PERSONAL INCOME TAX LAW (Revised version*)
PERSONAL INCOME TAX LAW
(Published in the Official Gazette of the Republic of Macedonia No. 80/93, 3/94,70/94,71/96, 28/97,
8/2001, 50/2001, 52/2001, 02/2002, 44/2002, 96/2004, 120/2005, 52/2006 and 139/2006)
This Law shall introduce the personal income tax and shall regulate the taxation procedure
of the citizens' personal income.
Personal income tax (hereinafter: income tax) shall be paid annually for the sum of the net
revenue from all sources, except for the revenues that are tax exempt under this Law.
(1)The following types of revenues realized in the country and abroad shall be included in the
income subject to taxation:
-wages and salaries;
-income from agriculture;
-income from independent activity;
-income from property and property rights;
-income from copyrights and rights to industrial property;
-gains from games of chance and other premium games; and
(2)All revenues referred to in paragraph 1 of this Article, which are realized in cash, in securities, in
kind or through other means, shall be subject to taxation.
(1)The tax period for which the personal income tax is determined shall cover one calendar year.
(2)For the different types of revenues under Article 3 of this Law, an advance payment of the
income tax shall be calculated throughout the fiscal year, which is paid by deduction from each
salary payment or based on the decision of the public revenue authorities, unless otherwise
determined by this Law.
(3)The amount of the paid tax referred to in paragraph 2 of this Article shall be deducted from the
estimated annual income tax, while the tax exemptions shall be entitled in the amount approved
with the advance estimation.
The annual amount of the income tax and the amounts of the advance payments and tax
deductions that are deducted from the annual taxation shall be determined by the regulations that
are valid on January 1 in the year in which the tax is determined, unless otherwise determined by
Income tax shall not be payable on earnings for the following:
(1)awards granted by the United Nations and other international organizations;
(2)awards granted for lifetime achievements in science, culture and sports;
(3)scholarships and allowances given to pupils and students through public administration
agencies and foundations in compliance with the Law;
(3-a) awards to pupils and student during mandatory practical training up to Denar 4,000 monthly;
(3-b) awards to pupils and students won on contents within the educational system.
(4)rewards to athletes for achieved results in the official international competitions;
(5)scholarships to athletes ;
(6)compensation for official trips, fieldwork allowances and allowances for living separately from
the employees' family, in the amount determined by the general collective agreement in the
economy in the Republic of Macedonia, i.e. in the amount determined by the regulations of the
6-a) compensations for the costs for using private vehicle for the purpose of the employer in the
amount of 30% of the price of 1 liter of fuel used by the vehicle for every passed kilometer, but up
to Denar 3,500 per month at the most;
(7) food allowance for the employees in the economy, should food not be arranged in the amount of
20% of the average net salary per employee in the Republic of Macedonia paid in the last three
months, i.e. the employees in the non-economic sector in the amount determined by the regulations
of the management bodies.
Travel allowance for the employees in the economy to/from work when the traveling exceeds two
kilometers in case when there is no arranged transportation in the amount of the standards costs in
the public transport, i.e. for the employees in the non-economic sector in the amount determined by
the regulations of the management bodies;
(7-) compensation of the transportation expenses to the place where activities are carried out and
back and the food expenses to the unemployed persons engaged by public enterprises to perform
public works, pursuant to Article 85 of the Law on Employment and Unemployment Insurance.
(8) disability allowance, salary and pension for disabled persons;
(10)other social allowances for children determined by the Law;
(11)unemployment benefit determined by the law;
(12)compensation for the death of a family member up to the determined amount;
(13)compensation for suffered damages from catastrophes up to the determined amount;
(14)compensation for health insurance excluding salary compensation;
(16)compensation for corporal injuries;
(17)compensation for damages based on life and property insurance, if the costs for the insurance
are borne by the insured person ;
(18)interests from public loans;
(19)interest on bonds issued by the Republic of Macedonia and the local self- government units;
(20)interests on savings deposits, current accounts and sight deposits;
(21) alimentation and compensation for damages upon court decision and compensation of
damages as a consequence from accident at work.
