All material subject to strictly enforced copyright laws. © 2022 ITR is part of the Euromoney Institutional Investor PLC group.

FYR Macedonia: FYR Macedonia changes tax treatment of uncollected loans


Elena Kostovska

The corporate income tax system in FYR Macedonia – since its groundbreaking revamping in 2011 – has been mostly concerned with the unrecognised (non-deductible) expenses of a company for the purposes of determining its tax base, as opposed to the actual profit of a company. However, within the past three years of the validity of this novel corporate income tax regime, and due to the resulting shrinking of the tax base of companies, the government and tax authorities are finding themselves in a constant loop of amendments aimed at widening the tax base by effectively introducing new categories in the so-called unrecognised expenses list.

Early in 2014, a change in the tax treatment of uncollected loan amounts was introduced. From January 31 2014, outstanding receivables' balances on loans granted from one resident entity to another, which haven't been collected within the same year that they were extended, are to be considered as written off during the year in question and to be thus regarded as unrecognised expenses for the loan-granting entity. Consequently, this results in the increase of the company's corporate income tax base. Thus, all inter-company loans extended after January 31 2014 are now subject to this change, with older loans not impacted by the amendment in any way.

It is worth noting that this change is only applicable to companies which are taxpayers in the sense of the standard corporate income tax regime (with 10% imposed on a tax base consisting of unrecognised expenses plus understated revenues plus any distributed profits) and does not impact companies which, due to their size, have opted to pay corporate income tax on a tax base of total revenue (at the rate of 1% on total revenues). Additionally, the above change impacts all inter-company loans, regardless of whether they are extended between related or unrelated entities.

One should keep in mind that, in addition to increasing the tax base in the year in which the loan receivables were not collected (thus increasing the amount of corporate income tax due), during the year in which loan receivables will in fact be collected, the tax base is to be decreased by the amount of the collection, thus enabling the taxpayer to pay less corporate income tax in the periods when they actually collect the loan amounts.

Elena Kostovska (

Eurofast Global, Skopje Office

Tel: +389 2 2400225


More from across our site

The state secretary told the French press that the country continues to oppose pillar two’s global minimum tax rate following an Ecofin meeting last week.
This week the Biden administration has run into opposition over a proposal for a federal gas tax holiday, while the European Parliament has approved a plan for an EU carbon border mechanism.
Businesses need to improve on data management to ensure tax departments become much more integrated, according to Microsoft’s chief digital officer at a KPMG event.
Businesses must ensure any alternative benchmark rate is included in their TP studies and approved by tax authorities, as Libor for the US ends in exactly a year.
Tax directors warn that a lack of adequate planning for VAT rule changes could leave businesses exposed to regulatory errors and costly fines.
Tax professionals have urged suppliers of goods from Great Britain to Northern Ireland to pause any plans to restructure their supply chains following the NI Protocol Bill.
Tax leaders say communication with peers is important for risk management, especially on how to approach regional authorities.
Advances in compliance tools in international markets and the digitalisation of global tax administrations are increasing in-house demand for technologists.
The US fast-food company has agreed to pay €1.25 billion to settle the French investigation into its transfer pricing arrangements over allegations of tax evasion.
HM Revenue and Customs said the UK pillar two legislation will be delayed until at least December 2023, while ITR reported on a secret Netflix settlement and an IMF study on VAT cuts.
We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree