Worldwide VAT, GST and Sales Tax Guide 2022
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North Macedonia ey.com/GlobalTaxGuides
Skopje
GMT +1
Ernst & Young Services Dooel Skopje 8mi Septemvri Building 3, 4th floor 1000 Skopje North Macedonia Indirect tax contacts Milen Raikov (resident in Sofia, Bulgaria)
Maja Veljanova Svetlana Radenkovic
+359 (2) 81 77 100 milen.raikov@bg.ey.com +389 2 310 17 15 maja.veljanova@mk.ey.com +389 2 3101703 svetlana.radenkovic@mk.ey.com
A. At a glance Name of the tax Local name Date introduced Trading bloc membership
Administered by VAT rates Standard Reduced Other VAT number format VAT return periods Monthly Quarterly Thresholds Registration Recovery of VAT by non-established businesses
Value-added tax (VAT) Danok na dodadena vrednost (DDV) Данок на додадена вредност (ДДВ) 1 April 2000 Stabilization and Association Agreement with the European Union (SAA) European Free Trade Association (EFTA) Central European Free Trade Agreement (CEFTA) Ministry of Finance (http://www.finance.gov.mk) 18% 5%, 10% Zero-rated (0%) and exempt MK 1 2 3 4 5 6 7 8 9 10 11 12 13 Turnover in excess of MKD25 million in preceding calendar year Turnover of MKD25 million or less in preceding calendar year MKD2 million Yes
B. Scope of the tax VAT applies to the following transactions: • The supply of goods and services made in North Macedonia by a taxable person within the scope of its business activity • The importation of goods into North Macedonia (other than exempt importations) • Reverse-charge supplies by foreign legal entities to North Macedonian legal entities
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C. Who is liable A taxable person is a person that permanently or temporarily performs an independent business activity, regardless of the purposes of and the results from such business activity. Taxable persons must register for VAT when their total supplies in a year exceed MKD2 million. Also, they must register if, at the beginning of a business activity, they project the making of total annual supplies exceeding MKD2 million. Taxable persons may voluntarily register for VAT at the beginning of each calendar year or at the beginning of their business activity. Exemption from registration. The VAT law in North Macedonia does not contain any provision for exemption from registration. Voluntary registration and small businesses. Taxable persons may voluntarily register for VAT at the beginning of each calendar year or at the beginning of their business activity, regardless if they have reached the VAT registration threshold. Group registration. North Macedonian VAT law allows VAT group registration. Several VAT-
registered entities may decide to be registered as a single VAT-registered taxable person if they have a proprietary, organizational or managerial relationship.
In addition, if the tax authorities detect violation of tax principles or the possibility for violation of such principles as a result of proprietary, organizational or managerial relationship among particular entities registered as separate VAT taxable persons, they can issue a decision ordering the entities to register as a single taxable person. There is no minimum time period required for the duration of a VAT group. All members of a VAT group in North Macedonia are jointly and severally liable for VAT debts and penalties. In case of a VAT debt from any member of the VAT group, all members of the VAT group shall bear the liability for the debt. Also, for any VAT debt and interest prior to the registration as a member of the VAT group, the representative and any person in the VAT group will assume the responsibility for paying the VAT debt. Non-established businesses. Non-established businesses, unless they establish a local branch, cannot register for VAT in North Macedonia. If a supply is made by a taxable person that does not have headquarters or a branch office in North Macedonia, the VAT reverse-charge mechanism applies. Tax representatives. Tax representatives are not required in North Macedonia. There is no pos-
sibility to appoint a fiscal representative or tax agent in Macedonia. At the time of preparing this chapter, there is a proposal to introduce the concept of fiscal representatives in the VAT law, but no draft of these changes has been published yet.
