Early October. A consulting firm brings us five invoices — all dated 3 October.
"These go in the fourth quarter, right? The date says October."
We opened the specifications. Every service had been completed in September — the last one on the 30th. We put the invoices in the third quarter. The client was not thrilled: VAT they expected to pay in January had to be paid right away.
Why?
What matters is the day the work was finished
The Macedonian VAT Law does not ask when the invoice was written, but when the tax liability arose — and that is governed by Article 31. For services, the liability arises when the service is fully performed (Article 31(1)(2)). The tax period in which the VAT is reported depends on exactly that day (Article 40(1)).
So: work completed on 30 September is a third-quarter supply, even though the invoice is dated 3 October.
A tip from practice: when you invoice after the end of the month or quarter, also state the date the service was performed on the invoice or its specification. Then neither you, nor your customer, nor the tax inspector will have any doubt.
An advance? Then it's even earlier
Another client, a construction company, received a 50% advance in May for work it completed in July. "We'll account for the VAT when the job is done." Not quite.
When payment arrives before the supply, the liability arises when the money is received — for the tax contained in that amount (Article 31(2)). Since advances are normally paid VAT-inclusive, the tax is extracted from the amount: VAT = advance × 18 / 118. The balance is accounted for in July.
Rent, maintenance, subscriptions: whichever comes first
For services paid every month — rent, maintenance, accounting, subscriptions — the law looks at two dates: the invoice for the period and the payment. Whichever is earlier applies (Article 31(3)).
| Situation | When VAT arises |
|---|---|
| Service completed 30 Sep, invoiced 3 Oct | 30 Sep — third quarter |
| Advance received 10 May, work completed 15 Jul | advance 10 May, balance 15 Jul |
| October rent paid 30 Oct, invoiced 5 Nov | 30 Oct — payment came first |
| October rent invoiced 5 Nov, paid 20 Nov | 5 Nov — invoice came first |
| Project in phases, each phase separate | each phase when performed (Article 31(4)) |
And if it's in euros or dollars?
The exchange rate is neither the invoice date's nor the payment date's, but the National Bank's middle rate on the day the tax liability arises (Article 20). For the invoices above — the rate of 30 September.
Why it is worth the attention
VAT reported in the wrong period is VAT paid later than it should have been — and the law provides for interest on late payment (Article 44). So before every return we review the invoices issued after the period end and ask one simple question: when was the work finished?