Western Balkans Competitiveness Outlook 2024: North Macedonia

5. Tax policy

Abstract

A well-planned tax policy provides the necessary incentives to promote economic growth. This chapter, along with two sub-dimensions, explores the effectiveness of tax policy and tax administration. The first sub‑dimension, tax policy framework, assesses the soundness and efficaciousness of the legal framework, the tax system, and the incentives for investment in promoting steady economic growth. The second sub‑dimension, tax administration, focuses on the efficiency and transparency of the tax administration organisation while also reflecting upon the tax filing and payment procedures and taxpayer services.

Key findings

North Macedonia’s overall score increased slightly since the previous CO, remaining above the regional average (Table 5.1). The relatively low tax policy framework score is driven by the economy’s weak performance in terms of personal income tax and social security contributions (PIT & SSC) analysis. In all other areas of tax policy, however, North Macedonia’s score remained either unchanged or increased. Performance in the tax administration score increased due to continued improvements in accessibility and ease of filing procedures and taxpayer services.

Table 5.1. North Macedonia’s scores for tax policy

Dimension	Sub-dimension	2018 score	2021 score	2024 score	2024 WB6 average
Tax	4.1: Tax policy framework			2.7	2.5
	4.2: Tax administration			4.0	3.8
North Macedonia’s overall score		2.4	3.3	3.4	3.1

The key findings are:

• Systematic analysis of the interaction between the PIT and SSC systems and structural trends is conducted. The Ministry of Finance and the Ministry of Labour and Social Policy jointly monitor demographic changes to assess potential policy changes to PIT and SSC rates. Regular analysis of these trends in the economy’s tax system is essential, particularly given its rapidly ageing population.

• North Macedonia uses tax policies to further its work to incentivise work in the formal sector. Although only employees are responsible for paying social security contributions, the low personal income tax rate lessens the tax burden levied on labour. Moreover, the government has implemented a series of measures designed to increase the number of workers in the labour market.

• The government has started the process of considering the impact of the EU Carbon Border Adjustment Mechanism (EU CBAM). There is an ongoing process regarding how businesses in the industries subject to the CBAM will be impacted.

• Filing and payment processes in North Macedonia are relatively simple. E-filing is available for all types of taxes, and while it is only mandatory for value added tax (VAT), its use is nearly universal for both PIT and corporate income tax (CIT) returns. Taxpayers are further assisted by the provision of free software for tax compliance.

• The economy remains an active participant in the international taxation framework. It participates in and tracks the developments of the Inclusive Framework on Base Erosion and Profit Shifting (BEPS). Moreover, it has signed the Convention on Mutual Administrative Assistance in Tax Matters and implemented transfer-pricing rules in line with OECD guidelines.

• North Macedonia is the only economy in the region that has plans to review the effect of reforming its domestic tax system in response to the international implementation of the Global Anti-Base Erosion (GloBE) Rules. Moreover, it will evaluate the potential impacts of introducing a qualifying domestic minimum top-up tax (QDMTT). Such assessments are especially important for North Macedonia, which offers low CIT rates and generous tax incentives – both of which may be impacted by the GloBE Rules.

State of play and key developments

Sub-dimension 4.1: Tax policy framework

Tax revenues as a share of GDP in North Macedonia are relatively low, measuring below the regional and OECD average (Table 5.2). North Macedonia’s tax-to-GDP ratio in 2021 was 27.7%, compared to the WB6 average of 30.4% and the OECD average of 33.6%. Conversely, North Macedonia’s tax mix is comparatively more balanced. Corporate income tax revenues account for 2.0% of GDP, close to the WB6 average of 2.1% and below the OECD average of 2.8%. However, CIT makes up a greater share of total tax revenue in North Macedonia (7.2%) compared to the WB6 average (6.9%), but is below the OECD average (9.0%). Personal income tax revenues account for 3.0% of GDP, higher than the WB6 average of 1.9% but considerably lower than the OECD average of 8.3%. This is also reflected in the tax structure of North Macedonia, where the PIT raises 10.8% of total tax revenues, which is almost twice the proportion of the WB6 average (6.4%) and slightly less than half of the OECD average (24.1%).