Reverse charge. In North Macedonia, the reverse charge applies to the supply of goods and ser-
vices by foreign non-established legal entities to North Macedonian established taxable persons. Under the reverse-charge mechanism, the recipient of the goods or services bears the responsibility for the calculation of VAT, the submission of a VAT tax return, the payment of tax and the payment of interest in the event of a late payment. Domestic reverse charge. In North Macedonia, the domestic reverse charge applies to the follow-
ing: • Supply of construction services by a domestic constructor to an investor • Supply of construction services by a domestic subcontractor to principal constructor • Supply of waste and scrap
Digital economy. The VAT law does not stipulate specific rules relating to the taxation of the digital economy. Digital supplies, as any other supply, are taxable in North Macedonia if the place of supply is deemed to be in North Macedonia based on the general place of supply rules of the
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VAT law. Based on the law, the place of supply of telecommunication, broadcasting, software and engineering services is where the customer is established, has its permanent address or usually resides. Digital services other than the latter mentioned are generally taxable where the supplier is established, has its permanent address or usually resides. Pursuant to the Macedonian VAT law, only locally established legal entities and branches of foreign ones are obliged or may register for VAT in the country. For further details see the subsection Non-established businesses above. There are no other specific e-commerce rules for imported goods in North Macedonia. Online marketplaces and platforms. No special rules exist for online marketplaces and platforms in North Macedonia. Registration procedures. Taxable persons apply for VAT registration by filing a hard copy form (DDV-01) with the tax authorities the Public Revenue Office (Regional Directorate Office; 11th October St. 27, Skopje 1000, North Macedonia) or electronically through the e-tax system (www. etax-fl.ujp.gov.mk). The electronic VAT registration can be submitted by an authorized accountant. The relevant form can be submitted by the legal representative or by an authorized person of the taxable person. The deadline to submit the VAT registration form is 15 days from the day the taxable person meets the VAT registration obligation. The average time for the tax authorities to complete the registration is seven working days following the day the registration form is submitted. Deregistration. Taxable persons stay VAT registered for at least three years following the year of VAT registration. If in the third year, the taxable person does not reach the VAT registration threshold of MKD2 million (regardless if in the first and second year the threshold has been reached), it is entitled to request to be deregistered at the beginning of the following year. The tax authorities may deregister the taxable person before the three-year period lapses in any of the following circumstances: • In the year preceding the deregistration, with the VAT returns, the taxable person did not report taxable supplies and input tax • In the two years preceding the deregistration, the taxable person did not calculate output tax • The taxable person cannot be found on the registered address • The taxable person failed to submit VAT returns in two VAT periods for monthly and quarterly VAT payers • The taxable person committed tax fraud • In cases where the criteria for VAT group registration is met
The related party may decide to terminate the group registration by applying for deregistration. The tax office shall accept or reject the application within 90 days from its filing. Changes to VAT registration details. In case of change in the VAT registration details, the taxable
person is obliged to submit an application in paper form (form RDO). The application may be submitted by the taxable person or person authorized by the taxable person. There is no prescribed deadline for submission of the form RDO upon change in the registration details. However, failure for timely reporting of the new details may cause delay in receiving notifications from the tax authorities.
D. Rates The term “taxable supplies” refers to supplies of goods and services and imports that are subject to VAT, including the zero-rate. The VAT rates are: • Standard rate: 18% • Reduced rate: 5%, 10% • Zero-rate: 0%
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The standard rate of VAT applies to all supplies of goods or services, unless a specific measure provides for a reduced rate, the zero-rate or an exemption. Some supplies are classified as “exempt-with-credit” (i.e., zero-rated (0%)), which means that no VAT is due, but the supplier may recover related input tax. Examples of supplies of goods and services taxable at 0% (i.e., exempt-with-credit)
• International air transport of passengers • Supply of precious metals for the central bank • Supply, repair and maintenance, chartering and leasing of aircraft
Examples of supplies of goods and services taxable at 5% • Potable water from public water supply entities • Food products • Computers • Pharmaceuticals and medical devices • Raw oil for production of food for human consumption • First sale of new residential buildings (within the first five years) • Services provided by commercial tourist facilities (hotels, motels and similar facilities) The new reduced rate of 10% applies from 1 January 2021. Examples of supplies of goods and services taxable at 10%
• Restaurant services, specifically serving food and beverages for onsite consumption, except alcoholic beverages. • Supply and import of electricity for households (from 1 July 2022 to 30 June 2023) The term “exempt supplies” refers to supplies of goods and services that are not subject to tax and that do not give rise to a right of input tax deduction. Some supplies are classified as “exempt with credit,” which means that no VAT is due, but the supplier may recover related input tax. Examples of exempt supplies of goods and services
• Rental of residential buildings and apartments that are used for housing • Banking and financial services • Insurance and reinsurance • Games of chance • Educational services Option to tax for exempt supplies. The option to tax exempt supplies is not available in North
Macedonia.
