News from FYR Macedonia

  • FYR Macedonia expects GDP growth despite political uncertainty
    Amidst political instability and with no Government in sight yet, the FYR Macedonian National Bank has stated it expects the country’s economic stabilization in 2017. The National Bank sold a 25 billion denar worth of 28-day bills at a rate of 3.25%, lower than the January rate of 3.50%, therefore effectively lowering the benchmark interest rate. The Bank has also...
  • FYR Macedonia introduces application of preferential VAT rate to pellet products
    The preferential VAT rate of 5% in FYR Macedonia is commonly applied to – among others - human food products; medicines and medical equipment; publications; seeds and planting material used in agriculture; other agricultural products such as fertilizers, foils and machinery; as well as software and hardware products. The latest addition to the list of preferential VAT goods/services was introduced...
  • PEO services in FYR Macedonia: A flexible approach to a rigid framework
    The FYR Macedonia legislation prohibits foreign companies to register as foreign employers only in the country. All local employments must be performed through a resident company duly registered according to local legislation. As a result, it is a prerequisite for foreign companies wanting to hire staff in FYR Macedonia to incorporate a resident entity, be it a branch of the...
  • Changing the main business activity code of a FYR Macedonian company
    All resident companies incorporated under FYR Macedonian legislation are required to select a main business activity code during the incorporation procedure. This business activity is what the company founders plan to be the main activity of the legal entity. However, most companies nowadays, during the setup procedure, also include a so-called “general business clause” in their incorporation documents which enables...
  • Automatic deletion of FYR Macedonian inactive entities: conditions, requirements and consequences
    Due to the simplicity of registering a company in FYR Macedonia and the myriad of tax incentives provided, the number of newly registered entities in recent years has grown rapidly and has created additional burden for the public administration institutions. This has particularly been the case for the Central Register which is in charge of maintaining company records. As a...
  • FYR Macedonia and Israel sign a Double Tax Treaty
    FYR Macedonia | February 2016 | On December 9th, 2015, FYR Macedonian Government representatives signed a Double Tax Treaty (DTT) with Israeli officials in Jerusalem. Pending approval from both countries’ authorities, the Treaty will be effective from the calendar year following the one during which ratifications will take place. The DTT covers personal income tax and profit tax in FYR...
  • FYR Macedonia signs Double Tax Treaties with United Arab Emirates and Israel; negotiates with Bangladesh and Hong Kong
    FYR Macedonia/December 2015 In the last six months, the Government of FYR Macedonia has done considerable progress on extending its double tax treaty network. During the first half of June 2015, negotiations with Hong Kong officials commenced, aimed at signing a treaty for the avoidance of double taxation. The first negotiation round was concluded on June 12, 2015. Similarly, FYR...
  • FYR Macedonia Ratifies Double Tax Treaty with Vietnam
    FYR Macedonia/November 2015 On 14 April 2015, the FYR Macedonian parliament ratified the tax treaty signed with Vietnam on 15 October 2014. The ratification law was published in the Official Gazette No. 63 of 20 April 2015. The treaty covers the personal income tax and profit tax in FYR Macedonia and the personal income tax and business income tax in...
  • FYR Macedonia expands network of bilateral social security agreements
    FYR Macedonia/October 2015 Within the last year, FYR Macedonia has been actively working on concluding and ratifying social security agreements with a number of countries. Bilateral agreements on social security are signed in order to facilitate nationals of one state who are employed or living in the other state to exercise their rights to social security in that other state,...
  • FYR Macedonia – Saudi Arabia Double Tax Treaty approved by government
    FYR Macedonia/August 2015 On July 14 2015, the FYR Macedonian Government approved the Double Tax Treaty between FYR Macedonia and Kingdom of Saudi Arabia signed on December 15, 2014. Pending approval from the Saudi Arabian authorities, the Treaty will be effective from the calendar year following the one during which such approval will take place. The DTT covers personal income...
  • FYR Macedonia – Kazakhstan treaty ratified by Parliament
    Macedonia/March 2015 On 26 February 2015, the Kazakhstan Senate approved the Double Tax Treaty signed with FYR Macedonia on 2 July 2012. Given that the FYR Macedonian Parliament had already ratified the treaty on 4 December 2012 and the ratification was published in the Official Gazette 154 on 7 December 2012, it is expected that the treaty will be applicable...
  • Lower VAT registration threshold enacted; possibility of electronic invoicing introduced
    FYR Macedonia/December 2014 The Law on Value Added Tax in FYR Macedonia underwent a number of revisions in 2014, with the most recent reform taking place in early September. Published in the Official Gazette no. 130/2014 and effective as of September 11 2014, the new Law on VAT introduces some amendments that are expected to impact a large percentage of...
  • New Profit Tax Law to enter into force in 2015
    FYR Macedonia/October 2014 The amended Profit Tax Law of FYR Macedonia, published in the Official Gazette No. 112 on 27 July 2014, will enter into force on 1 January 2015. The Law will be applicable retroactively to 2014 as well, insofar as the determination of the profit tax base for the fiscal 2014 is concerned. According to the new Law...
