A small IT company, two developers. All year they work for one client in Germany — MKD 5 million so far. They also maintain systems for two domestic companies, about MKD 1.4 million. In October they landed their first bigger domestic job: an online shop for a Skopje retailer, MKD 700,000.
Before invoicing it, they asked us: "With 5 million we passed the threshold long ago. Should we have been VAT-registered since spring?"
They should not. But now they must.
The threshold does not count all turnover
VAT registration is mandatory when total turnover in a calendar year exceeds MKD 2,000,000 (Article 51(1)). The law also says what total turnover is: turnover that is taxable under Article 2, point 1 (Article 51(2)). That is the supply of goods and services made in the country (Article 2, point 1).
Where a service is supplied does not depend on where the developers sit. When the service is supplied to another taxable person, the place of supply is where the recipient has its seat (Article 14(2)). The German company is in Germany — so the service is supplied in Germany. It is not domestic turnover and does not count towards the threshold, however large it is.
The Public Revenue Office (UJP) has confirmed this for MKD 3 million of IT services to foreign companies (opinion of 28 October 2024) and for marketing consulting to companies in Serbia and Hungary (10 December 2024): no obligation to register, regardless of the amount.
The rule: only services supplied in the country count towards the MKD 2,000,000 threshold. Services to foreign companies do not count — not 5 million, not 50 million.
What counts
| Turnover in 2026 | Amount | Counts? |
|---|---|---|
| Services for the German client | MKD 5,000,000 | No (Art. 14(2)) |
| Maintenance for two domestic companies, Jan–Sep | MKD 1,400,000 | Yes |
| Online shop for a domestic retailer, October | MKD 700,000 | Yes |
| Total turnover for the threshold | MKD 2,100,000 |
Without the October job the company would have stayed below the threshold. With it, it went over.
Watch out for one trap: exports of goods do count. The place of supply of goods is where transport begins (Article 13(1)(2)), i.e. in North Macedonia. Exports are VAT-exempt, but with the right to deduct (Article 24(1)(1)), and the threshold leaves out only turnover exempt without the right to deduct (Article 51(2)). A company selling goods to Germany has to register like any other.
When and by when
If the threshold is exceeded during the year, registration applies from the end of the month in which it was exceeded (Article 51(7)), and the application is filed by the 15th of the following month (Article 51(11)). The threshold was exceeded in October — the application is due by 15 November.
From registration onwards, domestic invoices carry VAT. The German client still receives invoices without Macedonian VAT — the place of supply is still Germany.
Registration lasts at least three calendar years, however low turnover is afterwards (Article 51(8)). One domestic job of MKD 700,000 means VAT returns for at least three years — even when domestic turnover drops again.
What to check in your company
If you work for foreign clients, add up only domestic invoices and exports of goods since 1 January — without the foreign services. If the total has passed MKD 2,000,000, find the month — the application is due by the 15th of the next one. If you are close to the threshold, do the maths before accepting the next domestic job.
One more thing: not being VAT-registered does not exempt you from VAT on services you buy from abroad — Google, Microsoft, hosting. That is another story.