At the workshop organized by Knigoprima Consulting, participants were introduced in detail with the new regulations related to value added tax.

During 2019, several amendments to the Law on Value Added Tax and amendments to the Decision on Determining Goods and Services subject to the Preferential Rate of Value Added Tax were adopted.

Some of the amendments and additions to the law relate to specifying and amending the tax exemptions in the country without the right to deduct the previous tax.

The legislator has amended Article 30 concerning the preferential tax rate, setting a preferential tax rate of 5% for:

1. Pharmaceuticals for veterinary medicine and
2. Heat energy for heating whereby heat energy means heat supplied by a heat distribution system operated by a thermal energy distribution license holder (the preferential rate of VAT shall apply to all supplies of heat energy for heating, regardless of which entity is carried out).

With reference to the above mentioned, a Decision has also been adopted, which is  amending and completing the Decision on determining the goods and services subject to the preferential rate of value added tax, which is thereby attached to the working materials.

There is an ongoing procedure in the parliament for adoption of amendments and additions to the Law on Value Added Tax. The Law on Amending the Value Added Tax proposes the following:

-possibility of taxpayers registered for value added tax purposes, to exercise the right to deduct previous tax also by owning a fiscal receipt whose total turnover does not exceed 6.000 MKD issued in accordance with the Law on Registration of Cash Payments, that is to say abolishing the confirmation-of-payment-receipt as a document on fiscal receipt for justification of expenses up to the amount of 6.000 MKD.

-Increase of the threshold for the mandatory registration for value added tax purposes from MKD 1,000,000 to MKD 2,000,000 and prescribes shortening of the period of stay of the value added tax system from 5 to 3 years;

-possibility for taxpayers who were registered for value added tax purposes and who did not exceed the threshold of 2.000.000 MKD  in 2019 to have the right to request revocation from the registration for value added tax purposes;

-possibility for taxpayers who were not registered for value added tax purposes and who in 2019 exceeded the threshold of MKD 1,000,000 but did not exceed the threshold of MKD 2,000,000, to have no obligation to register for value added tax purposes;

– exemption from paying of value added tax for goods imported by the military forces of other states that are members of the North Atlantic Treaty Organization (NATO), the imposition of a tax exemption during imports for the needs of those forces or accompanying civilian personnel, as well as for supplying their mess rooms or canteens, if these forces participate in joint defense activities and

– reconciliation of the articles of the Law on Value Added Tax with the Criminal Law.

The Law on Refunding Part of the Value Added Tax to Individuals from the perspective of responsibilities for the issuer of fiscal receipts was also discussed at the workshop.

The issuers of fiscal receipts, in accordance with the articles of the law, are obliged to the Public Revenue Office to report the fiscal receipt of reversal payment and the reversed receipt for which individuals are not entitled to VAT refund.

The Rulebook of the Minister of Finance prescribes the technical characteristics and the way of using the application software for reporting the data of the fiscal receipt and the mobile or desktop application for reporting the fiscal receipt of reversal payment or the reversed receipt.

Regarding the criminal articles, the Law on Refunding Part of the Value Added Tax on Individuals, sets a fine in the amount of 250 to 1,000 euros in MKD counter value for the issuer of the fiscal receipt who will not report the fiscal receipt of reversal payment or the reversed receipt to the Public Revenue Office the and a fine in the amount of 150 to 250 euros in MKD equivalent for the responsible person in the legal entity.

Supervision over the implementation of the articles of this Law is performed by the Public Revenue Office.