North Macedonia has introduced significant changes in its VAT law and Pillar Two top-up tax guidelines, which will have important implications for multinational companies with operations or transactions in the region. The most recent updates, effective from December 2025, cover VAT exemptions and the Pillar Two tax framework, both of which will shape the compliance landscape for businesses in the coming years.
This article breaks down the key amendments and how they interact with Transfer Pricing compliance in North Macedonia, highlighting the new VAT rules and Pillar Two top-up tax guidance that will affect your financial and tax planning.
Key VAT Amendments in North Macedonia for 2026
The VAT law in North Macedonia has undergone crucial changes, impacting both businesses and individuals involved in import and domestic transactions. These changes reflect ongoing alignment with EU tax standards while addressing specific local needs.
1. VAT Exemption for Small Value Shipments
Effective December 18, 2025, the VAT exemption for small value shipments has been adjusted. The new rules limit the exemption to non-commercial shipments between individuals. The exemption threshold remains at €22, but it excludes alcohol, tobacco, and perfumes.
Key Implications for Transfer Pricing:
- Multinational companies with cross-border transactions should review how small value goods are classified and reported.
- The non-commercial nature requirement means businesses must ensure proper documentation for goods shipped to North Macedonia to avoid unintended tax liabilities.
2. Extension of 5% VAT Rate for Residential Buildings
A key change that affects the real estate sector is the extension of the preferential 5% VAT rate for residential buildings and apartments. This VAT rate is now extended through December 31, 2028, providing a long-term tax relief for developers and investors in residential properties.
What Does This Mean for Transfer Pricing in the Real Estate Sector?
- Companies involved in real estate development and construction must carefully track VAT obligations for transactions involving residential buildings to ensure compliance with the extended preferential rate.
- Multinational groups may need to adjust their Transfer Pricing policies for related-party transactions in the real estate sector to reflect these new VAT rules.
New Pillar Two Top-Up Tax Guidance: Compliance and Reporting
North Macedonia has introduced new rules for Pillar Two top-up tax in alignment with OECD guidelines. These updates, published on December 31, 2025, introduce specific reporting requirements for multinational enterprises.
What Is the Pillar Two Top-Up Tax?
The Pillar Two top-up tax ensures multinational companies with low tax rates pay a minimum global tax rate. North Macedonia has adopted a clear framework for QDMTT, IIR, and UTPR compliance, requiring annual filings.
Key Aspects of the New Rulebook:
- QDMTT, IIR, and UTPR rules apply to entities in North Macedonia.
- Companies must track and report global tax positions for compliance.
What This Means for Transfer Pricing:
- Multinational groups must adjust Transfer Pricing models to align with minimum tax rates.
- Monitor related-party transactions closely to meet Pillar Two requirements.
- Accurate documentation of intercompany transactions is now essential for compliance.
This shift requires multinationals in North Macedonia to ensure their Transfer Pricing policies are Pillar Two-compliant for 2026 and beyond.
How Multinational Groups Should Prepare for the 2026 Changes
As these new measures begin to take effect, multinational groups operating in North Macedonia will need to adjust their tax strategies and reporting processes to stay compliant. Here are the key steps to take:
1. Review Transfer Pricing Policies
- Ensure that intercompany transactions align with OECD guidelines and Pillar Two rules.
- Update documentation for related-party transactions to reflect compliance with minimum tax requirements and new VAT rules.
2. Adjust for VAT Changes
- Ensure that your real estate transactions and small value imports comply with the updated VAT exemptions and preferential rates.
- Train finance and tax teams on how to handle VAT in the TRIBU-CR system and ensure timely filings.
3. Strengthen Compliance Processes
- Invest in automated tax compliance systems to handle Pillar Two reporting and VAT calculations efficiently.
- Regularly audit your global tax position to ensure consistency with minimum tax requirements.
4. Align Financial Planning
- Update your budgeting and forecasting processes to account for Pillar Two tax liabilities, particularly as they apply to your North Macedonia operations.
- Incorporate VAT implications into your financial models to ensure that tax planning reflects new rules.
How TransferPricing.report Can Support Your Business in North Macedonia
At TransferPricing.report, we help multinational companies navigate tax changes in North Macedonia with ease.
Our services include:
- Transfer Pricing documentation that aligns with new VAT and Pillar Two requirements.
- Benchmarking and pricing strategies to ensure compliance with OECD standards and local tax laws.
- Audit support for Pillar Two top-up tax and domestic minimum tax compliance.
- VAT strategy reviews for real estate developers and cross-border importers.
Let us help you stay ahead of the 2026 compliance deadlines and avoid penalties.
Final Takeaway: Get Ready for 2026 Tax Changes in North Macedonia
With the extension of preferential VAT rates and the introduction of Pillar Two top-up tax guidance, North Macedonia is aligning its tax policies with global standards. Multinational companies need to ensure that their Transfer Pricing documentation and tax strategies are ready for these changes.
- Operating in North Macedonia?
- Confident your Transfer Pricing policies are compliant?
Contact our Transfer Pricing specialists today to ensure your business is fully prepared for 2026 tax updates in North Macedonia.
This is general information only and not professional advice. Consult a professional before acting.