E. Time of supply The moment when VAT becomes due is called the “time of supply” or the “tax point.” The tax point is the earlier of the following two dates: • The date on which goods are dispatched (transferred) and services are completely delivered • The date on which the payment is received if the payment is made with respect to future supplies of goods or rendering of services In the case of periodical or continuous supplies for which subsequent payments are prescribed, the tax point is the date on which the invoice is issued for the relevant period or, if earlier, the date on which the payment for the relevant period is received. Deposits and prepayments. VAT becomes due on advance payments at the moment when the
prepayment is received. The VAT is due proportionally on the amount of the payment made
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before the taxable event. The prepayment is considered to be VAT inclusive. The VAT should be charged, and invoice should be issued within five days after receipt of the advance payment. There is no difference in the time of supply rules for deposits and prepayments for supplies of goods or services, and also if the amounts are refundable or nonrefundable. If the supply does not take place, and the prepayment is refunded, the supplier should correct the VAT charged on the prepayment and submit a corrective VAT return for the period in which the VAT was charged. Continuous supplies of services. The time of supply for periodic or continuous supplies is the date
of each payment or the date when the payment is due, whichever is the earlier. If a supply is rendered continuously for more than one year and if no payment is made or due during that period, the date of supply is considered the end of the calendar year.
Goods sent on approval for sale or return. There is no special time of supply rules in North Macedonia for supplies of goods sent on approval for sale or return. As such, the general time of supply rules apply (as outlined above). Under the general tax point rules, VAT is due on the earliest of the supply of goods, the receipt of payment or the issue of an invoice. In case of return of goods, the taxable person is entitled to correct the VAT charged earlier by making appropriate correction of the VAT return of the tax period when the VAT was charged. Reverse-charge services. Reverse-charge VAT applies to amounts charged for goods or services supplied by foreign legal entities to North Macedonian legal entities. Under the reverse-charge mechanism, the recipient of the goods or services bears the responsibility for the calculation of VAT, the submission of a VAT return, the payment of tax and the payment of interest in the event of a late payment. Leased assets. The time of supply for leased assets may vary in view of the type of lease and the specific contractual arrangements: • Operational leases (rentals) are taxed for Macedonian VAT purposes as supplies of services. VAT be-comes chargeable proportionately on each installment, and the time of supply follows the rules for periodic and continuous supplies (see below). • Finance leases are taxed either as a supply of services (rentals) or as a supply of goods depending on the contractual arrangements VAT becomes chargeable proportionately on each. VAT becomes chargeable proportionately on each installment if the lease is considered a supply of rental service. A finance lease qualifies as a supply of goods (and the time of supply is upon handing over of the leased asset) if the legal title over the leased asset will transfer upon expiry of the lease term or an option for transferring the title on the leased asset is envisaged, but the total amount of the lease installments, less the interest payments, equals the fair value of the leased asset. VAT on the total price of the goods received under financial leasing with option to transfer their legal title, would be chargeable upon the handing over of the goods if the total amount of the lease installments is identical to the fair value of the leased goods upon inception of the lease. Imported goods. Imported goods are subject to VAT unless they are exempt from VAT by law. The
import VAT is calculated by the customs authorities based on the customs value of goods, increased with the customs duty, excise duty and commission, transportation and insurance fee. The import VAT is paid to the customs office simultaneously with the payment of the customs and excise duties.
