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February 12, 2024

North Macedonia adopts new VAT rules

  • Further definition has been added for: (i) the process under which a fiscal representative is appointed by a foreign taxpayer that does not have a registered seat or branch in North Macedonia and performs business-to-consumer services; and (ii) the manner in which the fiscal representative must issue invoices.
  • Definitions have been broadened for telecommunication, broadcasting and electronically supplied services, services related to leases for means of transport, and the place of supply for these services.

The Ministry of Finance of North Macedonia recently adopted two new rulebooks of interest to taxpayers affected by the value added tax (VAT).

Following the adoption of the amendments of the VAT (Law on VAT) in September 2023, the Ministry of Finance on 29 December 2023 adopted a rulebook for appointment of a fiscal representative (Rulebook). In addition, on 25 January 2024 the Ministry adopted a rulebook for implementation of the Law on VAT (new Rulebook).

Rulebook for appointment of a fiscal representative

Foreign taxpayers without registered seat or branch in the country that perform business-to-consumer (B2C) services, should appoint a fiscal representative through submission of a designated form to the tax authorities along with the following documents:

  • Agreement for the appointment of a fiscal representative certified by a Notary Public
  • Tax residency certificate of the foreign legal entity
  • Proof of registered headquarters (i.e., residence of the person appointed as a fiscal representative in the territory of the Republic of North Macedonia)
  • Proof that bankruptcy or liquidation proceedings have not been initiated for the person appointed as a fiscal representative, if the fiscal representative is a legal entity; or proof that the person appointed as a fiscal representative has not been legally convicted of a criminal offense, if the fiscal representative is a natural person

The appointed fiscal representative must be registered for VAT purposes at least 12 months before the form for appointment of the fiscal representative is submitted and must also have settled all tax liabilities.

New Rulebook for implementation of the Law on VAT

Establishing taxpayer status

To establish the place of supply of services, the taxpayer provider of services should provide a certificate with a VAT number, or similar registration number, issued by the relevant tax authority proving that the recipient of the service is a taxpayer in accordance with the Law on VAT.

Place of supply related to the lease of means of transport

Means of transport are considered to be motorized or nonmotorized vehicles, as well as other equipment and devices intended for transporting people or goods from one place to another, such as, road vehicles, trailers and semi-trailers, train carriages, watercrafts, aircrafts, etc.

Means of transport do not include vehicles that are permanently removed from movement or vehicles that are not intended for the transportation of persons or goods.

The new rulebook also determines the place of supply of services based on the length of the lease, which should be defined in the lease agreement.

Definition of telecommunication, broadcasting, and electronically supplied services

Fixed and mobile telephone services, phone services through Internet, fax and telegraph, internet access, etc. are classified as telecommunication services.

Radio and television programs in which transmission or retransmission is carried out via radio or television network and, radio and television programs distributed over the Internet or a similar electronic network (IP streaming) are classified as broadcasting services.

The supply of services performed via the Internet or an electronic network and which, due to their nature, are largely performed automatically or with only minimal human participation and would not be possible without the application of information technology are classified as electronically supplied services.

Issuing invoices by a fiscal representative

A fiscal representative may issue one summary invoice for the calendar month or the calendar quarter in which the foreign entity made transactions or received payments. The foreign entity must submit the issued calculations to the fiscal representative no later than the last day of the calendar month or calendar quarter.

The summary invoice must be issued within five days after the end of the calendar month or calendar quarter.

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Contact Information

For additional information concerning this Alert, please contact:

Ernst & Young Bulgaria EOOD

Ernst & Young Services Dooel Skopje (North Macedonia)

Published by NTD’s Tax Technical Knowledge Services group; Carolyn Wright, legal editor