Corporate tax reform in Republic of Macedonia

Gruevski, Ilija (2012) Corporate tax reform in Republic of Macedonia. Conference Proceedings-1st International Conference South-East European Countries toward European Integration 20th October 2012 Elbasan – Albania. ISSN 2221-5956

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The Direct Tax System in the Republic of Macedonia has always been subject of continuous reforms and additional improvements in order to achieve primary tax policy goals for simplicity and efficiency, especially in the period after the country became a candidate for membership in The European Union. The efficiency principle usually demands a tax structure with lower statutory tax rates and therefore, lower effective corporate tax burden that will not distort the investment decision. On the other hand, the simplicity principle requires a structure with less tax items and tax brackets, as well as lower administrative and compliance costs. From this perspective, tax authorities in Republic of Macedonia have made great efforts to restructure and redesign The Corporate Income Tax System and ultimately produced some simple and interesting solutions. Therefore, the goal of this article is to describe the Corporate Income Tax System in the RM as well as the recent reform trends that included: introducing flat tax rates in direct taxing, implementing the Tax on Gross Revenues for small enterprises, restructuring the Corporate Tax Incentive System etc. Except the description, the intention is to evaluate the effect of these tax code derogations by using some of the reliable effective tax burden measures such as the marginal effective tax rates – METR, and its components. The basic research method used in this article is the descriptive method. The rest of the methodology is consisted of: the comparative method, the empirical method, and the method of the METR. After reviewing the article, readers will have an illustration of the concept of the Macedonian Corporate Tax System and its recent trends and solutions that made it more effective over time. Therefore, it is highly recommended for researchers in the field of comparative tax studies, tax officials, investors as well as any other interested parties. Key words: tax rate, tax base, tax entities, tax burden, dividends, capital gains, etc. JEL Classification at H25

Item Type: Article
Subjects: Social Sciences > Economics and business
Divisions: Faculty of Economics
Depositing User: Ilija Gruevski
Date Deposited: 29 Jan 2013 09:13
Last Modified: 29 Jan 2013 09:13

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