Table 5.2. North Macedonia’s tax revenues as a share of GDP (2022)

	CIT	PIT	SSCs	Goods and services	Total tax/GDP ratio
North Macedonia	2.0%	3.0%	9.8%	11.2%	27.7%
WB6	2.1%	1.9%	9.9%	14.9%	30.4%
OECD	2.8%	8.3%	9.2%	10.6%	33.6%

Note: Information on North Macedonia is from 2022 and information from the OECD is from 2020.

Sources: Data for North Macedonia come from the Ministry of Finance, the Department of Public Revenues, Tax and Customs Policy and the State Statistical Office. Data on the OECD are from the OECD (2022[1]).

Relative to other WB6 economies, North Macedonia is less dependent on indirect tax revenues. The SSCs in North Macedonia contribute to 9.8% of GDP, which is aligned with the WB6 average of 9.9% and the OECD area average of 9.2%. When examined as a share of total tax revenue, SSCs in North Macedonia account for 35.3%, which is greater than the WB6 average (31.7%) and the OECD average (26.6%). Tax revenues from goods and services, which constitute 11.2% of GDP, fall short compared to the WB6 average of 14.5% of GDP, but slightly exceed the OECD area average of 10.6% of GDP. Nevertheless, the contribution of these taxes to the total tax revenue in North Macedonia (30.3%) is significantly lower than the WB6 average (48.8%) and close to the OECD area average (32.1%).

The CIT rate in North Macedonia is 10%, which is on the lower end of WB6 economies and significantly below most OECD countries. In terms of investment income, capital gains realised by corporations are incorporated into the CIT base. Corporate dividend income received by companies registered in North Macedonia is exempt from CIT, while dividends directed to non-resident entities attract a 10% withholding tax, a measure that also applies to corporate interest payments (to both resident and non-resident entities). As in other WB6 economies, but unlike many EU and OECD countries, North Macedonia has a worldwide CIT system. Under this system, resident companies are taxed on both their domestic and foreign-sourced income, whereas non-resident entities are only taxed on income generated within North Macedonia. While worldwide CIT systems are in place in all WB6 economies, they are not common among small open economies.

North Macedonia offers an array of investment tax incentives, including both cost- and profit-based tax incentives. Reinvested profits can be deducted from taxable corporate profits, which also applies to investments in research and development. Additionally, North Macedonia has Special Economic Zones (SEZ). Businesses operating within these zones enjoy several tax advantages, including a CIT exemption for up to ten years. Moreover, companies that are found to be investing productively within these zones can benefit from PIT exemptions for the employees as well. The tax incentives in the SEZ can last up to ten years or potentially conclude earlier if the combined regional incentives exceed 50% for investments of up to EUR 50 000 000. Although these incentives were amended in light of the 2022 OECD Forum on Harmful Tax Practices (FHTP), the effectiveness and efficiency of such tax incentives could be significantly impacted by the Global Anti-Base Erosion (GloBE) rules.

Furthermore, North Macedonia operates a presumptive (or simplified) tax regime for small businesses based on annual turnover. Companies with annual turnover under MKD 3 000 000 (EUR 48 700) are exempted from CIT and companies with income between MKD 3 000 000 and MKD 6 000 000 (EUR 97 400) may opt for a simplified tax regime with a 1% rate levied on their turnover, instead of the 10% CIT rate levied on profits. The 1% rate levied on turnover is low in international comparison and will result in a low effective tax rate, particularly for highly profitable businesses. When they are well designed, simplified tax regimes can reduce compliance costs for micro-businesses and vulnerable self‑employed workers, lowering the barriers to entry into the formal sector (Mas-Montserrat et al., 2023[2]).

