Taxpayer
A taxpayer of profit tax is a legal entity (subject) – a resident of the Republic of Macedonia, as well as a permanent establishment of a foreign legal entity, for the profit they earn from conducting business activities within the territory of the Republic of Macedonia.
Tax Rate
The profit tax rate is 10%.
Tax Base
The tax base for profit tax for the relevant tax period (one calendar year) is the profit determined in the tax balance sheet.
The basis for calculating the profit tax is determined as the difference between the total revenues and total expenses of the taxpayer, in amounts established according to accounting regulations and standards, increased by non-deductible expenses for tax purposes, and then reduced by the amount of collected receivables that were treated as non-deductible expenses in the previous tax period.
Tax Reliefs and Exemptions
The taxpayer is entitled to a tax exemption based on reinvested profit for investments made in tangible assets (real estate, facilities, and equipment) and intangible assets (computer software and patents) aimed at expanding the taxpayer's business activity.
A taxpayer operating within a technological industrial zone benefits from profit tax exemption as part of state aid, under conditions and procedures defined by the Law on Technological Industrial Development Zones.
A taxpayer required under the Law on Registration of Cash Payments to implement and use a fiscal system for registering cash payments is entitled to a reduction of the calculated tax for up to ten acquired fiscal devices, equal to their value.
Simplified Tax Regime for Trade Companies
Trade companies classified as small and micro traders are exempt from the obligation to pay profit tax for total income earned up to 3,000,000 denars.
Trade companies that earn a total income of 3,000,001 to 6,000,000 denars during the year are given the option to choose their taxation regime/model, allowing them to pay tax on total income at a rate of 1%, instead of the 10% profit tax rate prescribed by the current law.
Withholding Tax on Income Paid to Foreign Legal Entities
Withholding tax is applied to the following types of income, regardless of whether they are paid in the Republic of Macedonia or abroad:
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Income from dividends;
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Interest income from a resident;
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Interest income from a non-resident with a permanent establishment in the Republic of Macedonia, if the interest is at the expense of the permanent establishment;
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Income from royalties paid by a resident;
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Income from royalties paid by a non-resident with a permanent establishment in the Republic of Macedonia, if the royalties are at the expense of the permanent establishment;
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Income from entertainment or sports activities conducted in the Republic of Macedonia;
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Income from management, consulting, financial services, and research and development services, if the income is paid by a resident or at the expense of a permanent establishment in the Republic of Macedonia;
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Income from insurance premiums for insurance or reinsurance of risks in the Republic of Macedonia;
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Income from telecommunication services between the Republic of Macedonia and a foreign country; and
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Income from leasing real estate in the Republic of Macedonia.
