Menu
Authentic interpretation of article 25 paragraph (1)item 10) of the law on property taxes (“Official Gazette of the Republic of Macedonia” No. 61/2004, 92/2007, 102/2008, 35/11, 53/11, 84/12, 188/13, 154/15, 192/15 and 23/16)
Article 25 paragraph (1) of the Law on Property Taxes (“Official Gazette of the Republic of Macedonia” No. 61/2004, 92/2007, 102/2008, 35/11, 53/11, 84/12, 188/13, 154/15, 192/15 and 23/16), reads:
“Real estate sales tax shall not be paid:
1) for the sale of real estate in an expropriation procedure;
2) when a foreign diplomatic i.e., consular mission transfers the right to ownership of real estate, in case of reciprocity;
3) when the ownership right is transferred for the purpose of settling liabilities on the basis of public revenues in the procedure of forced collection;
4) for the sale of real estate between state bodies, between state bodies and municipalities and between municipalities;
5) for the sale of real estate in a confiscation procedure;
6) for the sale of socially owned apartments, if the sales contract does not stipulate who has the obligation to pay the tax;
7) when the right to ownership of the real estate is transferred to state bodies for the purpose of collection of claims in bankruptcy and enforcement procedures;
8) when the right to ownership of the real estate is transferred to the provider of lifelong support who in relation to the recipient of the support is in the first line of inheritance, and only for the part of the real estate which they would inherit under the Law on Inheritance without giving the support;
9) for the first sale of residential buildings and apartments carried out within a period of up to five years after the construction for which value added tax has been calculated;
10) when investing real estate in companies’ equity;
11) for trading in securities within the meaning of the Law on Securities; and
12) when the right to ownership of the real estate is transferred to the banks as creditors for the purpose of collection of claims, if they sell the acquired property within three years. ”
The provision of Article 25 paragraph (1) item 10) of the Law on Property Taxes must be interpreted in such a way so that a status change, such as acquisition, merger and division of companies whereby transfer of property (real estate) to the companies’ equity is made, shall be considered investment of real estate in the companies’ equity thus taxpayers shall be exempt from paying real estate sales tax.
regarding the proposed new Law on Personal Income Tax which is to take effect on 01 January 2019, and the existing Law on Personal Income Tax and other amendments to the legal provisions in the Law on the Public Revenue Office, the Law on Prevention of Money Laundering and Terrorist Financing and the Law on Fiscalisation shall cease to apply
The proposed Law on Personal Income Tax regulates the taxation of personal income of natural persons, taxpayers for tax payment, tax basis for tax calculation, tax rates, deadlines for tax payment and other issues important for personal income tax assessment and payment.
The new draft law categorizes income into two basic types of income categories, as follows:
————————————————– ————————————————– ———-
Annual tax base (gross) up to 1,080,000.00 – 10% applicable rate
Annual tax base (gross) from 1,080,001.00 – 18% applicable rate
For individual gross payments of up to 90,000 – 10% applicable rate
From 90,001.00 – applicable rate of 18%
————————————————– ————————————————– ———–
Annual tax base (net) up to 972,000.00 – 11.1111% progressive rate
Annual tax base (net) from 972,001.00 – 21.9512% progressive rate
In individual net payments of up to 81,000.00 – 11.1111% progressive rate
From 81,001.00 – progressive rate of 21.9512%
————————————————– ————————————————– ————
2.1. capital income as follows:
– Dividends
– Interests on loans
– Interests on deposits
– Interests on securities;
2.2. capital gains, as follows:
– Real estate sold within 5 years after acquisition (100% * 15%)
-Real estate sold within a period of 3 years after acquisition if they lived there for 1 year before the sale (90% * 15%
– Real estate sold 5 years after acquisition (not taxed)
– From securities (90% * 15%)
– Share in capital (90% * 15%)
– Other movable property (90% * 15%)
– Intangible Property (100% * 15)
winnings from games of chance, insurance income and other income.
These types of income are taxed at a single applicable rate of 15%.
Flat tax of 15% irrespective of the amount of gross income i.e. flat tax of 17.6471% irrespective of the amount of net income.
– Mandatory pension and disability insurance contribution from 18% to 18.40%
– Mandatory health insurance contribution from 7.30% to 7.40%
Other contributions remain unchanged
Conclusion: salary contributions increase by 0.50%
————————————————————————————————————————
Gross salary of 25,000 in December 2018 NET = 17,178.00
Gross salary of 25,000 in January 2019 NET = 17,113.00
DIFFERENCE = 65.00 monthly
– Exemptions for furnished premises were reduced from 30% to 15% and in May for unfurnished premises from 25% to 10%.