North Macedonia will review the impact of reforming its domestic tax system in response to the international implementation of the GloBE Rules and the qualifying domestic minimum top-up taxes (QDMTTs) in order to determine the need for reform. While countries are not required to adopt the GloBE Rules, jurisdictions that adopt them will apply an effective tax rate test using a common tax base and a common definition of covered taxes to determine whether a multinational enterprise (MNE) is subject to an effective tax rate of at least the agreed minimum rate of 15% in any jurisdiction where it operates (OECD, 2022[3]). For North Macedonia that means that in-scope Ultimate Parent Entities of MNE Groups – that have their headquarters in a jurisdiction that has implemented the GloBE Rules and that operate a subsidiary (or Constituent Entity) in North Macedonia – may be subject to a top-up tax in the residence jurisdiction, if the profits earned in the subsidiary located in North Macedonia are taxed at an effective rate below 15%.

Given that North Macedonia’s statutory CIT rate is below the global minimum effective tax rate and because reinvested profits are tax deductible, the GloBE Rules are indeed likely to have implications for the subsidiaries of MNEs that are in-scope of the Rules and operate within its jurisdiction. MNE groups are considered to be in-scope if their annual revenue is EUR 750 million or more (OECD, 2021[4]). North Macedonia will, therefore, assess the impact of introducing a QDMTT, which would increase the effective tax rate of relevant subsidiaries to 15% and, consequently, not forgo CIT revenues in the short run.

Although North Macedonia has continually expanded its international co-operation in tax matters, namely through its active participation in the Inclusive Framework on Base Erosion and Profit Shifting (BEPS), there is still room for improvement in its exchange of tax information. The economy has not yet implemented the OECD Automatic Exchange of Information (AEOI) standards, although it intends to do so by mid-2025. Strengthening its capacity in this area will also help North Macedonia more effectively tax capital income from its top earners (OECD, 2017[5]). Moreover, North Macedonia has yet to implement the Country-by-Country (CbC) Reporting Package. However, the government plans to adopt a draft law adopting this package in 2024.

Income at the individual level is taxed at a flat 10% PIT rate with an annual allowance of MKD 108 456 (EUR 1760). The tax base includes income from labour, pensions, and capital income including capital gains, dividends, and interest payments. Only employees pay SSCs at a total rate of 28% of the gross salary, and the amount contributed is then deducted from the PIT base. This includes 18.8% for pension and disability, 8% for health insurance, and 1.2% for unemployment insurance. The same rates apply to the self-employed, who are also subject to the PIT.

North Macedonia significantly increases formal employment and reduces disincentives to work in the formal sector. Importantly, North Macedonia has implemented tax measures to encourage workers to enter the labour market, including exempting employers from withholding PIT payments for up to three years of newly hired employees previously registered as unemployed. Every year, the government releases an Operational Plan for active programmes and measures, designed to increase the number of people in the labour market and the formal sector. Among those programmes are targeted PIT subsidies for new hires, newly created jobs, and previously unemployed workers that fulfil a set of conditions.

Although the population in North Macedonia is relatively young, decreasing fertility rates and high levels of emigration will lead to population ageing in the medium and long term (WHO, 2021[6]). In 2021, a national census showed that the total population had declined by almost 10% compared to 20 years ago, with 150 000 fewer young people. Moreover, between 2012 and 2022, the share of the population aged 65 years or over in the economy increased by 5.3 percentage points – higher than in any EU Member State (Eurostat, 2023[7]). The impact of these demographic changes on the economy’s tax revenue and the functioning of its SSC system was assessed as part of the government’s Strategy on Demographic Policies 2015-24. The ever-changing landscape of demographic shifts, however, necessitates regular analysis of these issues and their fiscal impact.

Additionally, North Macedonia has an aggregate tax revenue forecasting model and micro-simulation models for PIT and CIT revenues, which were developed with the assistance of the International Monetary Fund (IMF). The former is regularly assessed to ensure its reliability, while the latter models are only adjusted when deemed necessary (although the PIT model is expected to be adjusted shortly).

