Social security contributions
The basis for the mandatory social security contributions calculation is the salary and the additional remuneration from employment (including bonuses) as determined in the labour legislation.
The law also sets the minimal base for payment of social security contributions on salary and bonuses, which on a monthly basis is 50% of the average salary paid in North Macedonia.
The highest base for payment of mandatory social security contributions on a monthly basis is 16 average salaries paid in North Macedonia. No social contributions are due on the difference above this threshold.
Calculation and payment of all the employees’ social contributions is regulated under the Law on Mandatory Social Insurance Contributions.
Employers are obligated to calculate, withhold from employees’ gross salary, and pay into the accounts of respective funds the compulsory social contributions and personal income tax (PIT). The current level of the compulsory social contributions on gross salary is as follows:
- Pension and disability insurance: 18.8%.
- Health insurance: 7.5%.
- Employment insurance: 1.2%.
- Additional health insurance: 0.5%.
The Public Revenue Office (PRO) is the authorised body to control the calculation and the payment of compulsory social contributions and PIT on salaries. All employers send their calculations to the PRO that controls them and, if correct, issues a declaration of acceptance that is afterwards presented to the respective depository bank, in order to perform the payment of mandatory social security contributions, PIT, and net salaries.
Value-added tax (VAT)
The standard VAT rate is 18%. This rate applies to overall turnover and imports of goods and services. In addition to the standard VAT of 18%, preferential rates of 5% and 10% are applied for turnover of certain goods and services.
See the Other taxes section in the Corporate tax summary for more information.
Inheritance and gift tax
Inheritance and gift tax is paid on real estate and entitlements to usage of real estate, which the heirs or the receivers of gifts, respectively, inherit/receive on the basis of an inheritance/gift agreement. Tax is also paid for cash, money claims, securities, and other movable property, provided the value of the inheritance/gift is higher than the average annual salary in North Macedonia as determined by the State Statistical Bureau for the previous year. The values of all gifts of the same type, received in the course of one calendar year, are included in one tax base. The municipal administration keeps records on the value of the gifts, on the basis of which, at the end of the year, the tax can be determined for the person receiving the gift, should one receive more gifts of the same type that cumulatively surpass the non-taxable amount in the course of the year.
An inheritance taxpayer is an individual or a legal entity, resident of North Macedonia, who inherits taxable property. A gift taxpayer is also an individual or a legal entity that receives property as a gift in the country or abroad. Additionally, an inheritance and gift taxpayer is a foreign individual and a non-resident legal entity for the real estate and movable property inherited or received as a gift on the territory of North Macedonia.
The inheritance and gift tax base is the market value of the property inherited or received as a gift as at the moment the tax liability arises, decreased by the debts and expenses burdening such property.
Property tax rates are proportional and differ on the basis of the order of succession. They are prescribed within a certain range and depend on the decision of the relevant municipality.
The heir or receiver of the gift in first order of succession is exempt from paying inheritance and gift tax. The taxpayer in the second order of succession is subject to a tax rate between 2% and 3%. As for the taxpayer in third order of succession or a taxpayer who is not related to the testator, 4% to 5% tax rate is levied.