and the receiving party or their family does not have their own residential real estate.

There is no wealth tax.

Employment Related

Costs and Taxes

Fringe benefits
There is no separate fringe benefits tax. Unless specifically exempt, the taxable value of benefits-in-kind form part of the taxable income of individuals and are subject to personal income tax.

Social security costs
Employers are generally required to make the following social security contributions from the salary of employees (subject to minimum threshold and salary ceilings):

Withholding Taxes on Payments Abroad

The rates of withholding tax on the following payments made to foreign legal entities are generally:

For payments made to recipients in countries with which North Macedonia has a double tax treaty, the rates of withholding tax may be reduced under the terms of the treaty.

See for more details:

• http://ujp.gov.mk/en/plakjanje/category/137

Last update: 18.02.2022