On 27 December 2024, the Macedonian Parliament adopted the Law on Minimum Global Corporate Income Tax (the Law), that introduces the Pillar Two rules prescribed by OECD/G-20, and that prescribe a minimum tax rate of 15% for multinational companies as well as large-scale domestic groups (i.e. groups having turnover of over EUR 750 million in two of the past four years). The Law was published on January 3 2025, in Official Gazette No. 3/2025.
According to the elaborate to the Law that was submitted to Parliament, its provisions are aligned with EU Directive 2022/2523.
Further to the elaborate to the Law, the minimum effective taxation of such groups is set at 15%, and is to be assured with the following rules for additional taxation:
- Domestic Top-up Tax – DMTT, according to which Macedonian subsidiaries or permanent establishments of foreign groups would pay Top-up Tax on their excess profits;
- Income Inclusion Rule - IRR, according to which a Macedonian tax resident ultimate parent of a multinational group or large-scale domestic group would compute and pay its allocable share of top-up tax in respect of the low-taxed constituent entities of the group
- Undertaxed Payment Rule – UTPR, according to which a Macedonian subsidiary or permanent establishment that is a part of a multinational group would have an additional cash tax expense equal to its share of top-up tax that was not charged under the IIR in respect of the low-taxed constituent entities of the group.
The Law entered into force on the day of its publishing in Official Gazette and is to apply for the fiscal year starting on 1 January 2024 except for the UTPR that will start to apply as of 1 January 2025.
For information
Srdjan Randjelovic
Partner
Tel.: +389 2 313 52 20
Koce Jovanov
Senior Manager, Tax
Tel: +389 2 313 52 20