The newly adopted (June 27, 2019) and published (Official Gazette No.133/28-06-2019) Law on Partial VAT Refund to Physical Persons has been met with both enthusiasm and a myriad of questions from individuals. The Law – for the first time in the sovereign history of the Republic – prescribes the right of individuals to request a 15% refund of the VAT paid in fiscal receipts issued to them.
Eligible fiscal receipts exclude those issued to legal entities, sole proprietors, self-employed individuals or physical persons who are registered as VAT taxpayers. Excluded from the scope of receipts are also fiscal bills for utility expenses (delivery of electricity, heating & cooling, telephone services and water supply).
In order to be eligible for a 15% paid VAT refund, an individual must be over the age of 15 and in possession of a valid ID. The VAT refund application uses the existing platform of the electronic personal income tax system (EPDD) so registration on it is required. The tax office has created a phone app which is used for scanning fiscal receipts and their automatic entry into the system.
It is worth noting that refunds will be transferred to the declared individual's bank account on a quarterly basis, within 60 days of the end of the quarter. Yet another important thing to keep in mind is that only fiscal receipts in amount up to MKD 30,000 (about EUR 500) will be accepted by the system.
Despite the relatively low limit amount of the VAT which can be refunded (maximum MKD 1,800 – about EUR 30 – per quarter per person), individuals have welcomed this opportunity for the refund which has until now been reserved only for legal entities. It is expected that the biggest advantage of the new Law will be the increased fiscal discipline, with customers more frequently requesting fiscal receipts from traders, therefore discouraging the grey market.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.