F. Recovery of VAT by taxable persons A taxable person may recover input tax, which is VAT charged on goods and services supplied to it for business purposes. A taxable person generally recovers input tax by deducting it from
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output tax. The difference between the output and input tax is refunded to the taxable person based on a written claim stated in the taxable person’s tax return. The time limit for a taxable person to reclaim input tax in North Macedonia is 30 days. The deadline for reclaiming the input tax from a previous period is 30 days, from the submission of the tax return (monthly or quarterly tax return). From 1 January 2021, taxable persons will be entitled to use the excess amount between the input tax and the VAT payable for settling thirdparty tax obligations. Such a request should be made with the VAT return and shall be allowed, provided that the taxable person does not have unsettled tax obligations. Input tax includes VAT charged on goods and services supplied in North Macedonia, VAT paid on imports of goods and VAT self-assessed under the reverse-charge mechanism with respect to goods or services supplied by non-established entities. VAT is recoverable for supplies provided to taxable persons by other taxable persons if a valid invoice or a customs declaration containing a separate statement of the tax collected on the import is issued and if such document is recorded in the accounting books of the taxable person. Nondeductible input tax. Input tax may not be recovered on purchases of goods and services that are not used for business purposes (for example, goods acquired for private use by an entrepreneur). In addition, input tax may not be recovered for some items of business expenditure.
The following lists provide some examples of expenses for which input tax is not deductible and examples of expenses for which input tax is deductible if made for business purposes. Examples of items for which input tax is not deductible
• Representation expenses • Audio and video devices • Hotels • Restaurant meals Examples of items for which input tax is deductible
• Advertising • Consultancy services • Telecommunication services • Equipment Partial exemption. Input tax directly related to taxable supplies is fully recoverable, while input tax directly related to exempt supplies is not recoverable. If the domestically supplied or imported goods or services are used by the taxable person to make both supplies with the right to deduct input tax and exempt supplies without the right to deduct input tax, such person may deduct only the portion of the input tax corresponding on a pro rata basis to the supplies giving rise to an input tax deduction.
Approval from the tax authorities is not required to use the partial exemption standard method in North Macedonia. Special methods are not allowed in North Macedonia. Capital goods. There are no special input tax recovery rules for capital goods. As such, normal input tax recovery rules (as outlined above) apply. Refunds. If the amount of input tax recoverable in a tax period exceeds the amount of output tax
in that period, the taxable person earns an input tax credit. In general, the input tax credit is carried forward to offset output tax in the following tax period. However, a taxable person may claim a refund of the input tax credit in the VAT return for the relevant tax period. The refund of the difference between the input and output tax is made within 30 days after the date of the submission of the tax return.
1222 N O RT H M AC E D O N I A Pre-registration costs. Input tax incurred on pre-registration costs in North Macedonia is not
recoverable.
Bad debts. Output tax accounted for on supplies that do not get paid by the recipient (i.e., a bad
debt) cannot be recovered in North Macedonia.
Noneconomic activities. Input tax incurred in relation to noneconomic activities is not recoverable
in North Macedonia.
