The tax system in the Republic of North Macedonia is composed of 3 main taxes: Value Added Tax (VAT), Income Tax and Personal Income Tax.
- Value Added Tax (VAT)
The subject of value added tax taxation is the supply of goods and services rendered domestically by the taxpayer in the course of his business and import of goods.
In the Republic of Macedonia, there are two tax rates for value added tax of 18% and a preferential tax rate of 5% for certain products and services and from 2021 there is one new VAT rate for restaurant’s services (food and nonalcohol beverages served in the restaurant) and catering services.
The threshold for compulsory registration for value added tax purposes is MKD 2,000,000 or EUR 32.500.
2. Profit tax
Corporate taxpayer is a legal entity resident in the Republic of North Macedonia, which derives profit from doing business in the country and abroad. A resident is an entity that is established or has its head office on the territory of the Republic of North Macedonia.
Profit tax rate is 10%.
Taxpayers with total annual income up to MKD 3,000,000 or EUR 48.600 do not pay income tax.
Taxpayers who made a total income of MKD 3,000,000 to 6,000,000 or EUR 48.600 to 97.200 and chose to report with Form DVBP (Total Income Tax Balance) pay tax on total income in the amount of 1% of total income.
Taxpayers who made a total anual income of MKD 3,000,000 to 6,000,000 or EUR 48.600 to 97.200 and chose to report with Form DB (Tax Balance) and taxpayers who made more than MKD 6,000,000 or EUR 97.200 are income tax payers and pay income tax after a rate of 10% of the realized profit as well as 10% of the amount of non-deductible expenses for tax purposes.
3. Personal income tax. (tax for individuals)
Personal income means the following types of income earned at home and abroad: income from work; self-employed income; income from copyright and related rights; income from the sale of own agricultural products; income from industrial property rights; income from lease and sublease; capital income; capital gains; gambling winnings; insurance income and other income.
In North Macedonia there are two income rates, 15 % and 10%.
- For income from work, income from self-employment, income from copyright and related rights and income from the sale of own agricultural products, income from capital earned on the basis of interest on time deposits, income tax is paid at a rate of 10%.
- For income from industrial property rights, rental and sublease income, capital income, capital gains, insurance income and other income, gaming profit income, the tax is paid at a single rate of 15%.
- Income from capital gains realized from the sale of securities and shares issued by an investment fund, the tax is paid at a rate of 15% if the holder owned them for up to one year, ie at a rate of 10% if he owned them for a period of one to 10 years.