North Macedonia related-party pricing and documentation for calendar year 2026.
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| Item | Amount | Tax year | Official provision |
|---|---|---|---|
| Main corporate TP revenue exclusion | Total annual revenue up to and including 300,000,000 | 2026 | [Profit Tax Law art. 12-b][cit] |
| Shortened report | Covered annual related-party transaction total not exceeding 10,000,000; otherwise full report | 2026 | [Art. 12-a(1)-(2)][cit] |
| Ownership/votes/common-ownership threshold | At least 20% | 2026 | [Art. 16(1)(1)-(2)][cit] |
| Loan/guarantee relationship | More than 20% of other's total book assets | 2026 | [Art. 16(1)(4)][cit] |
| Contractual profit relationship | At least 20% | 2026 | [Art. 16(1)(5)][cit] |
| Low-tax jurisdiction relationship test | Foreign profit-tax rate 25% below North Macedonia's rate | 2026 | [Art. 16(1)(7)][cit] |
| Arm's-length accepted range | 25th-75th percentiles; outside range use median | 2026 | [TP Rulebook art. 16(5)-(6)][tp] |
| Main-report retention | 10 years from year-end covered by report | 2026 | [Profit Tax Law art. 12-a(4)][cit] |
| Report on UJP request | Within 15 days after receipt; UJP request after 30 days from DB deadline | 2026 | [Art. 12-a(5)-(6)][cit] |
| Profit-tax effect of a taxable uplift | 10% | 2026 | [Art. 2][cit] |
Tax year: 2026. Checked against the law, tier 2. Amounts are MKD unless stated otherwise. Professional review remains outstanding.
Profit Tax Law arts. 12-16 govern related-party transactions and associated documentation. Art. 16 relationships extend beyond ownership: at least 20% capital/votes directly or indirectly; common 20% ownership/control; overlapping directors/boards; qualifying loans/guarantees exceeding 20% of the other's book assets; contractual entitlement to at least 20% profits; head-office/PE relationships; and transactions with a resident of a state whose profit-tax rate is 25% below the local rate. Family attribution applies under art. 16(2). Do not test shareholding alone.
Art. 12-b expressly excludes transactions between resident related parties and taxpayers with total annual revenue up to 300,000,000 from arts. 12 and 12-a. Thus it affects both that pricing-adjustment provision and its documentation regime, not documentation alone. It does not remove separate arts. 9(1)(7), 13-15, VAT valuations or PIT art. 27(8) sole-trader adjustments.
| Item | Amount | Tax year | Official provision |
|---|---|---|---|
| Main corporate TP revenue exclusion | Total annual revenue up to and including 300,000,000 | 2026 | Profit Tax Law art. 12-b |
| Shortened report | Covered annual related-party transaction total not exceeding 10,000,000; otherwise full report | 2026 | Art. 12-a(1)-(2) |
| Ownership/votes/common-ownership threshold | At least 20% | 2026 | Art. 16(1)(1)-(2) |
| Loan/guarantee relationship | More than 20% of other's total book assets | 2026 | Art. 16(1)(4) |
| Contractual profit relationship | At least 20% | 2026 | Art. 16(1)(5) |
| Low-tax jurisdiction relationship test | Foreign profit-tax rate 25% below North Macedonia's rate | 2026 | Art. 16(1)(7) |
| Arm's-length accepted range | 25th-75th percentiles; outside range use median | 2026 | TP Rulebook art. 16(5)-(6) |
| Main-report retention | 10 years from year-end covered by report | 2026 | Profit Tax Law art. 12-a(4) |
| Report on UJP request | Within 15 days after receipt; UJP request after 30 days from DB deadline | 2026 | Art. 12-a(5)-(6) |
| Profit-tax effect of a taxable uplift | 10% | 2026 | Art. 2 |
The 10 million test chooses report format after establishing that arts. 12/12-a apply. A shortened report is not a price safe harbour. Record total revenue and the annual transaction aggregate separately and test exact boundaries.
For an in-scope transaction, art. 12 adds the positive difference between booked expense and arm's-length expense, or arm's-length revenue and booked revenue. Calculate each transaction category without creating an automatic downward adjustment or netting excess revenue against another category's excessive expense. Controlled transactions include tangible/intangible property, financing, services, royalties, shares, derivatives and other profit-affecting dealings.
Method selection: choose the most appropriate method per transaction category under art. 12(4)-(5), supported by Rulebook arts. 14-24.
(sales - acquisition cost) / sales (art. 19).(sales - cost) / cost (arts. 20-21).Use internal or public external comparables; document product/service characteristics, contracts, market conditions, strategy, risks and functions. Make reasonable reliable comparability adjustments where needed (arts. 16-17). Derive the 25th-75th percentile range; if the tested result is outside it, the rulebook uses the median. The examples assume benchmark statistics have already been properly established; no illustrative margin is a statutory safe harbour.
