This issue of KPMG's Tax News presents the latest amendments to the tax legislation in a number of areas.
Authentic interpretation in relation to withholding tax
The Parliament of North Macedonia has issued an authentic interpretation of the article from the Corporate Income Tax Law (CIT Law) which provides for the income subject to withholding tax (WHT).
Pursuant to the provisions of Article 21, paragraph 1, item 4 of the CIT Law, royalties paid by a resident, regardless of whether paid in the country or abroad, are subject to WHT. Based on the authentic interpretation published in the Official Gazette No. 158 of 1 August 2019, royalties paid by a resident which are subject to WHT will not be considered to include income derived from the use of “other related rights” (as defined by the Law on Copyright and Other Related Rights), which include the broadcasting organizations purchasing foreign program under a license agreement.
Law on Value Added Tax
The amendments to the Law on Value Added Tax (VAT Law) were promulgated in the Official Gazette No. 124 dated 18 June 2019 and entered into force on 26 June 2019.
The new provisions set out the following:
Law on Refund of Part of the VAT to Individuals
The Law on Refund of Part of the VAT to Individuals was published in the Official Gazette No. 133 dated 28 June 2019 and applies as of 1 July 2019.
This Law regulates the right of individuals to a 15% refund of VAT stated in fiscal receipts issued in accordance with the Law on Registering Cash Payments and introduces obligations for the issuer of the fiscal receipts to report all fiscal receipts that have been cancelled and all receipts for the cancelled transactions to the Public Revenue Office.
Law on Financial Discipline
The amendments to the Law on Financial Discipline (LFD) were promulgated in the Official Gazette No. 124 dated 18 June 2019, entered into force on 26 June 2019 and will start to apply within 60 days from their entry into force, i.e. 25 August 2019.
The amendments include:
Law on Customs Tariff
The amendments to the Law on Customs Tariff were published in the Official Gazette No. 124 dated 18 June and entered into force on the same day.
They are harmonized with Council Regulation (EEC) No. 2658/87 on the tariff and statistical nomenclature and on the Common Customs Tariff.
The amendments provide for the possibility of the Government of the Republic of North Macedonia to change the ninth and the tenth digits of the tariff symbols of the Customs Tariff due to the application of certain measures that apply on import into and export from the Republic of North Macedonia.
Law on Excise Duty
The new Law on Excise Duty (LED) published in the Official Gazette No. 143 dated 12 July 2019 will start to apply as of 1 November 2019 instead of 15 July 2019 as previously stipulated.
Other developments in the tax legislation
The following were promulgated in the Official Gazette No. 126 dated 21 June 2019:
We would be glad to discuss how the changes could impact your business.