Theoretical and practical aspects of value added tax in the Republic of Macedonia
Theoretical and practical aspects of value added tax in the Republic of Macedonia

Summary/Abstract: The meaning of taxes for the state and the state budget has never lost its importance despite many political and socio-economic changes that have occurred throughout history since the beginning of taxation. Taxes in a state play a very important role in its existence and operation, whereby the phenomenon itself is an important research topic. National tax systems and tax policies of countries covering a range of taxes and other revenues that fill the state budget are a necessary element of the process of existence, growth and progress of the state. Undoubtedly, scholars and practitioners are unanimous about the importance of sales tax or value added tax as an invaluable element of the process of the circular movement of income tax and charging the public treasury. Macedonia has a well-developed system and tax policy on VAT which includes primary and secondary legislation, relevant professional institutions and mechanism that facilitates its recovery, which reduces the possibility of tax evasion. Republic of Macedonia has had successful tax reforms in terms of value added tax on its way to European integration, and has implemented a model that is fully compatible with the pattern of VAT in the European Union. Macedonia has a policy of lower tax rate of VAT compared to rates in surrounding countries, making it a favorable country for foreign investments. In the remaining part of this work there is a more detailed elaboration on the basic features of VAT in the country as a suitable basis for further comparison with VAT in the surrounding countries and the European Union.

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