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Input tax and the right of deduction

Input tax is the amount that reduces the Value Added Tax which is due for the performed turnover of a given tax period. That is a VAT:

  • for the turnover, which was performed to the taxpayer by another taxpayer;
  • for the advanced payment, which was performed by the taxpayer for trade and which is still not performed to him;
  • which is paid for imports of goods, and which is separately stated on the customs declaration.

Conditions for input tax deduction

Right on the input tax deduction can be realized:

  1. if the taxpayer uses the supplied or imported goods i.e. received services for the purposes of his economic activity;
  2. if the taxpayer uses supplied or imported goods or services for the investments in the building of the lessor, when the object is used to perform of economic activity of the taxpayer who is a lessee. The investments includes investments in the building made by the lessee relating to: building, reconstruction, adaptation, extensions and additions that enhance the value of the leased facility;
  3. based on the invoice which is issued in accordance with the provisions of the Law on VAT or Customs Declaration in which is separately stated the paid tax for the import or the act issued by the authority responsible for enforced collection, or compulsory enforcement and the Report for withholded VAT in the process of enforced collection or compulsory enforcement (form DDV-PNPI), when the creditor is not the acquirer of the good and the Report for calculation of VAT in a procedure for enforced collection and enforced execution (form DDV-PNPI/DS), when the creditor is the good acquirer;
  4. if such documents are evidenced in the accounting books of the taxpayer.

The right of input tax deduction arises at the moment in which all the above-mentioned conditions are met.

* The small entrepreneurs i.e. taxpayers who are not obligated to register for VAT and who are not registered voluntarily, don’t have the right for deduction of the input taxes.


© Public Revenue Office, Republic of North Macedonia