NORTH MACEDONIA Trends and Developments Contributed by: Ana Tosic Chubrinovski, Ivica Jevtic, Ljupka Naumoska Gjorgjievska and Marija Boceska, JPM Partners North Macedonia
Tax Environment, Fiscal Predictability and Investor Modelling The fiscal regime applicable to mining activities in the Republic of North Macedonia is based on a relatively stable and internationally competitive tax framework. It is regulated through a number of key statutes that provide clear rules for calculating fiscal obligations and a high degree of predictability for investors. The core corporate tax regime is governed by the Corpo - rate Income Tax Law, which imposes a flat 10% rate on taxable profit and sets out clearly defined rules on the tax base, depreciation, deductibility of expenses, transfer pricing and related-party transactions. This 10% rate is among the lowest in Europe and has remained stable over an extended period. As a result, North Macedonia’s corporate tax system is consid - ered highly competitive by European standards, which has a direct positive impact on the financial modelling of capital-intensive industries such as mining. Addi - tional sector-specific fiscal burdens are regulated by the Law on Mineral Resources, which prescribes concession fees on exploitation, the method for their calculation and the model for their allocation between the central budget and local self-government units. This decentralised approach facilitates direct funding of municipal infrastructure and development projects in communities where mining activities are carried out and represents an important element in maintaining the social licence to operate. Parafiscal charges are regulated across several instru - ments, including the Law on Waters, which sets fees for water usage in technological processes, and the Law on Environmental Protection, which imposes obli - gations related to land degradation, waste manage - ment and environmental levies. From the perspective of local charges, the Law on Financing of Local Self- Government Units is also of relevance, as it provides the legal basis for transferring a portion of conces - sion revenues to municipal budgets. For foreign inves - tors, it is particularly important that Republic of North Macedonia has developed a network of more than 50 double-taxation treaties with EU member states, the United Kingdom, Turkey, neighbouring countries and other key investment jurisdictions.
These treaties enable the optimisation of global tax structures, elimination of economic double taxation and enhancement of effective returns on invested capital. Within the current reform framework, the country has expressed a clear commitment to codi - fying and increasing the transparency of sectoral charges by tying their formulas to objective param - eters and introducing mandatory public consultations for any future change that could significantly affect the investment climate. This approach reduces the risk of unexpected or retroactive interventions in the fiscal regime and enhances legal predictability. In practice, this allows investors to develop long- term financial models with a high degree of certainty regarding tax parameters, which is critical for valu - ing mining concessions, structuring project finance and implementing international partnerships within the broader energy and raw materials transition. The Republic of North Macedonia has traditionally main - tained a competitive corporate tax rate and a relatively straightforward corporate tax system, which consti - tutes a notable advantage compared with more com - plex Western European jurisdictions. In combination with concession fees and other sectoral levies, this creates a fiscal regime that is predictable, transpar - ent and relatively easy to incorporate into financial projections. Mining operators do face additional parafiscal charg - es, including concession fees, water-use charges, land-degradation fees and other local or sector-spe - cific obligations. As part of the reform process, the state is working to codify these obligations, link them to clear and transparent formulas and introduce a requirement that any modification be subject to pub - lic consultation and assessment of impacts on the investment climate. In practical terms, investors are thus able to model multi-year financial projections with a higher degree of certainty, and although the fiscal regime is always subject to potential change, clear methodologies and public debate significantly reduce the likelihood of retroactive measures. Balancing Central Revenues, Local Interests and Long-Term Sustainability Modern approaches to valuing the mining sector increasingly emphasise the broader concept of fis -
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