Regulation by force of law for implementation of the Law on Corporate Tax during a State of Emergency

In the ‘Official Gazette of the Republic of North Macedonia’ no. 79/2020 from 26.03.2020  was published the Regulation by force of law for the implementation of the Law on Corporate Tax during a State of Emergency.

With this Regulation a measure of support for the companies who suffered damage in their work activities due to the spread of coronavirus COVID-19 is adopted, and they will be exempt from payment of the corporate tax for the months of March, April and May 2020.

All taxpayers who perform the following activities are eligible for exemption from payment of corporate tax:

  • Hospitality (code 56 - food preparation and serving activities);
  • Tourism (code 79 – Travel Agencies (tour operators) and other reservation services, as well as other related activities, code 55 – Accommodation facilities);
  • Transport (code 49 – Land transport and pipeline transport, code 50 – Water transport and code 51 – Air transport).

The conditions for using this measure are the following:

  • The company should not pay dividends, profit sharing compensations (participation in profits, bonuses) or other types of annual reward to employees, taxpayer’s management and supervision bodies, counting from the date of entry into force of this Regulation until the day of exemption (June 15th, 2020);
  • The taxpayer-employer shall not reduce the number of employees, counting from the date of entry into force of this Regulation, three months after the termination of its validity, except in cases of death, retirement or resignation of the employees.

The right of exemption from payment of the corporate tax also applies to other taxpayers who have suffered damages in their work activities, which in addition to the above-mentioned conditions must meet one of the following conditions:

  • The taxpayer's total revenue would be reduced by at least 40% in the current month compared to February 2020, or the reduction of the total revenue for 2020 shall be more than 40% over the same period the previous year, or
  • The number of employees who do not work or do not contribute to the economic activity of the taxpayer-employer due to implementation of the measures is at least 25% of the total number of employees compared to February 2020, or
  • The taxpayer would close at least 50% of the points of sale through which it performs the turnover (subsidiaries, sales facilities).

Action required

Regarding the right of exemption from payment of the corporate tax, the taxpayers should submit an application for exemption from payment of corporate tax to the Public Revenue Office. The application should be submitted through the system http://etax.ujp.gov.mk, and the complete request will be confirmed by the Public Revenue Office, within 15 days from the day of submission of the request.

The taxpayers who exercised the right for exemption from payment of corporate tax, but do not fulfill the conditions, has an obligation for payment of corporate tax and interest which are not paid according to the Regulation by force of law for the implementation of the Law on Corporate Tax during a State of Emergency.

This Regulation shall enter into force on the day of its publication in the Official Gazette of the Republic of North Macedonia.

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