Macedonia: Taxes and Costs

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Income taxes in Macedonia are moderate

Effective Tax Rate on Rental Income
Monthly Income	€1,500	€6,000	€12,000
Tax Rate	9.2%	9.2%	9.2%
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INDIVIDUAL TAXATION

Non-residents are liable to pay taxes only for their income from Macedonian sources. Personal allowances are not available to non-residents.

INCOME TAX

Income is taxed at a flat rate of 12%. The taxable base depends on which kind of income is being taxed, as the rules for deducting expenses vary with the categories. The rate will go down to 10% for 2008 and the succeeding years.

Rental Income

Rental income is taxed at a flat rate and the applicable rate depends on the category of the rental property. Unstudied business space is taxed at 8.11% and accommodated business space is taxed at 7.52%. Taxable income is gross rental income.

Capital Gains

Capital gains realized from the sale of real estate property are taxed as ordinary income at 12%. The capital gain is computed as the selling price, less acquisition costs, maintenance costs and depreciation. The tax is then levied on only 70% of the computed capital gain. Capital gains from the sale of real estate property held for more than 3 years are exempt from taxation.

PROPERTY TAXATION

Real Estate Tax

The owner of the property is generally liable to pay the tax, but in the case of a rental agreement, the tenant is the one liable. The rates are determined by the municipalities and range from 0.1% to 0.2%. A 50% tax reduction is available for taxpayers living in a residential building, or flat with family.

CORPORATE TAXATION

INCOME TAX

Corporate income is taxed at a flat rate of 12%. Expenses incurred in the generation of income are deductible. This rate will go down to 10% in 2008 and later years.

Capital Gains

Corporate capital gains are taxed as ordinary income at 12%. Capital gains are generally computed as selling price less acquisition costs, maintenance costs and depreciation. The tax is levied on only 70% of the computed capital gain.

Macedonia - more data and information

• Guide to buying houses and registering property sales in Macedonia

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