  • FYR Macedonia adds new product categories to the preferential VAT rate regime
    FYR Macedonia/September 2014 With the latest amendments on the Law on VAT published in the Official Gazette on 5 August 2014 and effective as of 6 August 2014, the reduced VAT rate (5%) is now applicable to new categories of products that were previously subject to the regular (18%) VAT rate. These new categories include: - Livestock - Livestock food...
  • FYR Macedonia abolishes the calendar year as a VAT period; aims to decrease VAT registration threshold
    FYR Macedonia/September 2014 Until 1 July 2014, the FYR Macedonian tax system recognized three types of VAT taxpayers depending on the VAT period applicable to them. Based on the annual turnover of taxpayers, the tax authority used to classify companies as either monthly, quarterly or annual taxpayers. As of July 2014, the calendar year as a VAT period is abolished...
  • FYR Macedonia changes tax treatment of uncollected loans
    FYR Macedonia/July 2014 The corporate income tax system in FYR Macedonia - since its groundbreaking revamping in 2011 – has been mostly concerned with the unrecognized (non-deductible) expenses of a company for the purposes of determining its tax base, as opposed to the actual profit of a company. However, within the last 3 years of the validity of this novel...
  • Reinstatement of withholding tax on dividends distributed to resident companies
    FYR Macedonia/March 2014 Effective from July 2010 and up until February 2014, the tax treatment of dividends in FYR Macedonia depended on the residency of the dividend-receiving entity/individual. This was due to the fact that in July 2010, the Government had introduced an anti-crisis taxation exemption principle, whereby all forms of profit distribution made to resident legal entities were exempt...
  • FYR Macedonian Government Adopts 2014 Budget
    FYR Macedonia/March 2014 Despite rumors about changes in the taxation rates in the country, the FYR Macedonian Government approved the budget for 2014 without any changes in the taxation regime. The budget for 2014 was published in the Official Gazette No.183 of December 23 2013. According to the budget, government incomes are estimated at around MKD 158.34 billion, whereas expenses...
  • FYR Macedonia introduces reverse charge mechanism for select categories of services
    FYR Macedonia/June 2014 A decision defining the categories of supply of goods and services for which the VAT responsible taxpayer is considered to be the entity to which the supply is being provided by another VAT-registered company was published in the Official Gazette 45/2014 and is applicable as of March 5, 2014. The Decision lists goods and services on which...
  • FYR Macedonia ratifies double tax treaty with Bosnia & Herzegovina
    FYR Macedonia/May 2014 On February 3, 2014, the FYR Macedonian parliament has ratified the tax treaty with Bosnia & Herzegovina signed on September 24, 2013 in Sarajevo. The ratification law was published in the Official Gazette No. 29 of 6 February 2014. Pending ratification of the treaty by Bosnia & Herzegovina and its subsequent entry into force, the agreement provisions...
  • Tax treatment of interest income
    FYR Macedonia/December 2013 The FYR Macedonian Government considers any interest income arising from loans as regular income, but there are specific points in relation to the interest rate worth surveying in detail, which are oftentimes neglected by taxpayers. In terms of loans between related entities (including physical persons who are capital shareholders in a resident company), the legislation has a...
  • VAT treatment of related entities
    FYR Macedonia/September 2013 According to the Article 56 of the Law on VAT in FYR Macedonia, the Public Revenue Office (PRO) is empowered to - at its discretion - register two or more legal entities as VAT-dependent or VAT-related taxpayers. The basis for such a joint VAT registration is the existence of certain ownership, organisation of management relation between the...
  • Mandatory e-tax filings for quarterly VAT taxpayers
    FYR Macedonia/July 2013 Mandatory use of the Public Revenue Office’s (PRO) e-tax system begun to be implemented in FYR Macedonia from the beginning of 2013. From January 1 2013, monthly VAT taxpayers (large companies) are obliged to file their VAT returns using the online system of the PRO. The introduction of the system was met with mixed reception from the...
  • Introduction of Lawyer Stamps
    FYR Macedonia/May 2013 As of  January 1, 2013, the Law on Lawyer Stamps (effective as of July 2012) has entered into force but is currently under review of the Constitutional Court following an avalanche of criticism from lawyers across the Republic. According to the Law, FYR Macedonian lawyers who earn income in cash are now required to attach the so...
  • Kazakhstan treaty ratified by parliament
    FYR Macedonia/April 2013 On December 4 2012, the FYR Macedonian Parliament ratified the income tax treaty signed with Kazakhstan.  The ratification was published in the Official Gazette 154 on December 7 2012. The treaty, initially signed between the two countries on July 2 2012, covers the personal income tax and profit tax in FYR Macedonia and the corporate income tax...
  • Bad debt and forceful collection deadlines
    FYR Macedonia/March 2013 Because of the private sector’s low liquidity as a result of the global financial downturn, companies frequently find themselves reaching for the last available tool to collect uncollected receivables, the forceful collection mechanism. It is worth noting that the procedure to forcefully collect outstanding debt is regulated by certain deadlines after which the said debt becomes obsolete;...
  • Luxembourg treaty ratified by parliament
    FYR Macedonia/February 2013 On October 31 2012, The FYR Macedonian Parliament ratified the income and capital tax treaty signed with Luxembourg on May 15 2012.  The taxes covered by the treaty are the personal income tax, profit tax and property tax in FYR Macedonia while in Luxembourg taxes include the individuals’ income tax, the corporation tax, capital tax and communal...