LGP North Macedonia / News / Accounting and tax treatment in 2021:

Accounting and tax treatment in 2021:

Laboratory test costs for COVID-19 paid by companies for their employees

Accounting and tax treatment in 2021:

According to the latest amendments on the Tax Procedure, the amount of cost for paid laboratory tests for COVID‐19 has increased and will have the treatment of recognized expenses for tax purposes in 2021.

According to Article 9 paragraph 1 item 21 of the Law on Profit Tax, the taxable amount of cost for paid laboratory tests for COVID‐19 for employees increases by 9,000 denars per year per employee, at "50% of the monthly average gross wage paid per employee in the previous year in the Republic of North Macedonia, i.e., up to 20,283 denars (20,283 = 40,566x50%).” 

According to Article 4 of the Law on Tax Income, the taxpayer of the profit tax is legal entity - resident in the Republic of North Macedonia who makes a profit from performing activities in the country and abroad. 

The basis for calculating the profit tax was determined as the difference between the total income and the totalexpenses of the taxpayer, in amounts resolved in accordance with the Accounting Regulations and Accounting Standards. 

Articles 9 to 15 of the Law on Tax Income regulate which expenses are considered as unrecognized expenses for tax purposes. The tax base, in accordance with Article 19, is reduced for the loss shown in the Income Statement decreased by the unrecognized expenses expressed in the tax balance.

Finally, it is important to note that amendments to the Law on Tax Income which came into force on 14 July 2021apply to the fiscal year 2021. Consequently, the taxpayers will need to submit an appropriate form "Tax balance for profit taxation" within the deadlines set by the Companies Law.