Financing: apply art. 13 independently of the art. 12-b exclusions: excessive related-party borrowing interest is disallowed and lending interest is brought to at least the comparable independent rate at origination, based on domestic/international financial-market evidence. Profit Rulebook art. 4 independently prescribes matching-maturity EURIBOR (FX) or SKIBOR (MKD) plus one percentage point when the unrelated-party origination-rate evidence is absent: a borrowing deduction ceiling and a lending-income floor. This is the corporate rulebook rule, not the PIT provision imported by analogy. Related-party default interest is disallowed under art. 14. Separately test art. 15's 20% nonresident shareholder and three-times-equity thin-capitalisation rule, including covered guarantees, its first-three-operating-years exception and financial-shareholder exception. Do not disallow the same amount twice; reconcile statutory grounds to a single adjustment ledger.
Sole traders: PIT art. 27(7)-(8) has its own excessive interest and nonmarket related-party adjustment. It prescribes comparable domestic/foreign market prices, or cost plus ordinary profit if that comparison is not possible. For loan interest, art. 27(7) uses comparable commercial-bank credit evidence; if that is not substantiated, deduction is capped at matching-maturity EURIBOR for foreign-currency loans or SKIBOR for MKD loans plus one percentage point. Obtain the actual benchmark and period calculation, not a hard-coded rate. Do not import the 300 million corporate exclusion into PIT.
Documentation: Rulebook arts. 2-12 full report contains master file, local file and annexes. Include ownership and location, group business/value chain, intangibles and financing, financial/tax positions, local management/activity, transaction descriptions and agreements, amounts/counterparties, functional/risk analysis, selected method, comparables/search, calculations and reconciliation to annual accounts. Annex group/local financial statements, relevant contracts, pricing agreements/rulings and benchmark evidence. Art. 13 shortened report identifies each transaction category, value and related counterparty. Maintain evidence supporting the tax-return figure even when the shortened form applies.
Prepare and keep the report for the covered tax year. Profit Tax Law art. 39(5) requires P/TC related-transaction information with the DB return where TP-report obligations apply. DB follows the annual-account deadline: end of February next year or 15 March where the annual account is filed electronically (UJP filing instructions). Apply the nonworking-day rule. For 2026 activity, filing is in 2027; the cited 2026 announcement is evidence of the recurring rule, not a special 2027 extension.
The current art. 12-a is a prepare-and-retain / on-request regime. Do not use a superseded blanket 30 September annual report-submission date. UJP can request the report after 30 days from the DB deadline; respond within 15 days of receipt. Retain for ten years from covered year-end. The annual corporate balance is due within 30 days after the annual-account deadline under art. 41; include the TP adjustment in that calculation, rather than treating report delivery as a tax-payment extension. Company cessation/reorganisation does not erase the records or adjustment for the final period.
Profit Tax Law art. 46 failure to retain/deliver reports or submit the form on time attracts legal-person ranges micro EUR 300-1,000, small 600-2,000, medium 1,800-6,000, large 3,000-10,000, in MKD equivalent; responsible-person ranges respectively EUR 50-250, 100-500, 150-500, 200-500. Art. 43 separately covers inaccurate data reducing the base, with higher company ranges EUR 600-2,000, 1,200-4,000, 3,600-12,000, 6,000-20,000. Tax Procedure Law art. 123 interest is 0.03% daily from the day after the underlying tax matured. Do not confuse an adjustment, a fine and interest.
A cross-border transaction does not by itself establish related status; apply art. 16. Conversely the low-tax relationship test can capture dealings without a shareholding link. Check treaty associated-enterprise, corresponding-adjustment and mutual-agreement articles before seeking bilateral relief; this skill does not grant an automatic foreign corresponding deduction. WHT and VAT apply separately to the same fee/royalty/interest. Preserve the treaty version and application dates using the cross-border skill; an arm's-length result alone does not establish a treaty exemption.
Simple: excessive purchase price. A company above the 300 million revenue exclusion buys 100 units from a foreign related party at 1,200 each. A properly established comparable independent price is 1,000. Art. 12 disallows 20,000 expense; incremental tax is 2,000 at 10%. Assumed prices are facts of the illustration, not official price benchmarks.
name: MK 2026 CUP expense adjustment
inputs:
units: 100
actual_price: 1200
comparable_price: 1000
steps:
- actual_cost: units * actual_price
- allowable_cost: units * comparable_price
- adjustment: max(0, actual_cost - allowable_cost)
- extra_tax: adjustment * 0.10
expected:
actual_cost: 120000
allowable_cost: 100000
adjustment: 20000
extra_tax: 2000
Edge: cost-plus result outside the accepted range. The same in-scope status is assumed. Eligible costs are 800,000 and actual related-party service revenue 816,000, a 2% markup. The evidenced comparable interquartile range is 5%-9%, with median 7%. Outside the range, Rulebook art. 16 uses the median: arm's-length revenue 856,000, uplift 40,000 and extra tax 4,000. The 7% is hypothetical benchmark evidence, not a legal safe harbour.
name: MK 2026 outside range median adjustment
inputs:
costs: 800000
actual_revenue: 816000
median_markup: 0.07
steps:
- actual_markup: (actual_revenue - costs) / costs
- benchmark_revenue: costs * (1 + median_markup)
- adjustment: max(0, benchmark_revenue - actual_revenue)
- extra_tax: adjustment * 0.10
expected:
actual_markup: 0.02
benchmark_revenue: 856000
adjustment: 40000
extra_tax: 4000
Not yet confirmed: None within the stated scope.
Contributed by Michael Cutajar.
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