The government of North Macedonia has re-submitted the draft amendments to the parliament related to the corporate income tax law, value-added tax (VAT) law, and draft law windfall profits tax. The drafts were initially submitted last year. The key changes are summarized below:
Corporate income tax
The previous version of draft suggested eliminating the tax exemption for companies earning up to MKD 3 million. However, this particular provision has been omitted in the latest draft. Consequently, the tax exemption for companies with income below MKD 3 million would remain in effect under the new proposal.
Utilization of advantageous tax-related privileges will be restricted in cases where the primary intent is to exploit these advantages. This restriction applies when the arrangements lack authenticity, meaning they lack genuine commercial purposes that align with economic reality.
Certain amendments originally scheduled to take effect in 2023 will now be postponed until 2024.
Windfall profits tax
The respective tax return should be submitted by September 25, 2023, and the payment is required to be paid within a 30-day period.
VAT
The supply of pellets, pellet stoves, and pellet kettles will no longer be eligible for the 5% preferential rate. The 5% rate applicable to residential apartments will remain in effect until Macedonia’s accession to the EU. Items intended for human consumption that are not eligible for the 5% VAT rate would instead be applicable to the 10% rate.
