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Personal income

Definition

Personal income are all incomes that the taxpayer will realize on the basis of employment, including the income on contract for temporary or periodically performing services of the state administration bodies, of the domestic and foreign legal entities, as well of the domestic and foreign natural persons who perform independent activity, and which are paid in cash, coupons, money receipts, shares, goods or some other type that has money value.

Types of personal income

Salaries and salary allowances from employment and payment on the basis of business success of the employer;
Expenditure allowances from employment, paid over the amounts of the Article 6 from the Law on Personal Income Tax and all other expenditure allowances related to work determined by the Law on Labor Relations, the General Collective Agreement for the private sector in the field of economy, the Branch Collective Agreements and the Regulations for the State Administration Bodies;

  • Pensions;
  • Incomes of the members of the management bodies and supervision bodies of the trade associations;
  • Income of the professional sportsmen (premiums, transfers etc.);
  • Allowance for top sportsmen;
  • Sick allowance;
  • Allowance for absence of work;
  • Allowance for work of the judges jurymen, skilful persons and bankruptcy managers, who do not have attribute of employed persons in the appropriate institutions or associations;
  • Allowance of the MASA members;
  • Salary realized abroad on the basis of employment founded in the country and;
  • Each separately realized income on the basis of contract for temporary or periodically performing services of legal entities and natural persons.

As personal incomes also are considered other incomes, which instead of in cash are provided in coupons, money receipts, shares, goods or some other type which has money value.

Tax base

  • Income on the basis of the realized salary and the salary allowance from employment and payment on the basis of employer business success, reduced for the contributions and personal tax exemption for the month for which the salary is paid.
  • The amount of the expenditure allowances from employment paid over the amounts of the Article 6 from the Law on PIT and all other expenditure allowances related to work determined by the Law on Labor Relations, the General Collective Agreement for the private sector in the field of economy, the Branch Collective Agreements and the Regulations for the State Administration Bodies.
  • Income on the basis of pension – the realized pension reduced for the contributions and personal tax exemption. The calculated Income Tax on the basis of pensions and invalid is transfered to the Pension and Disability Insurance Fund.
  • Incomes of the members of the management bodies and supervision bodies of the trade associations – amount of the income, the allowance.
  • Incomes of the high officials, members of the parliament, advisors and other carriers of the public functions – amount of the income, the allowance.
  • Income of professional sportsmen – amount of the income, the allowance.
  • Allowance for the work of the judges jurymen, skilful persons and bankruptcy managers, who do not have attribute of employed persons in the appropriate institutions or associations – amount of the income, the allowance.
  • Allowance of the members of the MASA – amount of the income, the allowance.
  • Income on the basis of contract for temporary or periodically performing services of the legal entities and natural persons – amount of the income, the allowance.
  • The realized salary and the salary allowance from employment and payment on the basis of business success of the employer for foreign natural person – non resident who realize income from work at resident of the Republic of Macedonia, reduced for the contributions and the personal tax exemption for the month for which salary is paid.
  • The amount of the expenditures from employment paid over the amounts of the Article 6 from the Law on PIT and all other expenditure allowances related to work of the foreign natural person – non-resident from employment at resident of the Republic of Macedonia determined by the Law on Labor Relations, the General Collective Agreement for the private sector in the field of economy, the Branch Collective Agreements and the Regulations for the State Administration Bodies.
  • The realized salary and the salary allowance from employment and payment on the basis of the business success of the employer realized by the resident of the Republic of Macedonia who work in foreign diplomatic and consular representations and international organizations in the Republic of Macedonia, reduced for contributions and personal tax exemption for the month for which the salary is paid.
  • The amounts of expenditure allowances from employment paid over the amounts of the Article 6 from the Law on PIT and all other expenditure allowances related to work determined by the Law on Labor Relations, the General Collective Agreement for the private sector in the field of economy and the Regulations for the State Administration Bodies, paid to a resident who works in foreign diplomatic and consular representations and international organizations in the Republic of Macedonia.
  • Incomes which instead of in cash are paid in coupons, money receipts and securities their nominal value.
  • Income which instead of in cash are paid in goods – the price that would be reached by sale of the goods.

