Tax laws North Macedonia
North Macedonia's tax system is characterized by a flat tax structure, competitive corporate tax rates, and a standard value-added tax (VAT) system.
1. Personal Income Tax:
Flat Tax Rate: As of January 1, 2023, North Macedonia applies a flat tax rate of 10% on various income types, including employment income, self-employment income, royalties, rental income, capital gains, and insurance income.
Gambling Income: Income derived from gambling is taxed at a rate of 15%.
2. Corporate Income Tax:
Flat Tax Rate: The corporate income tax rate is set at 10%, aligning with the personal income tax rate.
Global Minimum Tax: In December 2024, North Macedonia adopted legislation introducing a global minimum tax rate of 15% for multinational enterprises and large domestic groups with a turnover exceeding €750 million in two of the past four years. This measure aligns with the OECD/G20's Pillar Two rules and the EU Directive 2022/2523.
3. Value-Added Tax (VAT):
Standard Rate: The general VAT rate is 18%.
Reduced Rate: A preferential VAT rate of 5% applies to certain goods and services, including products for human consumption, publications, seeds, and planting materials.
4. Social Security Contributions:
Mandatory Contributions: Employers and employees are required to make contributions to social security, which cover pensions, health insurance, unemployment insurance, and personal injury insurance. The total mandatory contribution is approximately 37%, comprising:
Employer Contributions: 18%
Employee Contributions: 19%
5. Recent Developments:
VAT Rulebook Amendments: In December 2023, the Ministry of Finance adopted a rulebook for the appointment of fiscal representatives. In January 2024, another rulebook was introduced for the implementation of the Law on VAT, aiming to enhance VAT compliance and administration.
Fiscalization System: North Macedonia has implemented a fiscalization system requiring businesses to use fiscal memory devices, such as fiscal cash registers and printers, to record sales transactions. This system aims to increase tax compliance and reduce tax evasion.
6. Tax Administration:
- Public Revenue Office: The Public Revenue Office (PRO) oversees tax collection and enforcement in North Macedonia. It provides resources such as tax guides, regulations, and publications to assist taxpayers.
Note: Tax laws and regulations are subject to change. For the most current information, it is advisable to consult the Public Revenue Office or seek professional tax advice.
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