Value Added Tax (ДДВ) is charged on most supplies of goods and services. As a business owner your main questions are: do I have to register, what rate do I charge, how often do I file, and can I reclaim the VAT I pay on my own purchases? This guide answers each, based on the Law on Value Added Tax.
When you must register
VAT registration is mandatory once your total turnover in the previous calendar year exceeded MKD 2,000,000, or when you expect to exceed it at the start of your activity. When you cross the threshold during the year, you file the registration application by the 15th of the month following the month in which turnover passed MKD 2,000,000.
You can also register voluntarily below the threshold. This is often worthwhile if you sell mainly to other VAT-registered businesses and buy taxable inputs, because registration lets you reclaim input VAT (see below). Voluntary registrants generally commit to staying registered for a minimum period.
The rates
The standard rate is 18% and applies to most goods and services. Two reduced rates — 10% and 5% — apply to specific categories set by law and government decision (for example basic foodstuffs, water, medicines, books and certain other supplies). Charge the standard 18% unless the supply clearly falls within a reduced-rate category.
Your tax period and filing
How often you file depends on size. If your total turnover in the previous calendar year did not exceed MKD 25,000,000, your tax period is the calendar quarter; above that, the tax period is the calendar month. For each period you submit a VAT return declaring the VAT you charged (output VAT) and pay the tax due.
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Reclaiming input VAT
A registered business does not bear the VAT on its own purchases used for its taxable activity. The VAT you pay on business inputs (input VAT) is deducted from the VAT you charge your customers (output VAT); you pay only the difference to the Public Revenue Office, or claim a refund when input exceeds output. This is the core reason VAT registration can benefit a growing business — but it requires proper VAT invoices and bookkeeping, and adjustments apply to assets (with longer correction periods for real estate) if their use changes.
