The former Yugoslav Republic of Macedonia – Taxation

Candidate countries conduct negotiations with the European Union (EU) in order to prepare themselves for accession. The accession negotiations cover the adoption and implementation of European legislation (acquis) and, more specifically, the priorities identified jointly by the Commission and the candidate countries in the analytical assessment (or ‘screening’) of the EU’s political and legislativeacquis. Each year, the Commission reviews the progress made by candidates and evaluates the efforts required before their accession. This monitoring is the subject of annual reports presented to the Council and the European Parliament.

ACT

Commission Report – [COM(2011) 666 final – SEC(2011) 1203 – Not published in the Official Journal].

SUMMARY

The former Yugoslav Republic of Macedonia received the status of candidate country for accession to the European Union (EU) in 2005. The Accession Partnership, adopted by the Council in 2008, supports the country’s preparations for its future accession and the aligning of its legislation with the Community acquis. In 2008, negotiations for accession had not yet started since some progress still needed to be made with regard to the objectives and conditions defined within the framework of the Partnership.

The 2011 Report notes improvements concerning the operational capacities of the tax authority. However, improvements to combat tax fraud are required.

EUROPEAN UNION ACQUIS (according to the Commission's words)

The acquis on taxation essentially covers the area of indirect taxation, which comprises VAT (value-added tax) and excise duties. It lays down scope, definitions and principles for VAT. Excise duties on energy products, tobacco products and alcoholic beverages are regulated by EU legislation. With regard to direct taxation, the acquis covers some aspects of the taxation of individuals’ savings and corporate taxes. Furthermore, Member States are required to comply with the principles of the code of conduct relating to corporate taxes, which seeks to abolish harmful tax measures. Administrative cooperation and mutual assistance between Member States aims at ensuring the smooth running of the internal market in the field of taxation and provides instruments for preventing intra-Community fraud and tax evasion. Member States must ensure that they have the necessary implementation capacities, specifically connectivity with the EU’s IT taxation systems.

EVALUATION (according to the Commission’s words)

Limited progress can be reported in the field of harmonisation of taxation legislation with the acquis. Operational capacity for the administration of taxes continued to improve. Effective means to combat tax fraud have yet to be introduced and a code of conduct for business taxation is not yet in place.

RELATED ACTS

Commission Report [COM(2010) 660 final –SEC(2010) 1327 – Not published in the Official Journal].

In its 2010 Report, the Commission regrets the low level of harmonisation made with regard to direct and indirect taxation. However, the operational capacities of the tax authority have been strengthened.

Commission Report [COM(2009) 533 final – SEC(2009) 1334 – Not published in the Official Journal].

Commission Report [COM(2008) 674 final – SEC(2008) 2699 – Not published in the Official Journal].The November 2008 report notes progress made in terms of the administrative capacity of the Public Revenue Office. However, no improvements have been seen with regard to legislative alignment, particularly in the area of direct taxation.

See also

• The website of the Directorate-General for Enlargement, Enlargement Strategy and Progress Reports 2011

Last updated: 20.12.2011