(21a) revenues from sale of useful solid waste earned by a natural person;
(21b) revenues from sale of harvested medicinal herbs and forest fruits, earned by a natural
(22) severance pay for retirement in the amount of two average monthly net salary per employee
paid in the Republic of Macedonia in the last three months;
(23) one-time allowance as severance pay for constant employment under conditions and
procedures determined by the law;
(24) earnings on the basis of received donations in line with the Law on Donations and Sponsorship
for Public Activities;
(25) salaries of the employees at the taxpayer operating in a free economic zone, technological
industrial developing zone, in the amount of 50% for a five-year period, from the beginning of
performing the activities under the conditions and procedure determined by the Law.
ANNUAL INCOME TAX 1.
(1)Every physical person, being resident of the Republic of Macedonia, shall be obliged to pay tax
on the income realized in the country and abroad.
(2)A resident under this Law shall be any physical person who has a permanent or temporary
residence on the territory of the Republic of Macedonia.
(3)The resident has temporary residence if he/she resides on the territory of the Republic of
Macedonia either continuously or with interruptions for 183 or more days in the calendar year, or if
he/she has intention to reside in the country for 183 or more days in a period of 12 months.
A taxpayer of the income tax, in the sense of this law, shall be any physical person
-proprietor, sole proprietor, as well as individuals performing agricultural activity, craftsman activity
and persons performing services or free activities.
(1)A physical person who is non-resident of the country shall be obliged to pay tax for the income
earned on the territory of the country.
(2)A physical person that earns an income from unauthorized activities shall also be obliged to pay
tax according to the provisions of this Law.
2. Tax Base
(1)An income tax base shall be the income subject to taxation referred to in Article 3 of this Law,
(2)contributions for pension, disability and health insurance, and for employment, except for
contributions for agriculture payable by farmers on the basis of their cadastral income;
(3)contributions for voluntary pension and disability insurance paid by the taxpayer;
(4)personal exemption in the amount of 30,000 denars in annual income tax calculations;
(5)fees and other public duties paid from the taxpayer's income.
(6)Reductions from paragraph 1 of this Article shall not be recognized while calculating the income
tax realized by non-residents on the territory of the Republic of Macedonia.
(1)The amount of the personal exemption referred to in Article 10 item 3 of this Law shall be
valuated at the beginning of each year with the planned growth of the net wages of the employees
in the country for that year, determined in the Macroeconomic Policy of the Government of the
Republic of Macedonia.
(2)The amount of the personal exemption referred to in paragraph 1 of this Article shall be
declared by the Minister of Finance at the beginning of each year.
3. Tax Rates
Income tax shall be paid at 10% rate.
In order to avoid double taxation, the computed personal income tax shall be reduced by
the amount of the personal income tax paid abroad, not exceeding the amount resulting from the
application of the tax rate referred to in article 12 of this Law.
CLASSIFICATION OF REVENUES
1. Personal Incomes
Personal incomes shall be all revenues that a taxpayer will realize through employment,
including the revenues realized on a contract basis for occasional or temporary rendering of
services to public administration agencies, domestic and foreign legal persons, as well as to
domestic and foreign natural persons that are self-employed, unless they are tax exempt under this
Personal incomes referred to in Article 14 of this Law shall refer to:
(1)Salaries and cost allowance arising from employment paid above the amounts determined in
Article 6 of the Law and all other allowances stipulated by the Law on Labour Relations.
(3)incomes of members of management and supervisory boards in the enterprises;
(4)personal income realized by officials, members of parliament, advisers and other high-rank
(5)income realized by professional sportsmen;
(6)sick leave allowance;
(7)annual leave allowance;
(8)allowances for justices and jury members, forensic experts and receivers not employed in the
respective institutions or enterprises;
(9)salaries of the members of the Macedonian Academy of Sciences and Arts;
(10)salaries earned abroad under contracts concluded in the country, and
(11)each separate income realized on a contract basis for rendering services to legal and physical
persons temporarily or occasionally.