– Income tax rate applied to the net tax base for unfurnished premises is 15.6069% and for furnished premises 14.6132%
—————————————————————————————————————————-
Unfurnished premises:
Gross income = 60,000.00
Recognized costs = 6,000.00
Tax base = 54,000.00
Income tax = 8,100.00
Net amount payment = 51.900.00
FURNISHED premises
Gross income = 60,000.00
Recognized costs = 9,000.00
Tax base = 51,000.00
Income tax = 7,650.00
Net amount for payment = 52,350.00
————————————————– ————————————————– ————
– In catering facilities, a fiscal receipt must be issued with the order;
– The receipt can be canceled within 15 minutes from the moment it is issued at the catering facility;
– Each fiscal receipt must show the payment method (cash, card, invoice, etc.);
– Payment in cash is banned for goods and services of up to 2,000 euro or more in denar currency in the form of one or several clearly related transactions, which has not been effected through a bank, savings house or account with another payment services institution. This ban applies until 31.12.2018. From 01.01.2019 until 30.06.2019 the ban on payment in cash shall be 1,000 euros in denar currency; and after 30.06.2019 it shall be 500.00 euros in denar currency.
The fines for inobservance of these provisions of the Law on Prevention of Money Laundering and Terrorist Financing amount to 30,000 euro for the legal entity and 30% of the legal entity’s fine for the responsible person (9,000 euro).
The Public Revenue Office is obliged to collect data on all individual payments of natural persons through transaction accounts kept at the authorized banks.
Authorized banks shall be obliged to submit information to PRO on the institution authorized to perform payment operations (the bank); information on the natural person – recipient (name, surname and EMBG); information on the ordering party; information on the inflow amount and other inflow data (code and basis for payment, country code and currency if the payment is from abroad) by 28.02.2019.
As of January 2019, the banks shall submit this information to PRO within 15 days of the month for the previous month.
With this novelty, PRO will at all times have information on payments to individuals on all grounds (taxable and non-taxable).
Regarding persons who have income – tax on income from abroad, they are obliged to pay personal income tax within 10 days of the month for the previous month.
Starting 1 June 2019, the provisions of the Law on Prevention of Money Laundering and Terrorist Financing (“Official Gazette of the Republic of Macedonia” No.120/18) entered into force, which established a new threshold for the maximum amount for payments in cash.
Pursuant to Article 182, paragraph 2, in conjunction with Article 48 of the Law on prevention of Money Laundering and Terrorist Financing, the prohibition on payments in cash for goods and services refers to cash payments in the amount of 500 euros or more in denar equivalent in one or more obviously related transactions, which is not performed through a bank, savings bank or through an account in another institution which provides payment services.
The entities which are authorized legally to register securities, other property or legal matters, or to register or perform transfer of money, securities or other property may execute such registration or transfer only if the client submits an evidence that the transfer of the money above the amount of 500 euros or more in denar equivalent is performed through a bank, savings bank or through an account in another institution which provides payment services.
The cash is banknotes and coins which in accordance with the law are in circulation in the Republic of Macedonia or abroad.
How can you make a payment of goods and services above the established threshold of 500 euros in denar equivalent?
By using payment cards, by payment in the bank, through savings bank or through an account in another institution which provides payment services.
Who does not the prohibition refer to?
The prohibition on cash payment in the amount of 500 euros or more does not refer only to the organizers of games of chance.
Who supervises in reference to the implementation of the prohibition on cash payments?
The Bureau for Public Revenues in accordance with its responsibilities supervises the legal entities and the natural persons in relation to the implementation of the prohibition on cash payments in the amount of 500 euros or more in denar equivalent.
Which penal provisions are determined by the Law on Prevention of Money Laundering and Terrorist Financing for infringement of the prohibition on cash payments?
The Law on Prevention of Money Laundering and Terrorist Financing foresees a fine of 30,000 euros in denar equivalent for the legal entity i.e. the sole proprietor who shall act contrary to the prohibition established under Article 182, paragraph 2, in conjunction with Article 48 of the same Law.
For an individual who performs public authorisation or a natural person, a fine of 12,000 to 15,000 euros in denar equivalent is foreseen.
The Assembly of the Republic of North Macedonia, at its session held on __________ 2019 adopted the Law Amending and Supplementing the Law on financial discipline. The Law was published in the Official Gazette No. ____ / 2019 dated ______2019.
The main objective of the legislator in the adoption of the amendments and the supplements is to further comply the Law on the financial discipline with Directive 2011/7/EU on combating late payment in commercial transactions.
Reducing of the amount of compensation for delay in fulfilling the payment liability of the debtor is performed with the amendments and the supplements, from the current 3,000 denars to 2,400 denars. Namely, in the event of non-observance of the agreed time limit or legal deadline for fulfilment of the monetary liabilities arising from the realisation of the business transactions, the creditor is entitled to compensation in the amount of 2,400 denars, without prior warning and reminder to the debtor. By means of this standardisation it is determined that the reminder and admonition are not a condition for realization of the compensation for the delay in fulfilment of the monetary liability.
Furthermore, the Law Amending and Supplementing the Law on financial discipline determines the competence of the Ministry of Economy– the State Market Inspectorate on the implementation of the provisions of this Law by the economic operators from the private sector.
The provisions which refer to the grounds for implementation of supervision by the competent authorities (the Ministry of Finance – the Financial Inspection and the Ministry of Economy – the State Market Inspectorate), and the provisions on the amount of fines which can be imposed in case of misdemeanour proceedings remain the same and range from 1,000 to 10,000 euros.
