The Assembly of Republic of North Macedonia adopted the new Law on Minimum Global Profit Tax, which was published in the Official Gazette no. 3 of 03.01.2025.
The law regulates measures to ensure minimum effective taxation of the profit of groups of multinational companies and large domestic groups, constituent entities, method of calculating the effective tax rate, calculation of the tax base and the tax liability of additional tax, excluded entities, collection procedure information on constituent entities and the method of submitting the application and payment of the additional tax in order to calculate and pay the minimum global profit tax.
The purpose of enacting the Law on Minimum Global Profit Tax is to comply with Council Directive (EU) 2022/2523 of December 14, 2022 to ensure a global minimum level of taxation for groups of multinational companies and large domestic groups in the Union.
The Minimum Global Income Tax Act applies to constituent entities that are members of a multinational group of companies or a large domestic group, whose annual income in the consolidated financial statements of the ultimate parent company in at least two of the four fiscal years immediately preceding the tested fiscal year is 750,000,000 euros or more. According to the provisions of the law, this law will cover the parent companies and their related entities that meet the requirement for the achieved revenue threshold. Those companies that have revenues below the threshold (less than 750 million euros of revenues), the excluded entities prescribed by this law (public entity, international organization, non-profit organization, pension fund, investment fund) as well as companies that meet the so-called “de minimis” exception”, are not subject to the obligation to pay additional tax.
The minimum effective taxation of the profit of the entities is ensured by applying the rules for payment of additional tax, determined according to the provisions of the law, namely:
a) rule for determining qualified domestic additional tax, according to which additional tax is calculated and paid for the excess profit of all constituent entities that are subject to a low tax rate and are located in the Republic of North Macedonia;
b) the profit inclusion rule, according to which the parent company of the group of multinational companies or of the large domestic group calculates and pays its allocated part of the additional tax in relation to the constituent entities of the group that are subject to a low tax rate;
c) the rule of less taxed profit, according to which a constituent entity of a multinational group is subject to an additional tax equal to its share of the additional tax that was not collected based on the rule of inclusion of profit for constituent entities of the group subject to a low tax rate .
By prescribing an obligation to pay a qualified domestic additional tax, the tax base in the Republic of North Macedonia is protected, given that by prescribing a tax obligation for the constituent entities of multinational companies operating in the Republic of North Macedonia, the additional tax will be collected in our country and not in the country where the multinational company has its headquarters.