With respect to the design and structure of the value added tax (VAT) system, the standard VAT rate in North Macedonia is 18%, which is similar to the OECD area average of 19.2%. North Macedonia has a VAT registration threshold of MKD 2 000 000 (EUR 32 000) and two reduced rates of 10% and 5% which apply to restaurants, essential food products, pharmaceuticals, accommodation services, computers, solar systems and other specific goods and services. Exported goods, international transport, the supply of gold to the Central Bank of North Macedonia, and intermediary services related to the above‑mentioned goods and services are zero-rated. In recent years, North Macedonia has decreased the number of goods and services for which reduced rates apply, which is in line with OECD recommendations. Reduced rates and exemptions add to the complexity of the VAT system and are not the most effective way of promoting certain sectors of the economy or addressing equity concerns (OECD, 2022[8]). Other measures, such as providing targeted support through the income tax system, tend to be more effective (Thomas, 2020[9]).

Regarding digital taxation, North Macedonia has not yet fully implemented the International VAT/GST (goods and services tax) Guidelines, although it does levy VAT on cross-border digital services. Additionally, the rules determining the place of taxation reference the usual residence of the private consumer, aligned with the destination principle in the Guidelines. Involving digital platforms in the VAT collection and remittal process can lower administrative costs and increase efficiency.

In terms of environmentally related taxes, North Macedonia levies excise taxes on gasoline and diesel fuel. As of 2020, motor vehicles are no longer subject to the standard excise tax but are instead taxed based on the vehicle’s CO₂ emissions (Box 5.1). For some energy sources such as natural gas, coal, coke, and biofuels, however, the excise tax is set at 0%. Additionally, there is currently no carbon tax, and North Macedonia has not yet assessed how it will be affected by the EU’s Carbon Border Adjustment Mechanism (CBAM).1 However, the government of North Macedonia is currently discussing the impact of the EU CBAM on the performance of companies in the affected industries, which will subsequently inform the decision-making process regarding the introduction of carbon taxes.

Box 5.1. North Macedonia’s taxation on motor vehicles

In January 2020, North Macedonia adopted the new “Motor Vehicle Tax Law,” introducing taxation based on a vehicle's carbon emissions. The overarching objective of this law is to increase citizens’ environmental awareness and incentivize them to drive and purchase vehicles that pollute less. This will consequently reduce air pollution and achieve a cleaner, greener environment.

Calculation of the motor vehicle tax consists of two components: the ad valorem component, which consists of taxation as a percentage of the vehicle’s value, and the specific component, which uses the carbon dioxide emission data from the vehicle. Notably, the ad valorem component includes a mechanism for distinguishing between cheaper and more expensive vehicles: in other words, citizens who own more expensive cars will pay a higher amount of tax. This stipulation helps to protect and compensate lower-income groups of the population.

The law also includes an exemption from this tax for environmentally friendly vehicles, such as self-propelled passenger vehicles with electric motors and electric motorcycles and scooters.

Source: Republic of North Macedonia Ministry of Finance (2020[10])

Similar to environmental taxes, the role of health taxes can be strengthened further. Tobacco and alcohol products are subject to excise taxes in North Macedonia. For all tobacco products, the excise tax consists of a specific and ad valorem component. However, unlike cigarettes, where the ad valorem component is 9% of the retail price, the ad valorem component for other tobacco products (such as cigars) is 0%. As is common, the excise tax on alcohol consists only of a specific component. Combining specific and ad valorem taxes for tobacco products is an effective strategy to discourage consumption of, or maximise revenue from, both high- and low-value products (OECD, 2020[11]). Moreover, the total tax burden on the most popular brand of cigarettes is at least 75% of the retail price, which is the minimum level recommended by the World Health Organisation (WHO) (WHO, 2021[12]). Furthermore, North Macedonia is introducing a track and trace system to help increase compliance with health taxes.

Expanding and regularising public tax expenditure reporting increases transparency and improves efficiency. North Macedonia has only prepared one tax expenditure (TE) report, but it plans to regularly report TEs in the budget starting in 2025. Estimating the tax revenue forgone of all TEs including tax incentives allows policy makers to conduct important cost-benefit analyses that can help inform tax reforms.

Sub-dimension 4.2: Tax administration

Concerning tax administration functions and structure, the Public Revenue Office (PRO) of North Macedonia is a unified administrative body managing all direct and indirect taxes. The Financial Police Department conducts tax fraud investigations. The PRO's internal organisation follows both functions and a taxpayer group approach, as it is generally organised by function but also has an office dedicated to large taxpayers. Furthermore, the PRO is regularly audited, and the Tax Academy trains employees.