Personal incomes referred to in paragraph 1 of this Article shall also include other incomes
which, instead of in cash, are realized in coupons, money receipts, shares, merchandise, or in
some other form that has monetary value.
The base for computation of the personal income tax shall represent the following:
(1)earned gross salary, gross amount of cost allowances arising from employment paid above the
amounts determined in Article 6 of the Law and gross amount of all other allowances stipulated by
the Law on Labour Relations, reduced by the contributions and personal exemption;
(2)gross salary earned by work abroad through employment established in the country and reduced
by the contributions and personal exemption;
(3)gross pension reduced by the contributions and personal exemption;
(4)gross amount of the income, the compensation and the income referred to in Article 14-a, items
3, 4, 5,8, 9 and 11 of this Law, and revenues that are not realized through employment;
(5)gross salary and gross amount of cost allowances arising from employment of a foreign
physical person non-resident working with resident of the Republic of Macedonia, paid above the
amounts determined in Article 6 of the Law and gross amount of all other allowances stipulated by
the Law on Labour Relations;
(6)gross salary and gross amount of cost allowances arising from employment realized by a
resident working with foreign diplomatic and consular representative offices and international
organizations in the Republic of Macedonia, paid above the amounts determined in Article 6 of the
Law and gross amount of all other allowances stipulated by the Law on Labour Relations, reduced
by the contributions and the personal exemption;
(7)nominal value of coupons, money receipts and securities;
(8)price that would be achieved with sale of goods, if salaries were paid in kind;
Compensation that would be achieved on the market for salaries in some other form, which
is not specified in the items from 1) to 7) of this Article.
The price, i.e. compensation, referred to in paragraph 1, item 8 of this Article shall be
determined by the employer at the moment of giving the respective salary.
If the Public Revenue Office estimates that the determined price, i.e. compensation,
referred to in paragraph 1, item 8 of this Article is lower than the one that could be achieved on the
market, it will re-determine the price i.e. the fee in accordance with the market.
(1) The income tax on salaries referred to in Article 14 of this Law shall be an advance one,
unless otherwise specified by this Law.
(2) The taxpayer's tax base of his/her personal income through employment and pension
shall be entitled to the amount of the personal exemption, i.e. by one twelfth of the amount
determined in Article 10, paragraph 1, item 3 of this Law.
Personal income earned through employment in foreign diplomatic and consular missions
and representatives and officers of such missions in the country are tax-exempt under reciprocity
for the following cases:
-the heads of foreign diplomatic missions accredited in the Republic of Macedonia, the staff of
the foreign missions in the Republic of Macedonia, as well as members of their families, if
those family members are not citizens or residents of the Republic of Macedonia;
-the heads of foreign consular missions and consular officials authorized to perform consular
duties, as well as members of their families, if those family members are not citizens or
residents of the Republic of Macedonia;
-officials of the UN and UN specialized agencies, experts for technical assistance of the UN
and its specialized agencies;
-individuals employed in foreign diplomatic and consular missions and international
organizations, individuals employed by chiefs of diplomatic and consular missions or
international organizations if they are not citizens or residents of the Republic of Macedonia;
-honorary consular officials and foreign consular missions for the personal income and
allowances they receive from the country that appointed them to perform consular duties.
2. Income from Agricultural Activity
(1)Income from agricultural activity shall apply to the following:
-cadastral income which is determined for each land unit that can be used for agricultural
production or forestry, regardless whether it can be used for that particular production or not;
-the actual income, determined by a procedure stipulated under this Law.
(2)The cadastral income under paragraph 1 item 1 of this Article shall be valorized at the end of
each year for the current calendar year in accordance with a separate law.
(1)The personal income taxpayer shall be an individual that earns an income from agriculture and
forestry and has the status of a physical person, who as an owner or user of land, is recorded in the
land register from December 31 in the year prior to the taxable year.
