Corporate profit tax (данок на добивка) is the tax a company pays on its profit. In North Macedonia the rate is a flat 10% — one of the lowest in Europe — but the amount you actually pay depends on how the taxable base is calculated, and the tax is collected in monthly advance instalments rather than in one lump sum. This guide explains the base, the rate, the payment rhythm, and how losses are treated, under the Law on Profit Tax.
The rate and who pays it
The profit tax rate is a flat 10%. It is paid by resident companies (DOO, DOOEL, AD and other trade companies) on the profit they earn, and by non-residents on profit attributable to a permanent establishment in the country. Non-profit organisations are, as a rule, not profit-tax payers on their non-commercial activity.
How the taxable base is calculated
The base is not simply your accounting profit. You start from the profit shown in your income statement and then increase it by non-deductible (unrecognised) expenses and any under-reported income. In other words, expenses your business incurred but which the law does not accept for tax purposes are added back, which raises the taxable base above the accounting profit.
Typical examples of expenses that are wholly or partly non-deductible include private expenses run through the company, certain entertainment and representation costs above statutory limits, penalties and fines, and amounts that exceed the caps the law sets for specific categories. Because the add-backs determine your real tax bill, this is the area where an accountant adds the most value.
Monthly advances and the annual return
Profit tax is paid during the year in monthly advance instalments (аконтации), generally based on the previous year's liability. After the year ends, you file an annual profit-tax return together with your annual account, and the difference between the advances you paid and your actual liability is settled — you either pay the shortfall or carry forward/recover the overpayment.
Smaller taxpayers may fall under the alternative tax on total revenue regime; where that applies, the total-revenue tax paid counts as an advance against profit tax.
Losses
If your company records a loss, it can be carried forward and set against future profits, reducing the tax base in later years. The carry-forward is claimed through a request to the Public Revenue Office (UJP), submitted no later than 31 March of the year following the loss year. Keep clean documentation — the loss you carry forward is the tax loss, after the same non-deductible adjustments described above.
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Withholding tax on payments abroad
When a company pays certain income to non-residents — such as dividends, interest, royalties and some service fees — it generally must withhold tax at 10% and pay it on the recipient's behalf, unless a double-tax treaty provides an exemption or a lower rate. The payer reports the withheld tax to the UJP by 15 February of the following year. If you make cross-border payments, check whether a treaty applies before withholding.