G. Recovery of VAT by non-established businesses On the condition of reciprocity North Macedonia refunds VAT incurred by businesses that do not have a headquarters or a branch office in the country and that satisfy the following additional conditions: • It does not make any supplies in the country • It does not owe any outstanding VAT There is no official list of countries with which North Macedonia has reciprocity. In general, it is decided on a case-by-case basis. The deadline for refund claims is 30 June of the year following the calendar year in which the tax becomes chargeable. The application for refund must be submitted to the North Macedonian tax authorities and must be accompanied by the appropriate documentation. A refund application must be processed within six months after the date of submission of the application and supporting documents. The claim period varies between one month and several consecutive months in one calendar year. The minimum claim for these periods is MKD30,000. In the claims for the last month of the calendar year, input taxes from previous claim periods may also be taken into account. The minimum claim for this period is MKD15,000. Claims are paid in domestic currency (MKD) into a bank account opened by the applicant in North Macedonia. One of the mandatory conditions is the business must have an opened nonresident bank account prior to the submission of the application for the VAT refund. The applicant should meet the following conditions: • Reciprocity • Has not performed any trading activities in the country except for services related to import, export and transit • Has performed business activity in the country for which the recipient of the goods or the purchaser of the services shall bear the tax in accordance with the law on VAT • The amount of the tax refund claim must be at least equal to the minimum threshold of MKD30,000 (approx. EUR500)
H. Invoicing VAT invoices. A North Macedonian taxable person must issue invoices for all of its taxable sup-
plies. A document qualifies as a valid invoice if it complies with the requirements set out in the North Macedonian VAT Act. The invoice must be issued within five working days after the date of the supply. If an invoice is issued both for taxable supplies and nontaxable supplies, each supply must be stated separately. If a nontaxable supply is made, it must be stated on the invoice that “the valueadded tax is not calculated”.
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A taxable person delivering taxable goods to recipients of goods or services who are not taxable persons (end consumers) must record the supply through a cash register and issue a receipt, regardless of whether the recipient of such goods or services requests a receipt. Credit notes. A credit note may be used to reduce VAT charged and claimed back on a supply. A credit note must be cross-referenced to the original invoice. However, no official rules have been issued with respect to credit notes. Electronic invoicing. Electronic invoicing is allowed in North Macedonia, but not mandatory.
Based on the law, the supplier must obtain explicit written consent by the recipient of the electronic invoices, to allow them to receive electronic invoices. Electronic invoices should be protected from any subsequent alteration and modifications and signed with an electronic signature of the person authorized for signing invoices on behalf of the legal entity. The electronic signature of the authorized person must be issued by an authority authorized for issuance of electronic signatures.
As an exception, from 1 November 2020, a document provided in an electronic form, containing all the mandatory information, will be considered as an electronic invoice. The supplier will be obliged to notify the recipient of services/goods that the invoices will be issued electronically. The recipient is entitled to refuse a receipt of electronic invoices within a period of 10 days after the supplier’s notification, as otherwise it will be considered that electronic invoicing is accepted. In respect of the above, taxable persons are not obliged to sign the invoices with the electronic signature issued by an authority authorized for issuance of electronic signatures. This will be applicable only until 31 December 2021. Simplified VAT invoices. Simplified VAT invoicing is not allowed in North Macedonia. As such,
full VAT invoices are required.
Self-billing. Self-billing is not allowed in North Macedonia. Proof of exports. The taxable person must hold an export customs clearance issued by the cus-
toms authorities as proof that the goods are exported from the country. If the export customs procedure does not require an export clearance to be issued, the taxable person must hold a document issued by the customs authorities that displays the name and address of the taxable person and the foreign recipient of the goods, trade name of the goods and the quantity of the goods exported, place and date of export. Foreign currency invoices. In general, VAT invoices must be issued in the domestic currency, which is the Macedonian denars (MKD), if the place of supply is North Macedonia. If a VAT invoice is issued in a foreign currency, all values required for VAT purposes must be converted into MKD for tax purposes, using the rate published by the National Bank of North Macedonia on the date of the invoice. Supplies to nontaxable persons. A taxable person delivering taxable goods or services to persons
who are not taxable persons (private consumers) must record the supply through a cash register and issue a receipt, regardless of whether the recipient of such goods or services requests a receipt.
Records. Taxable persons should keep records of all documents (invoices, supporting documenta-
tion, etc.). All records must be kept locally in the country in any given time.
Record retention period. Taxable persons should hold records for a minimum of five years. Considering that the status of limitation is 10 years in case of fraud, taxable persons must keep their records for the period of 10 years. Electronic archiving. Electronic archiving of the submitted tax returns and any related supporting documentation is permissible.
