Macedonia has created the most attractive tax package in Europe, introducing flat tax rate of 10% for corporate and personal income, which simplify the tax system and stimulate successful companies to further improve operations and increase profitability.
Corporate Income Tax - 10%
Personal Income Tax - 10%
Value Added Tax
General Tax Rate: 18%
*Preferential Tax Rate: 5%
Property Tax 0.1% - 0.2%
Inheritance and Gift Tax **2 - 3% or 4 - 5%
Sales Tax on Real Estate and Rights 2 - 4%
* includes computer software and hardware
** 2-3% for the taxpayer in the 2nd order of succession and 4-5% for the taxpayer in the 3rd order of succession or not related to the testator
Source: Public revenue office
Withholding tax is applied on the following incomes payable abroad:
4) Income from entertainment or sporting activities in Macedonia;
5) Income from management, consulting, financial services, services related to research and development;
6) Income from insurance or reinsurance premiums;
7) Income from telecommunication services between Macedonia and a foreign country;
8) Income from lease of immovable property in Macedonia.
Tax shall not be withheld on the following revenues:
1) Transfer of the profit of the permanent establishment of a foreign legal entity in Macedonia, for which profit tax has been previously paid;
2) Revenue from interest on debt instruments issued and/or guaranteed by the Macedonian Government, the National Bank of Macedonia and banks or other financial institutions acting as a representative of the Macedonian Government;
3) Income from interest on deposits in a bank located in Macedonia; and
4) Income from intermediation or consulting regarding government securities on the international financial market.
The Republic of Macedonia has signed investment protection treaties with the following countries:
Albania, Austria, Belgium, Bosnia, Bulgaria, China, Croatia, Czech Republic, People's Republic of Korea, Finland, France, Germany, Hungary, India, Italy, Malaysia, Netherlands, Poland, Romania, Russia, Serbia, Slovenia, Spain, Sweden, Switzerland, Turkey and Ukraine.
The Republic of Macedonia has signed agreements for avoidance of double taxation with the following countries:
Austria, Albania, Belgium *, Belarus, Bulgaria, Tues Britain, Germany, Denmark, Egypt, Estonia, Iran, Ireland, Italy, Qatar, China, Kosovo, Kuwait, Latvia, Lithuania, Morocco, Moldova, Norway, Poland, Romania, Russia, Slovakia, Slovenia, Taiwan, Turkey, Ukraine, Hungary, Finland, France, Netherlands, Croatia, Czech, Switzerland, Sweden, Spain, Serbia, Montenegro.
Changes in Macedonian accounting legislation over the past few years have moved Macedonian accounting legislation closer to International Financial Reporting Standards (IFRS).
On 29 December 2009 a new Rulebook for Accounting was published, which contained the 2009 Bound volume of the IFRS, as adopted by the IASB. These IFRSs are applicable for annual periods beginning on or after 1 January 2010. The Trading Company Law, the Banking Law, the Law on Insurance Supervision as well as certain other laws also contain regulations applicable to financial reporting requirements.
Accounting records requirements
The Trading Company Law regulates the obligations and manners in which the accounting records of all companies (including financial institutions) will be kept including the following:
• The accounting records of business organizations are kept in accordance with the IFRS as adopted in the Republic of Macedonia;
• Accounting records are to be kept in Macedonian language;
• Accounting records are to be kept using double entry bookkeeping;
• Bookkeeping is organized in a chronological order;
• Accounting records are to be closed on 31 December of each year.
There are standard charts of accounts for companies, banks, insurance companies and non-for-profit organizations.