North Macedonia Corporate Tax Guide 2026

Overview — Corporate Tax in North Macedonia

Corporate tax is governed by the Law on Profit Tax and administered by the Public Revenue Office (PRO). A company is tax resident if it is incorporated under Macedonian law or if its place of effective management is in North Macedonia. Resident companies are taxed on worldwide income; non-resident companies with a permanent establishment are taxed on Macedonian-source income only. Companies must register for tax with the PRO and obtain a tax identification number. The standard CIT rate is 10% of taxable profit. The tax year aligns with the calendar year, though companies may apply for a different fiscal year with PRO approval.

Standard CIT Rate — 10%

The standard corporate income tax rate is 10% of taxable profit. Taxable profit is computed as gross revenue less allowable deductions including operating expenses, depreciation, interest costs (subject to thin capitalisation rules), and losses carried forward. Losses may be carried forward for up to 5 years. Capital gains are included in taxable profit and taxed at the standard 10% rate. Withholding taxes on dividends, interest, and royalties paid to non-residents are separate obligations.

Tax Incentives — Technology & Manufacturing

North Macedonia offers attractive tax incentives for qualifying businesses:

• Technology Development Zones — 0% CIT for 10 years in designated technological industrial development zones (TIDZ)
• Employment incentives — tax relief for newly employed workers in manufacturing, IT, and R&D sectors
• Free economic zones — exemption from customs duties, VAT, and excise taxes on imports of equipment and raw materials
• R&D deduction — 200% deduction of qualifying R&D expenses from taxable income
• Investment allowance — 10% tax credit for investments in fixed assets (machinery, equipment, buildings)

The IT sector has been a key growth area, with North Macedonia emerging as a competitive outsourcing destination in the Balkans.

Capital Allowances (Depreciation)

Depreciation for tax purposes is calculated using the straight-line method at the following annual rates:

• Computers and software — 25%
• Plant and machinery — 10%
• Buildings — 5%
• Motor vehicles — 20%
• Office furniture and equipment — 10%
• Intangible assets (patents, licences) — 20%

Accelerated depreciation is available for environmental protection and energy efficiency investments.

Thin Capitalisation & Interest Deductibility

Interest on related-party debt is deductible subject to thin capitalisation rules. The maximum allowable debt-to-equity ratio is 4:1 (debt exceeding equity by no more than 4 times). Interest on debt exceeding this ratio is disallowed as a deduction. Interest on third-party debt is generally fully deductible. Transfer pricing rules apply to related-party transactions, requiring arm's length pricing in accordance with OECD guidelines.

FAQs

What is the penalty for late filing of corporate tax returns?

Late filing attracts a penalty of up to MKD 100,000 for companies, plus interest on any unpaid tax at the statutory rate (currently 0.03% per day).

Can a foreign company incorporate a subsidiary in North Macedonia?

Yes, foreign companies can incorporate a d.o.o. (limited liability company) with minimum share capital of EUR 5,000 (approximately MKD 307,000). There are no restrictions on foreign ownership in most sectors.

Is there a withholding tax on dividends paid to non-residents?

Yes, dividends paid to non-residents are subject to 10% withholding tax, which may be reduced under applicable double tax treaties.

Disclaimer

This guide provides general information about North Macedonian corporate tax for the 2026 tax year. Tax laws and rates may change. Always consult with a qualified Macedonian tax advisor or the Public Revenue Office for advice specific to your situation. InvestmentKit does not provide tax advice.