(2)If the taxpayer referred to in paragraph 1 of this Article has leased the land, the lessee shall be
the obliged taxpayer starting from the day the lease contract is concluded.
(3)The lessor and the lessee shall be obliged to present the lease contract to the public revenue
authorities within a period of eight days starting from the date of its conclusion.
(4)If the land is used by an individual who is recorded in the land register neither as owner, user
nor as the lessee, the respective taxpayer shall be the user of the land.
(5)Changes regarding the taxpayer referred to in paragraph 1 of this Article effected through the
year are valid from January 1 the following year, if they are properly listed in the period determined
by the regulations for land registering.
(1)The base for income tax for earnings from agricultural activities shall be the cadastral income
from the agricultural lands and forests, set by the regulations for determining the cadastral income.
(2)If, before the beginning of the year, the taxpayer opts to pay taxes for the actual income from
agriculture and forestry, the net-profit will be taken as the base.
(1)The taxpayer who earns an income from agricultural activities that notably exceed the cadastral
income deriving from highly accumulative branches, from vegetable and livestock production, as
well as the taxpayer that earns an income from production that is not more or less directly related to
land cultivation such as: industrial raising of poultry and cattle, fruit and vineyard production,
floriculture and mushroom production, bee-keeping, etc., shall pay taxes according to the actual
income and the net-profit shall represent the base.
(2)The Minister of Finance shall establish more specific regulations, determining measures and
criteria for the cases referred to in paragraph 1 of this Article.
(1)Income tax on earnings from agricultural activities shall not be payable for the following:
(2)land that is prohibited by law for usage of agricultural production;
(3)courtyards of churches, temples, monasteries and mosques;
(4)basements and courtyards up to 500 square meters; and
(5)lands on which flood-gates, canals, dams, trenches and other constructions are built for
protection against floods and snowdrifts and for drainage and irrigation.
The exemption referred to in paragraph 1 of this Article shall terminate if the land is no
longer used for purposes for which the exemption was stipulated.
The taxpayer shall be obliged to report the termination of the causes for tax exemption to
the public revenue authorities within a period of 30 days from the date of the change.
(1)The taxpayer shall be temporarily exempt from paying taxes on:
-land that was not exploitable for a period of five years from the beginning of the amelioration of
the land, and
-land on which new vineyards, orchards and other long-standing plantations are cultivated for a
period of five years.
The exemption referred to in paragraph 1 of this Article shall be acknowledged if the
change of cultivation is recorded in the land register.
The tax exemption referred to in paragraph 1 of this Article becomes effective by filing a
request to the public revenue authorities by the end of the year in which the changes occurred.
(1)The taxpayer, whose primary activity is agriculture in the less developed regions shall be exempt
(2)Cadastral communities with over 50% agricultural land from VI to VIII class shall be considered
less developed regions under this Law.
(3)The Government of the Republic of Macedonia shall determine the less developed regions
referred to in paragraph 2 of this Article.
The taxpayer shall be granted 50% tax reduction for investments in melioration and 100%
for re-allocation in the year in which the melioration and re-allocation are administered.
The tax base shall be reduced by the amounts invested in economic building structures
and agricultural equipment by the taxpayer, but up to 30% of the cadastral income.
(1) The taxpayer who will undertake agricultural activity for the first time as his primary
occupation, as well as the person returning to the village, reactivating himself as performer of
agricultural activity and having been registered as unemployed before, shall be tax exempt for a
period of five years.
(2) The taxpayer effectuates his exemption referred to in paragraph 1 of this Article by
submitting a request to the Public Revenue Office within 30 days of the date he began performing
(1)If the yield from one or more land parcels is reduced following major force, plant diseases and
pestilence or other extraordinary events that the taxpayer could not prevent, the cadastral income
shall be reduced for each of those parcels proportionally to the reduction of the yield.
(2)The tax relief referred to in paragraph 1 of this Article shall become effective by filing a request to
the public revenue authorities, within a period of 15 days from the day of the damage occurrence.
