The procedure for direct exemption from VAT on the turnover of goods and services and the imports of goods for the implementation of projects financed with funds obtained by a contract for donation concluded between the Republic of Macedonia and foreign donors, is applied if the contract stipulates that the taxes will not be paid with the obtained funds.

The projects that are financed within the Instrument for Pre-Accession Assistance (IPA) and are implemented under decentralized management, the tax exemption also applies to the portion of funds from the national co-financing provided from the Budget of the Republic of Macedonia from its own resources or from other sources of funding.

In order to use the tax exemption provided with Article 24 of the Law on VAT a implementer of the project is necessary to register the project in the Government of RM – Secretariat for European Affairs. Once the project is registered in the Government of RM - Secretariat for European Affairs, the implementer of the project should get a tax number of the project by submitting an application for registration of the taxpayer - project (Form UJP-RDO) to PRO - Regional Office Skopje. The project – implementer of the project to the subject of the turnover must submit a copy of the Certificate of registration of the project in the Secretariat for European Affairs.

For the changes intended for the implementation of projects funded by foreign donors and IPA funds, the taxpayer is obliged to issue an invoice which contains a serial number assigned by the Public Revenue Office. The taxpayer before issuing an invoice for the use of tax exemption must report the turnover electronically http://etax.ujp.gov.mk to the Public Revenue Office.

Recipient of the turnover shall keep records of invoices received per taxpayer. In the records are entered and the received invoices from a taxpayer who has no headquarters or subsidiary in the country, for turnover that is used for tax exemption.

Recipient of the turnover electronically submits data from the records of invoices received per taxpayer for each calendar quarter to the Public Revenue Office no later than 25th of the month following the end of each calendar quarter.