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I. Returns and payment Periodic returns. The tax period is the calendar month if the total turnover in the preceding cal-
endar year exceeded MKD25 million. Taxable persons that had a total turnover in the preceding year of less than MKD25 million must file VAT returns and pay VAT quarterly. Newly registered taxable persons projecting an annual turnover of more than MKD2 million must register for VAT and make quarterly VAT return filings. Taxable persons must calculate the VAT for the relevant tax period for all supplies made that are subject to VAT. Taxable persons must submit a tax return within 25 days after the end of the relevant tax period. Periodic payments. For monthly filing, provided that the amount of the total turnover of the tax-
able person in the preceding year is at least MKD25 million, the taxable person is obliged to file a monthly VAT return. The filing and the payment are performed no later than the 25th of the month following the reporting month. For quarterly filing, provided that the amount of the total turnover of the taxable person in the preceding year is below MKD25 million, the taxable person is obliged to file a VAT return on quarterly basis. The filing and the payment are performed no later than the 25th of the month following the reporting month. As of 1 January 2021, the payment of the VAT due will be in a period of five days as of the deadline for submission of the VAT return, meaning no later than the 30th of the month following the reporting month. In the abovementioned cases, the payment of the due VAT must be made through a bank transfer on the treasury account of the National Bank of North Macedonia. Electronic filing. Electronic filing is mandatory in North Macedonia for all taxable persons. After the VAT registration and before the deadline for filing the first tax return, the taxable persons must register for electronic filing. Payments on account. Payments on account are not required in North Macedonia. Special schemes. Tour operators. The provisions apply to tourist services of a taxable person, if the same acts toward the tourists in his own name and receives goods and services from third parties that are of direct benefit to the tourists.
Tourist services provided by the tour operator are considered as a single service, taxed with 18% VAT. The place of supply of the service shall be deemed to be the place where the service provider has its establishment/residence. The taxable base is determined as the difference between the amount paid by the tourist for the tourist trip and the expenses paid by the tour operator for the previously ordered tourist services by the tour operator. The tour operator can determine the tax base either for each service separately, for a group of tourists services or for all tourist services together within a certain tax period. The tour operator is not eligible to deduct input VAT for the previously received supply by third parties. Investment gold. According to the VAT law, the following is considered as investment gold (not for sale for numismatic purposes): • Gold in the form of rods or plates with a weight accepted by the precious metal markets and with a fineness equal to or greater than 995 thousand parts, regardless of whether it is secured in the form of securities or not • Gold coins, with a fineness equal to or greater than 900 thousand parts, minted after 1800, which in the country of origin are or were legal means of payment and are usually sold at a price not exceeding 80% of the value of gold contained in the coin, on the free market
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Trade and import of investment gold, including investment gold represented by certificates for allocated (unsecured) or unallocated (unsecured) gold or traded through gold trading accounts, as well as loans in gold and gold swaps (swap), which acquires ownership of investment gold, and transactions relating to investment gold involving futures and forward contracts resulting in the transfer of ownership or a claim relating to investment gold, are VAT exempt. Intermediary services related to investment gold are also VAT exempt. Input tax can be recovered for sale of investment gold that is VAT exempted and for manufacturing of investment gold or conversion of gold into investment gold, if certain conditions are met. The taxable persons are required to keep evidence of the performed supply related to investment gold. Annual returns. Annual returns are not required in North Macedonia. Supplementary filings. No supplementary filings are required in North Macedonia. Correcting errors in previous returns. In case of incorrect VAT reporting, VAT taxable persons should prepare and submit corrected VAT returns via the online e-tax platform no later than the deadline pre-scribed for submission of the annual accounts, i.e., 27/28 February, for annual accounts that are being submitted in hard copy, or 15 March when the annual accounts are being submitted online. As an exception, the taxable person is obliged to make a correction of incorrect or incomplete tax return in the last tax return from the calendar year to which the error relates, in case the more or less reported tax in the relevant tax period is less than 1% of the declared tax. Digital tax administration. Fiscal cash registries. Taxable persons performing sale of goods and services for which the payments are made in cash are obliged to install and use a fiscal cash registries’ system (the system) for purposes of issuing fiscal receipts. The system comprises the cash registry and software system. The software system is further comprised on a GPRS (General packet radio service) terminal and crypto module, which at the end is connected with the Public Revenue Office (PRO). The software system automatically generates and sends daily financial report to the PRO. Taxable persons that are not obliged to have cash registries do not have transactional reporting requirements in North Macedonia. In addition, local banks are obliged to provide the tax authorities with monthly reports on taxable persons’ bank accounts.
