North Macedonia: Amendments to direct and indirect tax legislation

Developments in tax legislation include amendments to direct and indirect tax legislation

Developments in tax legislation include amendments to direct and indirect tax legislation

Developments in the tax legislation include amendments to the law on individual (personal) income tax and proposed amendments to the law on corporate income tax and value added tax (VAT). 

Amendments to individual income tax

The amendments to the law on tax on individual income were published in Official Gazette 274/2022 from 20 December 2022 and became effective 1 January 2023. They include:

  • Abolition of the progressive/increased tax rates
  • Postponement on the taxation of interest on term deposits
  • Changes to the list of proceeds deemed not subject to taxation
  • Non-monetary benefits provided to employees
  • Changes with respect to the manner of taxation of capital gains

Amendments to corporate income tax

Proposed amendments to the corporate income tax law, which would become effective 1 January 2023, include:

  • Amendments in relation to non-deductible expenses
  • Changes with respect to transfer pricing
  • Changes in the taxation regime of small and micro companies
  • Changes in the provisions related to reinvested profit

Amendments to VAT

Proposed amendments to the VAT law concern:

  • Supply of goods
  • Supply of services
  • Vouchers
  • Introducing of the concept of a tax representative
  • Place of supply of services
  • Exchange rate
  • Changes in the list of goods and services subject to reduced tax rate:
  • Tax base for import of used passenger vehicles
  • Changes to the provisions related to the VAT refund
  • Electronic invoices

The provisions referring to tax representative and the new rules for place of supply of services are proposed to apply as of 1 July 2023.

Read a January 2023 report prepared by the KPMG member firm in North Macedonia


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