The standard VAT rate is 18% and is levied on the sale of goods (including shortages of goods that did not occur as a result of extraordinary events such as theft, fire and other natural disasters) and services, including imports. Reduced VAT rate of 5% and 10% apply on certain supplies whilst certain other supplies are either exempt from VAT or zero rated.

Reduced Rate of 5% Supplies Include:

Basic food products for human consumption;
Fodder, additives, and livestock;
Baby products and school accessories;
Agricultural equipment and mechanization, seeds, planting materials, fertilizers;
Drinking water provided from public systems;
Publications subject to certain exceptions;
Pharmaceutical and medical devices;
Computers;
Solar heating systems and their components;
Transportation of passengers;
Communal and waste disposal services;
Publications, including books, electronic/digital textbooks, brochures and similar printed materials, newspapers and other periodicals, children's picture books, etc., excluding publications that serve mainly advertising purposes, as well as publications with pornographic content (effective 1 September 2023);
Menstrual products (effective 1 September 2023);
Pellets, pellet stoves, and pellet boilers, and thermal energy for heating (effective 1 September 2023); and
Hotel accommodation services.

Reduced Rate of 10% Supplies Include:

Restaurant services, specifically serving food and beverages for onsite consumption, except alcoholic beverages; and
Luxury food products (effective 1 September 2023).

Exempt Supplies Include:

Supply and renting of buildings, apartments used for dwelling purposes subject to certain exceptions;
Health care;
Supplies of human organs, blood, and milk;
Insurance and re-insurance services;
Banking and financial services with certain exemptions;
Welfare and social security services;
Education (including schools and universities education services), sports and physical education;
Games of chance and entertainment games;
Public postal services and sale of postage stamps;
Road tolls;
International transport of passengers (except for air transport); and
Services of scientific and research activity (including universities providing education/ training).

Zero-rated Supplies Include:

Export of goods;
Goods supplied in free trade zones;
Supply, modification, repair, maintenance, chartering, and hiring of aircraft used by companies involved in international commercial transport; and
International air transport of passengers, subject to certain conditions.

Registration Threshold

The minimum threshold for VAT registration is taxable transactions of MKD 2 million (MKD 1 million until 31 December 2019) or more in a calendar year. VAT registration is required if the threshold was exceeded in the previous year or is expected to be exceeded at the beginning of the current year or is reached during the year. Once registered, the registration is required to be retained for a minimum period of three years irrespective of the turnover unless approval is obtained from the competent authority for a reduced period.

Returns and Payments

Taxpayers are required to submit VAT returns on a monthly basis within 25 days of the following month. However, VAT returns may be submitted on a quarterly basis if the taxable turnover is less than MKD 25 million within 25 days of the month following the quarter.

The VAT payment is due within a period of five days from the deadline of the submission of the VAT return, i.e. within 30 days of the month following the reporting period.

COVID-19 Emergency Measures

In response to the COVID-19 pandemic, the Macedonian government adopted the following measures:

Deferment of the VAT payment (without interest) up to seven days following the submission of the VAT return;
VAT exemption on donation of goods and services, subject to certain conditions; and
A reduction in the VAT rate from 18% to 5% on services and products of craftsmen.

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