J. Penalties Penalties for late registration. For late registration, a legal entity may be fined EUR300– EUR10.000, depending on the size of the legal entity (micro, small, medium and large legal entity) (approx. MKD18,450 to MKD615,000) and the responsible person at the legal entity may be fined EUR50 to EUR500 (approx. MKD3,000–MKD30,000), depending on the size of the legal entity.
For failure to register, the fine is EUR300 to EUR10,000, depending on the size of the legal entity (approx. MKD18,450 to MKD615,000) for the legal entity and the responsible person at the legal entity may be fined EUR50 to EUR500 (approx. MKD3,000–MKD30,000), depending on the size of the legal entity. Note that fines are payable in the local currency (MKD). However, the VAT law prescribes all of the fines in EUR. The MKD counter value of the penalty is calculated in accordance with the applicable middle exchange rate published by the National Bank on the day when the penalty is imposed. Also, the exact currency equivalent can be calculated on the day when the penalty is imposed, in accordance with the applicable middle exchange rate published by the National Bank.
1226 N O RT H M AC E D O N I A Penalties for late payment and filings. For failure to timely file the respective tax return, the legal entity may be fined with EUR300 to EUR10,000, depending on the size of the legal entity (micro, small, medium and large legal entity) (approx. MKD18,450 to MKD615,000) and the responsible person at the legal entity may be fined EUR50 to EUR500 (approx. MKD3,000 to MKD30,000), depending on the size of the legal entity. The same penalties apply if the legal entity fails to pay the VAT into the authorities’ bank account into which registered VAT payers must pay their VAT or if the legal entity makes inaccurate VAT accounting entries.
Taxable persons that make a late VAT payment are liable to pay interest on the tax due at a rate of 0.03% for each day of delay. Penalties for errors. For invoices, they should be issued in a period of five days, as of the day when the supply of goods/services was made. A legal entity may be fined with EUR300 to EUR10,000, depending on the size of the legal entity (micro, small, medium and large legal entity) (approx. MKD18,450 to MKD615,000) and the responsible person at the legal entity may be fined EUR50 to EUR500 (approx. MKD3,000 to MKD30,000), depending on the size of the legal entity. The same penalty applies in cases where the taxable person keeps records incorrectly, issues irregular invoices and does not keep the invoices and other records within the prescribed deadline. Penalties for fraud. The responsible person at a legal entity that does not file a tax return within the prescribed deadline, presents inaccurate/false information in the tax returns and in that manner makes misrepresentation of their tax position, or submits a tax return but fails to pay the due tax and for the purposes of gaining greater property gain or value may be imposed to a criminal liability – prison in duration of six months up to five years and with a monetary fine. In cases where the tax fraud is of a significant amount, the responsible person will be exposed to criminal liability – prison, in duration of at least four years and a monetary fine. The legal entity will be exposed to a monetary fine. The gains from the tax fraud shall be confiscated by virtue of judicial ruling. Personal liability for company officers. Company officers can be held personally liable for errors and omissions in VAT declarations and reporting in North Macedonia. Please see the various subsections above for further details on each type of penalty that can be imposed. Statute of limitations. The statute of limitations in North Macedonia is five years. The determina-
tion of the tax and ancillary taxes, their change and termination is not allowed, if the statute of limitations has expired. The statute of limitations regarding taxes and ancillary taxes begins at the end of the year in which a factual situation has occurred. The statute of limitations is 5 years, and in cases of tax evasion it is 10 years. In any case, upon expiration of 10 years, the determination of tax and ancillary tax is obsolete.