Tax rate

  • As of 01.01.2008 – the tax rate is 10%

Allowances of employment which are not subject to taxation with the Personal Income Tax

  • Expenditure allowances for official travel, per diem travel allowance (accommodation and food) or separated life from the family of the employed persons, in the amount of the lowest amount determined by the General Collective Agreement for the private sector in the field of economy i.e. for the employees in non economy in amount determined by the Regulations for the State Administration Bodies.
  • Allowance in case of employee’s death and death of family member, up to the prescribed amount.
  • Leave payment which is given when retiring, in the amount of two monthly average net salaries per employee, paid off in the Republic of Macedonia in the last three months.
  • Expenditure allowances for using own car for the employer’s needs in amount of 30% of the price per liter fuel which the car uses for each passed kilometer, up to 3500 MKD per month.
  • Aid for undergo damages from natural disasters up to the lowest amount determined by the General Collective Agreement for the private sector in the field of economy i.e. for the employees in the non economy sector in the amount determined by the Regulations for the State Administration Bodies.

Electronic calculation for advance payment of Personal Income Tax (e-PPD)

1. The payer of the income who keeps business records calculates the advance payment of Personal Income Tax for personal incomes.
The payer of the income calculates the advance payment of the Personal Income Tax that is paid by deduction before the payment of the income for each natural person to whom the income is paid, applying the rates prescribed by the Law on Personal Income Tax.

  • The taxpayer when making payment of salary, part of a salary, salary allowance and payment on the basis of business success is obliged to make the calculation monthly, separately for every taxpayer for payment for the appropriate month and the data of the calculated salary or part of the salary, salary allowance and payment on the basis of the business success and to submit to the Public Revenue Office till 10th of the month at the latest for the previous month, electronically on a form MPIN.
  • The payer of income for compensation of labor costs paid over the amounts foreseen by law and all other benefits related to labor costs, the remuneration of members of the management bodies and supervision bodies of the trade companies; the remuneration of officials, members of the parliaments, advisers, and other holders of public office; income of professional athletes - premiums, transfers, etc .; compensation for the work of judges jurymen, skilful persons and bankruptcy managers, who do not have the status of employed persons in the respective institutions or companies; compensation for the members of the Macedonian Academy of Sciences and Arts; each individually generated income on the basis of a contract for temporary or temporary provision of services to legal entities and individuals, prepares an Electronic Calculation for income an tax (e-PPD) with data for each natural person to whom the income is paid, which it submits electronically to the Public Revenue Office through the system e-pdd.ujp.gov.mk.
    The calculation is approved by the Public Revenue Office before the payment of the tax and the payment of the net income at the payment operations carrier is made.
    The payer is obliged to issue to the taxpayer a copy of the calculation for the tax advance payment for each payment.

2. Natural person (resident of Republic of Macedonia)

  • The recipient of income in the country calculates the advance payment of Personal Income Tax for personal income from diplomatic or consular representation of foreign countries, for representatives and officials of such representations that have diplomatic immunity; and for which the taxpayer himself makes the assessment and payment of the tax and for the income derived from the occasional provision of services to natural persons.
    The income recipient in the country calculates the advance payment of the personal income tax for each realized income, applying the rates prescribed by the Law on Personal Income Tax
  • The recipient of income from abroad calculates the advance payment of Personal Income Tax on the basis of contractual agreement, compensation of a member of a management body and supervision bodies in trade companies and all the above types of personal incomes.
    The recipient of the income from abroad shall calculate the advance payment of Personal Income Tax for each realized income, applying the rates prescribed by the Law on Personal Income Tax or by applying the Agreements for Avoidance of Double Taxation (if the Republic of Macedonia has concluded an Agreement with the country where the income was generated).

The income recipient in the country and abroad prepares an electronic calculation of income and tax (e-PPD) for each generated income, which is submitted electronically to the Public Revenue Office via the system e-pdd.ujp.gov.mk, no later than the 10- in the month for the income generated in the previous month.
The calculation of the advance payment of the income tax is approved by the Public Revenue Office.

Annual obligation of the natural person

The Public Revenue Office prepares a pre-populated Annual Tax Return for all citizens - individuals who have realized incomes (personal incomes) during 2018.
The pre-populated Annual Tax Return (PIT-GDP) is submitted by the Public Revenue Office to the citizens no later than 30 April 2019 through the system e-pdd.ujp.gov.mk
Each natural person is obliged to confirm the accuracy of the data from the pre-populated Annual Tax Return or to correct the return no later than May 31, 2019
If the citizen does not confirm or correct the pre-populated Annual Tax Return no later than 31 May 2019, the pre-populated PIT-GDP issued by the PRO will be considered as confirmed.

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© Public Revenue Office, Republic of North Macedonia