The PRO’s General Tax Inspectorate and its six regional offices handle compliance assessment and risk management. The Audit Plan is determined using a risk-based approach. The General Tax Inspectorate prepares a monthly list of risky taxpayers subject to audit during the month. A data-based risk assessment system, analysis of individual cases, and random selection inform the list. The performance of the audit selection methods is measured against the randomly selected ones to evaluate their effectiveness.

Despite progress in the independence and transparency of the PRO, some areas require improvement. Regarding independence and transparency, North Macedonia has yet to establish an independent management board of tax authorities and ensure that the tax administration is separate from the Ministry of Finance. The PRO’s budget is determined in the annual budget process but also receives additional funds in proportion to the additional revenue raised from certain activities. Employees are subject to a code of conduct and are clearly and directly under the control of the chief executive of the tax authority.

Tax filing and payment procedures in North Macedonia are simple, and the tax administration’s efficiency is regularly monitored. Broad access to e-filing is available for all major taxes, and filing electronically is mandatory for VAT. Almost 100% of VAT and PIT returns and over 96% of CIT returns are filed electronically, and the software to e-file is available free of charge.

There is a wide range of taxpayer services available, and there are regular surveys to measure the satisfaction of taxpayers. As part of taxpayer services, the PRO provides online access to information, electronic communications, and in-person inquiries. 75% of written correspondence is answered within 15 working days, and 98% of questions over the phone are answered immediately after the call and must be addressed within five working days otherwise.

Overview of implementation of Competitiveness Outlook 2021 recommendations

North Macedonia has made largely positive advances toward implementing past CO Recommendations, with moderate or strong progress achieved in most areas since 2021. Particularly impressive strides were made toward strengthening tax expenditure reporting and considering the implications of GloBE Rules. However, in other domains, such as shifting the employee SSC burden to PIT, progress was limited. Table 5.3 shows the economy’s progress on implementing past recommendations for tax policy.

Table 5.3. North Macedonia’s progress on past recommendations for tax policy

Competitiveness Outlook 2021 recommendations	Progress status	Level of progress
Continue to support the economy and facilitate the economic recovery from COVID-19 with targeted tax and subsidy measures	All COVID-19 related tax measures have been phased out.	Strong
Assess the balance between employee SSCs and PIT	Some assessment has been undertaken in the government’s annual Operational Plan for active programmes and measures, designed to increase the number of people in the labour market and the formal sector. This resulted in targeted PIT measures to increase formal employment.	Moderate
Continue to strengthen the tax expenditure report and publish it as part of the annual budget, as planned	North Macedonia has prepared a Tax Expenditure report and plans to do so regularly starting in 2025.	Strong
Follow the discussion of the OECD/G20 Tax Challenges Arising from Digitalisation project and, in particular the work on Pillar 2	North Macedonia has indicated that it will assess the impact from the GloBE Rules.	Moderate
Re-evaluate the merits and disadvantages of worldwide taxation for resident companies	No indication that this assessment has taken place or resulted in policy action.	None
Strengthen the available forecasting and micro-simulation models to assess the tax system and reforms, as planned	Micro-simulation models for CIT and PIT continue to be used and strengthened.	Moderate
Continue to engage with the international tax community and implement international best practices	North Macedonia is actively participating in, and tracking the developments of the Inclusive Framework on Base Erosion and Profit Shifting (BEPS).	Moderate
Foster regional co-operation and co-ordination on common tax issues	North Macedonia has signed additional Memorandums of Understanding with most WB6 economies and other economies in the broader region.	Moderate

The way forward for tax policy

Considering the level of the previous recommendations’ implementation, there are still areas in which North Macedonia could enhance the tax policy framework and further improve the functioning of the tax administration. As such, policy makers may wish to:

• Consider broadening and diversifying the tax base by increasing taxes on personal and corporate income in addition to expanding health and environmentally related taxes. Expanding the sources of tax revenue in the economy enhances the capacity to fund crucial public services for economic competitiveness and, if executed effectively, can mitigate economic costs arising from negative externalities related to climate change.

