Tax Exemptions Due to COVID-19 Crisis
Tax Exemptions Due to COVID-19 Crisis
The outbreak of COVID-19 has heavily affected the economic sector in the Republic of North Macedonia. There are a lot of companies that have decreased economic activity or had to close their business due to the measures aimed at reducing the outbreak of the disease.
In order to help the local businesses, the Government of the Republic of North Macedonia adopted two decrees with legal effect as law, providing tax exemptions primarily for businesses working in most affected sectors, such as tourism, transport and hospitality, applicable to companies and taxpayers which are performing an independent activity.
1. Tourism, transport and hospitality sector
Companies in the sectors of tourism, transport and hospitality are exempted from profit tax advance payments for March, April and May 2020. In order to be eligible for this tax exemption, they shall not:
- reduce the number of employees as at the day of entry into force of this Decree and three months after its expiration (except in cases of death or retirement of the employee or resignation by the employee);
- pay dividends and/or bonuses for the duration of the tax exemption (15 June 2020).
2. Other sectors affected by COVID-19 crisis
Companies from other sectors affected by the COVID-19 crisis will be entitled to tax exemption if they fulfil one of the following requirements, added to the abovementioned requirements:
- the taxpayer’s total revenue is reduced by at least 40% in the current month compared to February 2020, or the reduction in total revenue for 2020 is at least 40% compared to the same period in 2019; or
- the number of employees who do not work or do not contribute to the economic activity of the taxpayer is at least 25% of the total number of employees compared to February 2020; or
- the taxpayer has closed at least 50% of the points of sale through which it performs its business activity.
The companies should submit their requests for this tax exemption to the Public Revenue Office, through the system for e-taxes, subject to confirmation by the Public Revenue Office within 15 days as of the date of submitting the request.
3. Taxpayers performing an independent activity in tourism, transport and hospitality
Taxpayers performing an independent activity in the sectors of tourism, transport and hospitality are exempted from payment of the personal income tax advance payments for March, April and May 2020. In order to be eligible for this tax exemption, these taxpayers should not:
- decrease the number of employees calculated from the day of entry into effect of the Decree until three months after the expiration of the validity of the Decree (except in cases of death/retirement of the employee or resignation by the employee).
4. Other taxpayers affected by COVID-19 crisis
Other taxpayers which are also affected by the COVID-19 crisis shall be entitled to this tax exemption if they fulfil one of the following requirements, added to the requirements stated above:
- the taxpayer’s total revenue is reduced by at least 40% in the current month compared to February 2020; or
- its total revenue for 2020 is reduced for at least 40% compared to the same period in 2019; or
- the number of employees who do not work or do not contribute to the economic activity of the taxpayer is at least 25% of the total number of employees compared to February 2020; or
- the taxpayer has closed at least 50% of the points of sale.
The taxpayers should submit their requests for this tax exemption to the Public Revenue Office, through the system for e-personal income tax, subject to confirmation by the Public Revenue Office within 15 days as of the date of submitting the request.
The outbreak of COVID-19 has heavily affected the economic sector in the Republic of North Macedonia. There are a lot of companies that have decreased economic activity or had to close their business due to the measures aimed at reducing the outbreak of the disease.
In order to help the local businesses, the Government of the Republic of North Macedonia adopted two decrees with legal effect as law, providing tax exemptions primarily for businesses working in most affected sectors, such as tourism, transport and hospitality, applicable to companies and taxpayers which are performing an independent activity.
1. Tourism, transport and hospitality sector
Companies in the sectors of tourism, transport and hospitality are exempted from profit tax advance payments for March, April and May 2020. In order to be eligible for this tax exemption, they shall not:
- reduce the number of employees as at the day of entry into force of this Decree and three months after its expiration (except in cases of death or retirement of the employee or resignation by the employee);
- pay dividends and/or bonuses for the duration of the tax exemption (15 June 2020).
2. Other sectors affected by COVID-19 crisis
Companies from other sectors affected by the COVID-19 crisis will be entitled to tax exemption if they fulfil one of the following requirements, added to the abovementioned requirements:
- the taxpayer’s total revenue is reduced by at least 40% in the current month compared to February 2020, or the reduction in total revenue for 2020 is at least 40% compared to the same period in 2019; or
- the number of employees who do not work or do not contribute to the economic activity of the taxpayer is at least 25% of the total number of employees compared to February 2020; or
- the taxpayer has closed at least 50% of the points of sale through which it performs its business activity.
The companies should submit their requests for this tax exemption to the Public Revenue Office, through the system for e-taxes, subject to confirmation by the Public Revenue Office within 15 days as of the date of submitting the request.
3. Taxpayers performing an independent activity in tourism, transport and hospitality
Taxpayers performing an independent activity in the sectors of tourism, transport and hospitality are exempted from payment of the personal income tax advance payments for March, April and May 2020. In order to be eligible for this tax exemption, these taxpayers should not:
- decrease the number of employees calculated from the day of entry into effect of the Decree until three months after the expiration of the validity of the Decree (except in cases of death/retirement of the employee or resignation by the employee).
4. Other taxpayers affected by COVID-19 crisis
Other taxpayers which are also affected by the COVID-19 crisis shall be entitled to this tax exemption if they fulfil one of the following requirements, added to the requirements stated above:
- the taxpayer’s total revenue is reduced by at least 40% in the current month compared to February 2020; or
- its total revenue for 2020 is reduced for at least 40% compared to the same period in 2019; or
- the number of employees who do not work or do not contribute to the economic activity of the taxpayer is at least 25% of the total number of employees compared to February 2020; or
- the taxpayer has closed at least 50% of the points of sale.
The taxpayers should submit their requests for this tax exemption to the Public Revenue Office, through the system for e-personal income tax, subject to confirmation by the Public Revenue Office within 15 days as of the date of submitting the request.
