Expatriate tax ebook - Macedonia

What taxes?

Capital gains tax
Inheritance, estate & gift taxes
Investment income
Local taxes
Real estate taxes
Social security taxes
Stock options
Wealth tax
Other specific taxes

Capital gains tax
In Republic of Macedonia as the following gains from capital are taxable:

• dividends and other income realized by participation in the gain of other individuals and legal entities;
• interests on loans given to physical persons and legal entities;
• interests on bonds or other securities
• interests on time savings deposits and other deposits.

The tax rate in amount of 10% of the gain from capital applies.
Expatriate’s capital gains are taxable if realized on the territory of Republic of Macedonia unless the provisions of Double Taxation Treaty apply.

Capital gains:
Capital gains shall refer to the income realized by the taxpayer through sales of securities, share of capital and real estate. Capital gains shall be the difference between the selling price of the securities, the share of capital and real estate referred to above on one hand and the purchase price on the other.

The capital gains realized through sale of securities, share of capital and real estate shall be included in the tax base in the amount of up to 70% of the difference. When determining the base for computation of the tax on capital gains realised from a sale of real estate, besides the gains, the value of the investments and the investment maintenance expenses shall also be taken into consideration.

Inheritance, estate & gift taxes
Inheritance, estate and gift taxes are levied on the market value of the inheritance received by beneficiaries. The beneficiary is liable to pay tax on the inheritance, estate or gift received. Debts and expenses are deductible from the taxable value. The rate depends on the order of succession. Beneficiaries who are first degree relatives are not taxed. Those who are second degree relatives are taxed at 2%-3%, and all others are subject to a 4%-5% rate.

A liability to Macedonian inheritance, estate and gift tax depends not only on the Macedonian tax residence position of the deceased/donor and of the beneficiary, but also on the Macedonian location of real estate and assets when the deceased/donor is not resident in Republic of Macedonia.

Investment income
See “Capital Gains Tax”.

Local taxes
There is local tax in the Republic of Macedonia such as Property tax.

Real estate tax
The income realized from leasing or subleasing of land, habitual or business premises, garages, vacation and leisure premises, equipment, transportation means or other types of estate, is subject to Real estate tax. Basis for calculation of the Real estate tax is the net annual income decreased by 25% of the costs for management and maintenance, annual amortization and other necessary maintenance cost.

Social security taxes
Employees are obliged to pay obligatory social security contributions on gross salary as follows:

• Pension and disability social contributions 16.5%;

• Contributions for health insurance 7%;

• Contributions for employment 1.2%

• Additional health contribution 0.5%

Stock options
The value of such a benefit in kind is taxable under income tax.

Wealth tax
The value of such a benefit in kind is taxable under income tax.

Other specific taxes
No other specific taxes relevant for expatriates in Republic of Macedonia.

Information about Macedonia:

• introduction
• facts and figures
• basis of taxation
• what taxes?
• tax planning opportunities