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North Macedonia VAT Guide 2026

North Macedonia's Value Added Tax (VAT) is set at 18% standard rate with a reduced rate of 5% for basic necessities (food, medicine, accommodation, public utilities, agricultural inputs, and books). Exports of goods and certain international services are zero-rated. The registration threshold is MKD 2 million in annual turnover. VAT returns are filed monthly or quarterly through the PRO's e-Tax system.

Overview — VAT in North Macedonia

VAT is governed by the Law on Value Added Tax and administered by the Public Revenue Office (PRO). The tax applies to the supply of goods and services by registered persons in the course of business, and to imports. North Macedonia operates a standard credit-method VAT system where businesses can deduct input VAT from their output VAT liability. Businesses with annual turnover exceeding MKD 2 million must register for VAT. Voluntary registration is permitted for businesses below the threshold. Non-resident businesses making taxable supplies in North Macedonia may also be required to register. The VAT year aligns with the calendar year.

VAT Rate Structure

North Macedonia has a three-tier VAT rate structure:

  • Standard rate — 18% on most goods and services
  • Reduced rate — 5% on basic foodstuffs, medicines, medical devices, water supply, books, newspapers, public transportation, accommodation services, agricultural inputs, and funeral services
  • Zero rate — 0% on exports of goods, international transport, and related services

Certain supplies are exempt from VAT without input VAT recovery, including financial services (banking, insurance), educational services, healthcare services, and postal services. Exempt supplies cannot recover input VAT, creating a cascading effect.

Registration Threshold — MKD 2 Million

Businesses with annual turnover exceeding MKD 2 million must register for VAT with the PRO. The registration threshold applies to both resident and non-resident businesses making taxable supplies in North Macedonia. Once registered, the business must issue VAT invoices showing the VAT amount separately, file regular VAT returns, and maintain proper records. Non-resident businesses without a permanent establishment may need to appoint a tax representative in North Macedonia for VAT purposes. The threshold is reviewed periodically and may be adjusted for inflation.

VAT Filing & Payment

VAT-registered businesses must file returns monthly (by the 25th of the following month) or quarterly (for small taxpayers, by the 25th of the month following the quarter). The VAT return reports output VAT on sales, input VAT on purchases, and the net VAT payable or refundable. VAT is due at the time of filing. If input VAT exceeds output VAT, the excess may be carried forward or refunded (subject to PRO verification). Late filing penalties range from MKD 1,000 to MKD 50,000 depending on the delay. Interest on late payment accrues at the statutory rate.

VAT Refunds & Exemptions

Exporters and businesses with excess input VAT can claim refunds from the PRO. The refund process typically takes 30-60 days. Certain imports are exempt from VAT, including capital equipment imports under investment incentive programmes and goods imported by diplomatic missions. The PRO may conduct VAT audits and request supporting documentation for refund claims. Businesses engaged solely in zero-rated supplies (exports) may obtain VAT refunds for input tax incurred on purchases related to those supplies.

FAQs

Is VAT registration mandatory for foreign e-commerce sellers?

Yes, foreign businesses selling goods or services to consumers in North Macedonia may be required to register for VAT if their annual sales exceed the MKD 2 million threshold. The PRO has been strengthening enforcement against non-compliant foreign sellers.

Can I claim input VAT on a car purchase?

Input VAT on passenger cars is generally not recoverable unless the vehicle is used exclusively for business purposes (e.g., taxi, driving school, or delivery). Partial recovery may be available for mixed-use vehicles.

What is the penalty for issuing a false VAT invoice?

Issuing false VAT invoices is a serious offence carrying penalties of up to MKD 200,000 for companies and potential criminal charges for responsible individuals.

Disclaimer

This guide provides general information about North Macedonian VAT 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.