The 2012 worldwide VAT, GST and sales tax guide

• Reverse-charge supplies by foreign legal entities to Macedonian
legal entities
C. Who is liable
A taxpayer is a person that permanently or temporarily performs
an independent business activity, regardless of the purposes of
and the results from such business activity.
Tax registration. Taxpayers must register for VAT when their total
supplies in a year exceed MKD 2 million. Also, they must register
if, at the beginning of a business activity, they project the
making of total annual supplies exceeding MKD 2 million.
Taxpayers may voluntarily register for VAT at the beginning of
each calendar year or at the beginning of their business activity.
Group registration. The Macedonian VAT law allows VAT group
registration. Several VAT-registered entities may decide to be
registered as a single VAT-registered taxpayer 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 taxpayers, they can issue a decision
ordering the entities to register as a single taxpayer.
Foreign legal entities (nonestablished businesses). Foreign traders
may not have a VAT registration number. If a supply is made by
a taxpayer that does not have headquarters or a branch office in
Macedonia, the VAT reverse-charge mechanism applies.
Late-registration penalties. For late registration, a legal entity is
fined €1,200, and the responsible person at the legal entity is
fined €500.
For failure to register, the fine ranges from €2,000 to €2,500 for
the legal entity and from €500 to €1,000 for the legal representative.
D. VAT rates
M ACEDONIA 421
The term “taxable supplies” refers to supplies of goods and services
and imports that are subject to VAT (either at the standard
rate of 18% or the reduced rate of 5%). 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
(see Section F). Some supplies are classified as “exempt with
credit,” which means that no VAT is chargeable, but the supplier
may recover related input tax. In Macedonia, the VAT rates are the
standard rate of 18% and the reduced rate of 5%. The standard rate
of VAT applies to all supplies of goods or services and imports,
unless a specific measure allows a reduced rate or an exemption.
The following tables list examples of exempt supplies of goods
and services, and supplies of goods and services that are taxed at
the 5% rate of VAT (these lists are not exhaustive).
Examples of exempt supplies of
goods and services (without credit)
Rental of residential buildings and apartments that are used for
housing
Banking and financial services