For the purpose of timely fulfilment of monetary liabilities arising from the realisation of the business transactions, therewith obeying the provisions of the Law on financial discipline and avoiding of high fines, it is necessary, the business entities to record the revenues, the expenditures and the liabilities in business books continuously and timely. The well-timed records are the basis for conducting an analysis on financial performance, providing optimization of the liabilities and their planning.
The right of payment of an annual leave allowance or K-15 is established by the General Collective Agreement for the private sector in the area of the economy and refers to all employees in the private sector in the Republic of North Macedonia.
The employers from the private sector have a legal obligation for payment of an annual leave allowance from 1 July until 31 December.
Who is entitled to an annual leave allowance or K-15?
The employees in the private sector are entitled to an annual leave allowance provided the employee is in continuous employment with the employer for at least six (6) months during the calendar year.
How is the amount of the annual leave allowance calculated?
Pursuant the provisions of the General Collective Agreement for the private sector in the economy, the annual leave allowance is paid in the amount of at least 40% of the base salary.
The base salary for the calculation of the annual leave allowance is the average monthly net salary per employee in the Republic of North Macedonia paid in the last three months.
Can you determine an annual leave allowance to a lesser or greater amount of the amount specified in the General Collective Agreement for the private sector of the economy?
The employers who have had difficulties in the performance, assessing the economic and financial situation of the employer, after obligatory prior consultation with the union of the branch i.e. the department, by means of an agreement signed by the employer and the representative trade union, an annual leave allowance can be determined less than the amount specified in the collective agreement.
A greater amount of the annual leave allowance can be determined by its standardization within the collective agreement of the branch or the collective agreement at the rank of the employer.
Is personal income tax and corporate tax paid for the paid annual leave allowance?
Pursuant to Article 15 paragraph 1 line 2 of the Law on Personal Income Tax (“Official Gazette of the Republic of Macedonia’” No.241/18), the compensations related to work determined by the Law on Labour Relations, the General Collective Agreement for the private sector of the economy, the civil collective agreements, the collective agreement at the rank of the employer and the regulations of the bodies of the state administration, are considered as income from work for which a personal income tax is paid in the amount determined in accordance with the provisions of the law.
Pursuant to Article 9 paragraph 1 item 2, line 6 of the Law on Income Tax (“Official Gazette of the Republic of Macedonia No. 112/14, 129/15, 23/16, 190/16 and 248/18, an annual leave allowance in the amount of the minimum amount of 40% determined by the provisions of the General Collective Agreement of the base salary is not subject to taxation of the income tax. The income tax is paid for each payment in the amount of over 40% of the base salary.
Where can the employees, whose employer had not paid the annual leave allowance within the prescribed deadline, i.e. no later than 31 December during the calendar year, complain?
The employees who shall not be paid the annual leave allowance can require an intervention by the State Labour Inspectorate, or initiate proceedings to protect their rights.
Penalties for infringement of the right of annual leave allowance
The legislator imposes a fine of up to 4,000 euros, of which 2,000 to 3,000 euros for the company and from 500 to 1,000 euros for the responsible person in it.
The legislator imposes a sentence of imprisonment of one year for the employers who shall pay the annual leave allowance and then would require the employees partially or fully to return it.
The State Labour Inspectorate supervises the implementation of the payment of the annual leave allowance, after the received report or voluntarily at random.
The Law on Internship (“Official Gazette of the Republic of Macedonia” No. 98/2015) entered into force on 29.05.2019, and enabled regulation of the legal matter regarding the realization of an internship with an employer.
Both stakeholders, interns and employers, will have benefits from the Law. Interns, i.e. unemployed young people up to 34 years of age, are offered the opportunity to work in real conditions, and thus acquire knowledge, skills and qualifications in order to integrate more successfully into the labor market. On the other hand, employers have the opportunity to hire appropriate staff through on-the-job training, thus filling certain job positions within their company.
But what exactly does the Law on Internship establish?
First, it sets out the manner, conditions and procedure for realization of the internship. It stipulates that internship apply to young unemployed persons up to 34 years of age with completed primary school, as a minimum. It states that the employer announces their need for an intern by announcing a public call that contains the terms of this type of activity.
It determines the maximum period of internship that can be 6 (six) months and the maximum number of interns that the employer can hire, depending on the total number of full-time employees.
The law also stipulates that the employer is obliged to pay a fee for the internship to the intern, in the amount from 42% to 74% of the minimum net salary determined with a law, for internship of up to 3 months. However, if the internship is longer than 3 months, but not more than 6 months, the monthly fee to be paid by the employer of the intern beginning from the fourth month, should be in the amount of the minimum net salary established by law.
It regulates the rights and obligations of interns and employers and sets out the elements that should be contained in the Internship Agreement.
Within the context of the applicable conditions for the interns stipulated in the law, during the internship, the intern does not lose their rights arising from the unemployment and social protection rights established and acquired in accordance with the law.
The Law also stipulates provisions for education, misdemeanor provisions, a provision regulating the fine and a provision regulating the misdemeanor procedure.