Businesses struggle to find tax efficient ways to contribute to bottom line and cash flow, while responding to the challenges of the environment posed by ever increasing regulatory complexity and need for tax revenues, focus on governance, risk and compliance, and the pressure to cut costs and do more with less resources.

The domestic direct tax legislation imposes a number of specific rules and requirements to businesses, resulting in reputational and financial risk of non-compliance, increasing the administrative burden and diverting limited internal resources from higher-value activities. The domestic rules and requirements undergo changes, tax returns require more and more additional information demanding adjustments to the business processes and systems in order to capture it. 

The Macedonian corporate income tax has been subject to frequent changes in recent periods. As a result, companies may need daily assistance in the interpretation and application of the amendments as well as in structuring their tax position in a way that eliminates future tax implications.

At the same time, the tax authorities are becoming increasingly strict and demanding when scrutinizing the tax position of the businesses. This is especially valid with regard to related party transactions, whereby tax authorities require solid substantiation of the transactions of the all types of consultancy other
immaterial transactions. This also refers to the levying of withholding tax (WHT) on Macedonian source income of non-residents and application of double
tax treaties (DTTs). 

The Direct Taxes team of KPMG in Macedonia may be your trusted partner in coping with the above challenges. We provide direct tax assistance to domestic and foreign companies operating in Macedonia with regard to: 

• Corporate tax
• Withholding tax
• Personal income tax

We can help you organize and maintain tax efficient business operations, achieving an optimum level of tax charge, while minimizing cost of compliance and tax risks.

We can provide you with timely, tailored and practical solutions in line with the industry’s best practices and trends, while considering the domestic specifics and culture.

We can help you make your Tax & Finance function a proactive business partner focused on more value-adding activities such as optimizing the effective tax rate, cash tax planning, tax process improvement and integration with other internal business groups. Apart from performing the non-core direct tax analysis and compliance-related activities on your behalf, you may also rely on our highly experienced team to identify tax risks and potential opportunities for tax
optimization.

Last but not least, our team has access to the large KPMG global pool of knowledge and resources and works in co-operation with other KPMG Direct Tax practices around the world. This enables us to serve your direct tax needs with the highest standard of quality.

Our key services in the area of direct taxes include:

 

Direct tax planning and advisory

• Providing strategic advice in all stages of the life cycle of various business ventures: advice on market entry strategies, tax structuring/planning, ongoing tax support, advice on various exit strategies, liquidation assistance
• Analysis of complex cross-border arrangements in terms of permanent establishment exposure and related tax implications and reporting obligations, opportunities for seeking DTT relief in Macedonia or claiming tax credit for taxes paid in foreign jurisdictions 
• Analysis of specific contract arrangements and their impact on the company’s direct tax position   

Tax reviews

• Performing comprehensive full scope reviews of the direct tax compliance status of companies to identify opportunities and risks and providing   recommendations for improvement
• Performing quick scan tax reviews aimed to identify material direct tax risks and opportunities based on interviews with the client’s key personnel 
• Performing topical reviews of key or repetitive issues for the particular industry and their tax implications, and providing recommendations based on our knowledge and experience in the sector

Direct tax compliance services

Services related to tax returns and tax payments

• Preparation/review of corporate income tax return
• Preparation/review of withholding tax return 
• Preparation/review of personal income tax return 
• Preparation of advance CIT installments

Tax accounting services (IFRS and US GAAP)

• Preparation/review of quarter and year-end current tax and deferred tax provision under IFRS and US GAAP, the required statutory disclosures and footnotes, and the relevant accounting journal entries   
• Analysis and documenting uncertain tax positions (FIN 48 provisions) for US GAAP purposes 
• Group tax reporting for statutory and management purposes using client’s own software or KPMG proprietary software

DTT application assistance

• Providing advice on the applicable procedures and documentation required to obtain DTT clearance   
• Practical assistance in filing DTT application claims and handling follow-up communications with the authorities   
• Preparation/review of written explanations and documentation to be provided in response to specific revenue authorities’ queries  
• Advice and assistance in obtaining tax residence certificates from the Macedonian authorities for the purpose of claiming DTT relief abroad

 

Assistance in tax refund procedures, tax audit assistance and tax litigation

• Assisting businesses with filing tax refund claims for reimbursement of incorrectly paid or overpaid taxes, including corporate income tax, withholding tax, personal income tax
• Assisting in tax audits and in handling communications with the inspectors
• Appealing direct tax assessments and related administrative penalties
• Providing full support in the tax litigation processes   
• Representing clients before the revenue authorities in defending specific business positions and obtaining written answers on tax-related queries 
• Providing audit readiness services – assisting clients in developing policies, procedures and controls to ensure appropriate data is available for future tax audits