North Macedonia is an emerging economy that has been attracting investors and entrepreneurs from around the world. The country’s favorable tax system and strategic location have made it an ideal destination for those looking to expand their business on the Balkans.

Therefore, if you’re considering to become a tax resident in North Macedonia, there are some essential things you should know at first place.

1. Understanding Tax Residency

The first step to becoming a tax resident is to understand what tax residency actually means. In general, tax residency refers to the country in which an individual is liable to pay tax on their worldwide income.

In that sense, if you spend more than 183 days per year in North Macedonia or if you have your center of vital interests in this country, you will be considered a tax resident. Furthermore, this means that you will be required to pay taxes on all of your income, not just the income you earn in North Macedonia.

2. The Challenge called “Double Taxation “

Fortunately, the challenge of “double taxation” can be successfully overcome through the application of a well-established legal mechanism within Macedonian legal system. This mechanism acts as reliable protection against negative impacts of paying taxes twice a time, which could otherwise impose significant financial loss.

In fact, to avoid double taxation, you can take advantage of bilateral agreements between your home country and the country in which you are earning income. These legal instruments often contain provisions for reducing or eliminating double taxation on certain types of incomes. 

On that field, North Macedonia has signed taxation agreements with over 60 countries, including neighboring countries on the Balkans, the United States, Canada, as well as many EU member states. These agreements help to avoid double taxation on income earned in North Macedonia and other countries.

If your case falls within this scope of matter, then it is necessary to present an appropriate documentation required by Macedonian tax authorities, on the basis of which you’ll be receive a Tax Resident Certificate.

3. More about Tax Rates

Besides the aforementioned, even if the provisions for avoiding double taxation are not familiar with your case, the good news is that Macedonial tax system has a relatively low standard income tax rate.

North Macedonia has a flat tax rate on personal income and corporate profits, which is one of the lowest in Europe. This favorable tax system has been a key factor in attracting foreign investment and promoting economic growth in the country. This means that if you do become a tax resident, you’ll only have to pay 10% of your income in taxes.

It’s also important to note that you should declare your foreign income to the Macedonian tax authorities and keep records of any taxes paid abroad. This is a legal requirement, and not doing so could result in penalties and fines.

Additional advice on how to keep more money in your pocket!

Overall, by consulting with a legal advisor, you will be able to easily determine whether you belong to the category of tax resident within the Macedonian tax system, thus how to avoid double taxation and ensure that you are paying taxes only once on your foreign income.

This will allow you to keep more of your money and invest it in your future, whether that be in your business or your personal life!

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In conclusion, North Macedonia’s favorable tax system and investment incentives make it an attractive destination for those looking to become tax residents. However, it is essential to understand the tax residency rules, tax rates, double taxation agreements and tax filing requirements before making any decision!