(3)By request of the taxpayer, the public revenue authorities shall make the decision based on the
damage estimate by a special damage estimate board founded by the public revenue authorities.
(4)When damage inflicted by natural catastrophes, plant diseases, vermin and other extraordinary
events covers larger areas, procedure shall be undertaken in accordance with the official
3. Personal Income from Business and Professional Activity
(1)The income of the self-employed shall refer to revenues realized from business activities, from
rendering professional and other intellectual services, as well as revenues from agricultural
activities not included in the cadastral income and from other activities whose ultimate objective is
(2)The revenues from business activities shall refer to revenues from production, from rendering
trade, catering, transport and other similar activities.
(3)The revenues from rendering professional and other intellectual services shall refer to revenues
from health, dental, veterinary, lawyer, notary, consulting, auditing, engineering, architectural,
journalistic, sports and other intellectual activities.
(4)The revenues from agricultural activities not included in the cadastral income shall refer to:
(1)poultry and cattle breeding in an industrial manner, not largely or directly related to
land cultivation, fishery, fish and shell breeding, bees or other animals breeding; and
(2)production of seed, planting material, reproduction material, greenhouse production
of fruit, kitchen-garden, industrial and fodder crops , production of agricultural crops,
flowers, bushes and forest trees, mushrooms and other kinds of agricultural and forest
A taxpayer of the self-employment income tax shall be any sole proprietor, as well as any
physical person performing agricultural activities, craftsman activities and persons rendering
services or performing free activities, who realize revenues by performing the activities referred to
in Article 28 of this Law, not considered as proprietors .
(1)If several physical persons realize income by performing joint activities, each of them shall pay
the income tax for the part of the net income that belongs to him/her under the contract for doing
business together. If the contract does not specify their participation, the net income shall be
divided into equal portions so as to obtain the tax base.
(2)The amount of tax payable by the physical person for his/her part of the net income, referred to
in paragraph 1 of this Article, shall not be affected by the fact of whether the net income from the
joint business was distributed or not.
(1)The base of the self-employed income tax shall be the net income determined in the tax balance.
(2)The net income shall be the difference between the taxpayer's total revenues and expenditures.
The total realized revenues and expenditures, referred to in Article 30-a of this Law, are determined
under the accounting regulations and under the provisions of this Law.
(1)The computation of material expenses and the purchase value of the sold merchandise shall be
carried out by applying the method of average prices.
(2)If other methods are applied in the estimation of the stock value, the material expenses and the
purchase value of the sold merchandise, those values shall be expressed in the tax balance in
corrected amounts that would result from the application of the method referred to in paragraph 1 of
(3)When the material expenses and the purchase value of the sold merchandise is calculated by
the method of planned or selling prices, that method may be considered as a method of average
prices, provided that the planned value of the material expenses and the purchase value of the sold
merchandise are corrected in proportion to the difference.
(4)The average purchase prices of the spent materials shall be determined for the part of the sold
Business expenditures, resulting from delivery of goods, materials and rendering of services among
associated legal entities and physical persons shall be determined according to the prices that
would be fetched on the domestic market or on the comparative foreign market in circumstances of
(1)All transactions of the taxpayer with associated persons shall be separately reported in the tax
balance, along with the transfer prices at which the transactions were realized.
(2)The difference between the market and transfer price shall be included in the tax base.
The amount of gross salaries of employees shall be recognized in full as a deductive rate and part
of the business expenditures, in the size of the paid amounts.
(1)The depreciation of tangible and intangible assets shall be recognized as expenditure in the tax
balance up to the amount determined by applying the depreciation rates prescribed by the
Nomenclature of assets for depreciation.
(2)The once depreciated assets or group of assets shall not be re-included in the depreciation
calculation when determining the tax base.
(3)The remaining current value of the assets, that are no longer usable, can be depreciated in full,
regardless of their prescribed useful lives.