• Strengthen carbon pricing by levying excise taxes on more energy sources. There exists significant scope to strengthen carbon pricing, which has the dual benefit of reducing CO₂ emissions and raising tax revenues that can be used to offset distributional impacts and finance other government initiatives (OECD, 2022[13]). Such fiscal incentives will make economic growth in North Macedonia more sustainable in the long run.

• Assess the implications of the EU's Carbon Border Adjustment Mechanism. Analysing and planning for the implementation of the EU’s CBAM is important to avoid forgoing tax revenues that would otherwise be collected by the EU.

• Assess the impact of GloBE Rules on large in-scope MNEs operating in North Macedonia. North Macedonia has indicated that it will assess the impact that the GloBE Rules have on the domestic economy and its tax incentives. Depending on the outcome of such a review, policy makers may wish to consider implementing a QDMTT.

• Conduct a cost-benefit analysis of profit-based tax incentives, especially in the Special Economic Zones, in light of the GloBE Rules. Profit-based tax incentives are less efficient than their cost-based counterparts. Additionally, they are, in some instances, more likely to be impacted by the GloBE Rules.

• Assess the impact of future demographic changes on revenue and the functioning of the SSC system. This evaluation would serve as a step towards developing a plan to make North Macedonia’s public finances more resilient.

• Implement a vendor collection regime supported by streamlined registration and collection procedures. This regime would help collect VAT on business-to-consumer supplies of services and intangibles supplied by non-resident providers (OECD, 2019[14]). This approach to digital taxation can simplify the VAT compliance process for consumers, particularly in the case of cross-border transactions, as non-resident providers may be unfair competitors to local suppliers.

• Regularise public tax expenditure reporting to increase transparency and improve efficiency. Public tax expenditure reporting allows for independent evaluations of the economy’s tax incentives, leading to improved fiscal policies impacting businesses and increased trust in government. Box 5.2 lists OECD good practices that could help North Macedonia improve its tax expenditure reporting.

Box 5.2. Best practices in tax expenditure reporting

The main goal of tax expenditure (TE) reporting is to increase transparency and accountability and, in this way, contribute to well-informed choices on allocation of resources. Some best practices include:

• Publication of TE reports should be integrated into the budgetary process compulsorily. Bringing TEs into the budgetary process should increase transparency by subjecting them to a similar level of scrutiny as direct expenditures.

• Reporting should ideally be on an annual basis, which is the practice in most countries.

• The benchmark should be clearly defined and documented. The report should include a clear description of the benchmark tax system. Ideally, the TE report (or an accompanying methodological annexe or background document) should include a discussion and justification for the choice of that benchmark.

• The TE estimation method should be described in detail on an item-by-item basis within the TE report, either as part of the main body of the report or as an annex within the report. This will provide transparency and clarity to the reader the underlying calculations and TE estimates.

• TE reports should classify provisions along different dimensions. Ideally, TEs should be classified by tax base (PIT, CIT, VAT, excise taxes, etc.), type of TE (credit, allowance, exemption, reduced rate), the function to which they are attributable (education, fuel and energy, health, defence, etc.), their policy objective (employment, R&D and innovation, housing, reducing poverty, etc.) and the targeted beneficiary group (corporations, individuals, SMEs, the self-employed, etc.).

• Ranking all TEs by their value or otherwise listing the top TEs can improve clarity and guide users to the main provisions in terms of revenue forgone. While the United States ranks all TEs by total value, France, Germany and Australia provide a non-exhaustive list of the top ten or fifteen TEs. All TEs should be listed. The cost of certain TEs may not be reported because of lack of data or disproportionate estimation costs, among other factors. TE reports should nonetheless list all TEs identified, irrespective of whether they are measured or not.

Sources: IMF (2020[15]);Kassim and Mansour (2018[16]); Redonda and Neubig (2018[17]);

References

[7] Eurostat (2023), Population Structure and Ageing, https://ec.europa.eu/eurostat/statistics-explained/index.php?title=Population_structure_and_ageing (accessed on 1 March 2024).

