Navigating Value Added Tax (VAT) in North Macedonia for Your Business
Are you considering running a business in North Macedonia or already engaged in business activities there? Understanding the Value Added Tax (VAT) system is essential for your financial compliance and business operations.
Unpacking VAT in North Macedonia
Value Added Tax, commonly known as VAT, is a significant component of taxation in North Macedonia. It applies to the turnover of goods, services, and the import of goods. Put simply, VAT is a consumption tax that affects every stage of the supply chain.
Calculating VAT Rates
In North Macedonia, VAT is calculated using proportional tax rates applied to the tax base, which includes the total compensation received or to be received for transactions where VAT is not already included.
The general VAT rate is set at 18%, but there are preferential rates of 5% and 10% for specific goods and services.
VAT Exemptions and Exceptions
North Macedonia’s VAT law outlines a list of tax exemptions, meaning that the turnover of certain goods and services is not subject to VAT. Understanding these exemptions is crucial for proper financial planning and compliance.
VAT Registration Requirements
If you’re running a business in North Macedonia, it’s essential to know when VAT registration becomes mandatory. Generally, businesses with a total turnover exceeding 2,000,000 denars in the past calendar year or those predicted to surpass this amount are obligated to register for VAT. Businesses should submit their VAT registration report no later than January 15th of the current year.
If you start your business during the calendar year, the application must be submitted within 15 days from the commencement of operations. Additionally, if your total turnover exceeds 2,000,000 denars during the year, you must submit the report by the 15th of the following month.
Simplifying VAT for Your North Macedonia Business
Navigating the VAT system in North Macedonia may seem complex, but it’s an essential part of doing business. To ensure compliance and efficient financial management, consider seeking professional guidance or utilizing software solutions that can simplify VAT calculations and reporting.
In conclusion, understanding VAT in North Macedonia is vital for the successful operation of your business. With the right knowledge and compliance, you can focus on growing your business and contributing to the dynamic European market in North Macedonia.
Remember, VAT in North Macedonia is just one aspect of running a business there. Stay tuned for more valuable insights in our series on “Your LLC in North Macedonia.”
Martin Boshkoski
Contact the author here
Learn more about the tax system in North Macedonia, on the following link: Public Revenue Office
Note: The above does not constitute legal advice and in no way can be accepted or understood as an instruction to act in a specific case. Each legal situation has its own characteristics that should be reviewed at separately, and for that reason we recommend that you contact a professional – a lawyer – for legal advice.
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