(4)The Government of Republic of Macedonia shall prescribe the Nomenclature of assets for
depreciation and the annual depreciation rates, as well as the manner of calculating the
depreciation, that is the write-off of the value of tangible and intangible assets.
When by application of the functional method of depreciation, the total depreciation of the taxpayer
is increased by more than 10% of the depreciation, calculated through the proportionate method,
the Public Revenue Office shall approve the computation of the depreciation through the functional
Article 30-i deleted
The expenditures in the tax balance shall also include:
(1)Expenses for research and development incurred within privately owned research
and development centers, or through independent scientific and research institutions;
(2)Expenses related to interests on credits used exclusively to benefit the taxpayer's
activity, except for interests on credits used for supplying motor vehicles. In case of
credit relations among associated persons, the interest costs shall be recognized up to
the amount of the interests at which a respective credit could be obtained in the
accounting period of the commercial banks;
(3)Premiums paid for an insurance of the taxpayer's business property and all kinds of
compulsory non-life insurance determined with law;
(4)Expenditures paid for allowances for travel to and from work, food allowances for
the employees, one-off allowance in a form of severance payment, per diem
allowance, allowance for death of a worker or member of his family, up to the stipulated
amount, as well as per diems for business trips in the country and abroad, allowance
for detached life, shall be recognized as expenditures in the tax balance at the level set
in General collective agreement in the economy in the Republic of Macedonia, i.e. , in
the amount set in the regulations of the government administration bodies;
(5)The expenses paid for using personal cars for official use by employees are
recognized as part of the expenditures in the tax balance up to 50% of the amount
determined in Article 6 item 6-a of this Law.
(6)The contributions for pension, disability and health insurance, the property tax, the
fees and other public expenses incurred as to benefit the activity, except for the personal income
tax and the rest of the taxpayer's personal expenses;
(7)The expenses for economic marketing aimed at promoting the taxpayer's activity are
recognized as expenditures in the tax balance in their actual amount on the basis of relevant
The expenditures in the tax balance shall not include:
(1)Fines and penalties paid by the tax payer;
(2)Default interests and fines for unpaid or untimely paid taxes, contributions and other
(3)Presentation expenses (feasts, presents, expenses for holidays, sport, recreation,
(4)Expenses for using and maintaining automobiles and other means of transport of
the taxpayer, as well as expenses for using rent-a-car vehicles of up to 50% of the
(5)Payments on the basis of scholarships, and
(6)Other expenses that are not in direct connection with the activities of making profit.
Article 30-l deleted
(1)Tax base for the taxpayer shall be reduced by the performed investments in tangible
assets (real estate, plants and equipment) and intangible assets (computer software and patents), for
expansion of the activities, in the amount of 30% of the performed investments, but it shall not be
higher than 50% of determined tax base for same tax period.
(2)Investments in tangible and intangible assets shall not include investments in passanger
vehicles, furniture, carpets, audio-visual devices, appliances, fine and applied art works and other
decorative objects used to equip administrative premises, except investments in passenger vehicles
related to renting vehicles (rent--cr), taxi services, vehicles for training drivers and special vehicles
(funeral, ambulance, vehicles for road assistance etc), for which the taxpayer is entitled to reduction of
the tax base in the amount of investments performed, but no higher than the amount of the determined
tax base for the same tax period.
(3) Condition for the taxpayer to realize the right to tax exemption referred to in indents 1
and 2 of this Article shall be for the taxpayer not to alienate the property within a period of three
years, starting from the year in which the investment was made.
(4) Should the taxpayer fail to prove at the end of each accounting period, that it invested
the amount of the tax base deduction for the purposes referred to in indents 1 and 2 of this Article
and that it did not alienate the property, it shall lose the right to exemption on this basis. The tax it
would have paid if it had not used this exemption shall be charged in the amount increased by the
interest stipulated for taxes not paid within the set period.