[15] IMF (2020), Chile: Technical Assistance Report - Assessment of Tax Expenditures and Corrective Taxes, https://www.elibrary.imf.org/view/journals/002/2020/305/article-A001-en.xml#A01fn04.

[16] Kassim, L. and M. Mansour (2018), Tax Expenditures Reporting in Developing Countries: An Evaluation, https://doi.org/10.3917/edd.322.0113.

[2] Mas-Montserrat, M. et al. (2023), “The design of presumptive tax regimes”, OECD Taxation Working Papers, No. 59, OECD Publishing, Paris, https://doi.org/10.1787/141239bb-en.

[17] Neubig, T. and A. Redonda (2018), Assessing Tax Expenditure Reporting in G20 and OECD Economies, https://www.cepweb.org/assessing-tax-expenditure-reporting-in-g20-and-oecd-economies/.

[8] OECD (2022), Consumption Tax Trends 2022: VAT/GST and Excise, Core Design Features and Trends, OECD Publishing, Paris, https://doi.org/10.1787/6525a942-en.

[13] OECD (2022), Pricing Greenhouse Gas Emissions: Turning Climate Targets into Climate Action, OECD Series on Carbon Pricing and Energy Taxation, OECD Publishing, Paris, https://doi.org/10.1787/e9778969-en.

[1] OECD (2022), Revenue Statistics 2022: The Impact of COVID-19 on OECD Tax Revenues, OECD Publishing, Paris, https://doi.org/10.1787/8a691b03-en.

[3] OECD (2022), Tax Incentives and the Global Minimum Corporate Tax: Reconsidering Tax Incentives after the GloBE Rules, OECD Publishing, Paris, https://doi.org/10.1787/25d30b96-en.

[4] OECD (2021), Tax Challenges Arising from Digitalisation of the Economy – Global Anti-Base Erosion Model Rules (Pillar Two): Inclusive Framework on BEPS, OECD/G20 Base Erosion and Profit Shifting Project, OECD Publishing, Paris, https://doi.org/10.1787/782bac33-en.

[11] OECD (2020), Consumption Tax Trends 2020: VAT/GST and Excise Rates, Trends and Policy Issues, OECD Publishing, Paris, https://doi.org/10.1787/152def2d-en.

[14] OECD (2019), The Role of Digital Platforms in the Collection of VAT/GST on Online Sales, OECD Publishing, Paris, https://doi.org/10.1787/e0e2dd2d-en.

[5] OECD (2017), Standard for Automatic Exchange of Financial Account Information in Tax Matters, Second Edition, OECD Publishing, Paris, https://doi.org/10.1787/9789264267992-en.

[10] Republic of North Macedonia Ministry of Finance (2020), MVT Calculator, https://customs.gov.mk/en-GB/pocetna/e-carina/kalkulator-za-dmv.nspx (accessed on 5 June 2024).

[9] Thomas, A. (2020), “Reassessing the regressivity of the VAT”, OECD Taxation Working Papers, No. 49, OECD Publishing, Paris, https://doi.org/10.1787/b76ced82-en.

[6] WHO (2021), Older People and Access to Health Care in North Macedonia, World Health Organization, https://apps.who.int/iris/bitstream/handle/10665/339644/9789289055420-eng.pdf.

[12] WHO (2021), WHO Technical Manual on Tobacco Tax Policy and Administration, https://www.who.int/publications/i/item/9789240019188.

Note

← 1.  The EU Carbon Border Adjustment Mechanism (CBAM) is the policy instrument designed to reduce the likelihood of carbon leakage by instituting a carbon price on imported goods. This tool reflects the EU’s commitments to reducing its greenhouse gas emissions under the “Fit for 55” package while still ensuring a level playing field between EU and non-EU businesses. The CBAM’s transitional period, which started on 1 October 2023 and continues until the end of 2025, exclusively involves reporting obligations; however, from 1 January 2025, carbon pricing will also be implemented.