🇲🇰 North Macedonia Tax Guide — Income, Corporate & VAT Rates

Tax rates in North Macedonia range from 10% to 18% for personal income tax, with a corporate tax rate of 10% and a standard VAT rate of 18%, making it a relatively tax-friendly country for individuals and businesses.

Tax System Overview

North Macedonia has a territorial taxation system, where individuals and companies are taxed on their income earned within the country's borders. However, residents are also subject to worldwide taxation, meaning they are taxed on their global income, with credits available for taxes paid in other countries. To be considered a tax resident in North Macedonia, an individual must have a permanent home in the country, or spend more than 183 days in the country within a 12-month period.

The tax system in North Macedonia is relatively straightforward, with a flat corporate tax rate and a progressive personal income tax system. The country has also implemented various incentives to attract foreign investment, including free zones and tax holidays for certain industries. Taxpayers can file their tax returns electronically, and the tax authority provides guidance and support to help individuals and businesses comply with tax laws.

Personal Income Tax

Corporate & Business Tax

• The corporate tax rate in North Macedonia is 10%, one of the lowest in Europe.
• Small businesses with annual revenues below 3 million MKD are eligible for a reduced tax rate of 5%.
• The country has several free zones, including the Skopje and Stip free zones, which offer tax holidays and other incentives for foreign investors.
• Companies must register with the tax authority and obtain a tax identification number within 15 days of establishment.
• Tax returns must be filed by March 31st of each year, and companies can file electronically or through a tax agent.

VAT / Sales Tax

• The standard VAT rate in North Macedonia is 18%, applicable to most goods and services.
• A reduced VAT rate of 5% applies to basic foodstuffs, pharmaceuticals, and other essential goods.
• Certain goods and services, including healthcare and education, are exempt from VAT.
• Foreign tourists can claim a refund of VAT paid on goods purchased in North Macedonia, provided they meet certain conditions.

For Expats & Foreign Workers

• Foreign workers are considered tax residents in North Macedonia if they spend more than 183 days in the country within a 12-month period.
• Tax residents are taxed on their worldwide income, with credits available for taxes paid in other countries.
• North Macedonia has double taxation treaties with 44 countries, including the US, UK, and Canada.
• Foreign workers must register with the tax authority and obtain a tax identification number within 30 days of arrival.
• Social security contributions are mandatory for all employees, including foreign workers.
• Remittances of foreign-sourced income are subject to tax, but credits are available for taxes paid in other countries.

Crypto & Investment Income

• Investment income, including dividends and interest, is subject to a 10% withholding tax.
• Capital gains from the sale of securities are taxed at a rate of 10%, or are included in income and taxed at the applicable rate.
• Cryptocurrency is considered a financial asset, and gains from its sale are subject to capital gains tax.
• Taxpayers must report their cryptocurrency transactions on their tax return, and are subject to penalties for non-compliance.