(5)Notwithstanding paragraph 1 of this Article, the taxpayer who is obliged, pursuant to
article 2 from the Law on Registering Cash Payments, to introduce and apply approved system of
equipment for registering cash payments, shall be entitled to reduction of the calculated tax for up
to ten supplied fiscal devices in the amount of its value.
(6)The taxpayer can use the tax exemption referred to paragraph 5 of this Article starting from the
first following month in the current year, when taxpayer introduced the approved system of
equipment for registering cash payments, till the end of the year in proportion with the amount of
(7)Should the taxpayer not use the tax exemption referred to in paragraph 6 of this Article taxpayer
by the end of the year, the taxpayer has a right to use it in the following period.
(8)Tax exemption referred to in paragraph 5 of this Article can be realized by the taxpayer with an
approval by public revenue authorities following the submitted written request.
(1)The taxpayer, who due to certain circumstances is not in a condition to perform book keeping, or
whose activity is made significantly difficult with this book keeping, shall be entitled to fill in a
request to the local revenue office, so that the income tax coming from his business will be paid in
lump-sum basis determined net income.
(2)The public revenue office shall decide upon the request referred to in paragraph 1 of this Article,
whether there are circumstances due to witch the taxpayer is not able to perform book keeping or
this keeping significantly burdens his business activity.
(3)When the Public Revenue Office assesses that all conditions referred to in paragraph 1 of this
Article are met, it determines the lump-sum net income of the taxpayer, regarding:
(1)place where business premises are situated;
(2)equipment of business premises;
(3)market conditions under which business is run;
(4)space of business premises;
(5)age and ability of taxpayer;
(6)size of net income of a taxpayer who runs same or similar business activity under
same or similar terms;
(7)other circumstances which affect the profit realization.
(4)The taxpayer referred to in paragraph 1 of this Article may submit a request for lump-sum net
income to the public revenue office by the end of the year which precedes the year for which
determination of the tax is made, at the latest.
(5)The right for lump-sum taxation can not be applied to:
(1)taxpayer in trade, service and commission business (except for a taxpayer who
performs small-size business activity);
(2)taxpayer who employs other persons;
(3)business with joined assets from other persons;
(4)taxpayer whose net income, in the year that is preceding the one in which the tax
assessment is being made, is higher than two average annual salaries.
(6)In the case where the public revenue office assesses that the terms, under which the taxpayer
has been granted the right for a lump-sum basis determined net income, have ceased, in the
following year it will be obligatory for him to perform book keeping.
4. Income from Property and Property Rights
Income from property and property rights shall apply to incomes earned by the taxpayer through
lease or sublease of land, residential or business premises, garages, leisure and recreational
premises, equipment, transportation vehicles and other types of property.
The taxpayer of incomes earned from property and property rights shall be a physical person that
earns an income from property and property rights.
(1)The net income shall be the base for computation of the tax, which is realized when the annual
amount of the earned income in the taxable year is reduced by the expenses for maintenance and
management, annual amortization and other expenses necessary in earning the income.
(2)The expenses referred to in paragraph 1 of this Article shall be acknowledged at 25% of the
(3)Instead of the standardized expenses referred to in paragraph 2 of this Article, the actual
expenses incurred for realizing income shall be recognized to the tax payer referred to in Article 33
of this Law, at his request, if he can substantiate the matter with documents.
(4)If property is leased, the rental fee that is paid to the lessor shall be deducted from the rental fee
paid to the taxpayer.
(5)Income from property and property rights shall include values of all duties and services to which
the lessee committed himself, that is the sub-lessor for the account of the lessor.
(1)When establishing the tax base of the income tax on property revenues realized by renting
furnished flats and offices, the wearing out of the equipment (furniture etc.) shall also be regarded
as an expense.
(2)The expenses referred to in paragraph 1 of this Article shall be recognized in the amount of up to
30% of the gross income, and if the taxpayer can substantiate with documents that he incurred
greater expenses than the standardized, his actual expenses will be recognized.
(1)If rent is paid several years in advance, the tax shall be paid annually for the number of years of
the compensated rental fee, but not exceeding 5 years.
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