Nonresidents are liable to pay taxes only on their income from North Macedonian sources. Personal allowances are not available to nonresidents.

Income Tax

Income is taxed at a flat rate of 10%. The taxable base depends on the type of income, as the rules for deducting expenses vary with the categories.

Taxable income includes:

1. Personal earnings (salaries and bonuses)
2. Income from agricultural activities
3. Income from individual business and professional activities
4. Real estate income
5. Royalties
6. Capital income
7. Income from games of chance
8. Other income

Rental Income Tax

Rental income is taxed at a flat rate of 10%. Income-generating expenses and depreciation costs are deductible when calculating taxable rental income.

A statutory deduction of 25% of gross rent is given to account for income-generating expenses. Alternatively, taxpayers can opt for itemized deduction instead of availing the standard deduction.

Capital Gains

Capital gains from the sale of real estate property are taxed as ordinary income at the 10% rate. Capital gains are calculated as the selling price less acquisition costs and incidental transaction costs.

Exemptions from capital gains tax:

1. Property sold after three years from the date of purchase, provided the taxpayer has lived in it for at least a year prior to the sale.
2. Property sold after five years from the date of purchase.

Corporate Taxation

Corporate income and capital gains are taxed at a flat rate of 10%. Expenses incurred in the generation of income are deductible when calculating the taxable income. Capital gains are calculated as the selling price less acquisition costs and incidental transaction costs. The tax is then levied on 90% of the calculated capital gains.

Property Buying and Selling Taxes/Costs

Property Taxation

Real Estate Tax

Real estate tax is levied on the market value of the property. The rates are determined by the municipalities and range from 0.10% to 0.20%.