New authentic interpretations to articles from the tax legislation

New authentic interpretations to articles from the tax

Important clarifications have been made for a number of tax concepts through authentic interpretations of the Assembly of the Republic of North Macedonia. The authentic interpretations have the force of a law.


Taxation of accommodation and travel expenses paid by non-profit organizations to individuals not employed with the organization

Based on an authentic interpretation of Article 117 of the Transitional Provisions of the Law on Taxation of Personal Income, published in issue 84 of the Official Gazette of 24 April 2019, the procedures which started prior to the date of application of the new law, i.e. before 1 January 2019, and which are not yet finished are to be completed according to the previous law, except for travel and accommodation expenses incurred by non-profit organizations in regards to non-employed individuals, which are exempt from taxation. More specifically, the respective expenses are regarded as compensation which is not subject to income tax, under the conditions that the expenses are related to the taxpayer’s activity and are supported with the proper documentation.

Scope of the VAT place of supply rules for advertising and data processing services 

The scope of Article 14, paragraph 3 of the VAT Law, which provides that the place of supply of services is where the recipient of the services is resident, is further specified:

  • Point 1: Services in the field of advertising and public relations is to be interpreted to include the following: services for customer care in the area of promotion of sales, digital marketing, targeting potential clients, creating promotional materials, managing social media (creating, maintaining and implementing a strategy).
  • Point 5: Services of electronic data processing and provision of information, including know-how and expertise is to be interpreted to include the following: technical support for setting up software, technical support for setting up hardware, remote automated technical services, database intervention: input, supplement, modification, management, data update of a website, background administrative work, creating of reports.

Transfer tax exemption for immovable property in cases of amalgamations, mergers and divisions 

Pursuant to the authentic interpretation published in issue 96 of the Official Gazette on 17 May 2019, Article 25 of the Law on Property Taxes is to be interpreted that in cases of amalgamations, mergers and divisions of companies (so called “status changes” under the Law on Trading Companies) in the course of which there is a transfer of immovable property into the equity of the companies, such a transaction will be considered as a contribution of immovable property to a company’s share equity which is to be deemed exempt from transfer tax.

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