North Macedonia to abolish VAT exemption on Low-Value Online Imports — aligning with EU and global E-Commerce tax reforms
North Macedonia is moving to tighten its value added tax (VAT) rules for goods purchased online from abroad, targeting the rapidly expanding cross-border e-commerce market. The government’s proposal to remove the long-standing VAT exemption for small-value parcels marks a significant shift in the country’s approach to digital trade and customs administration.
The draft amendment, published on 9 October 2025, is now before Parliament and expected to be voted on in November 2025. If enacted, it will bring the treatment of low-value imports in line with international VAT practices — particularly the European Union’s e-commerce package 2021 reform, which eliminated similar VAT-free thresholds across Member States.
Current rules and proposed ending VAT loophole
Under existing legislation, parcels imported into North Macedonia are subject to a tiered system of VAT and customs treatment:
-
Goods valued up to EUR 22 are exempt from both VAT and customs duties.
-
Goods valued between EUR 22 and EUR 45 are exempt from customs duties but subject to VAT.
-
Goods valued above EUR 45 attract both VAT and customs duties.
The new proposal eliminates the VAT exemption for commercial imports up to EUR 22, meaning that every commercial parcel entering North Macedonia will be taxed, regardless of its value.
The exemption will, however, remain in place for private, non-commercial shipments — items sent by one individual to another — provided the total value does not exceed EUR 22, the items are not intended for resale, and they do not include perfumes, alcohol, or tobacco products.
The legal foundation for this change is the proposed revocation of Article 26-a of the VAT Law, which currently provides the exemption for low-value commercial imports.
Why Is the VAT Exemption Being Removed?
The reform is largely a response to the rapid growth in cross-border e-commerce, particularly from large Asian marketplaces such as Temu, AliExpress, and Shein. These platforms have seen a sharp increase in sales to Macedonian consumers by taking advantage of the small-value VAT exemption.
As a result, local retailers have faced unfair competition, since imported goods were arriving VAT-free while domestic businesses were required to charge the full 18% VAT rate. The Finance Ministry has also highlighted the loss of tax revenue from these transactions and the growing complexity for customs officials tasked with policing the low-value exemption.
The government now aims to create a level playing field for local and foreign sellers while reinforcing customs oversight on imported goods. Officials also note that the reform will improve transparency and traceability in the import process — particularly as parcel volumes continue to surge.
How the Reform Will Work in Practice
Once enacted, all commercial shipments sent to recipients in North Macedonia will be declared and taxed for VAT, regardless of their declared value.
Customs brokers and logistics operators — who previously processed small consignments without tax — will now be responsible for ensuring VAT is collected at importation or remitted through authorised channels. Businesses importing goods for resale will need to account for VAT in their normal returns, while private individuals purchasing from online platforms will likely see the tax included in the checkout price or collected at customs.
The customs administration is expected to issue guidelines and system updates to manage the additional volume of VAT declarations, including simplified electronic procedures for parcel operators and postal carriers.
E-commerce platforms and logistics providers take on VAT obligations
The proposed reform has wide-reaching implications for multiple stakeholders:
-
Foreign E-Commerce Platforms: Online retailers shipping low-value goods to Macedonian customers will need to update pricing, logistics, and VAT collection systems to ensure compliance. Those operating through online marketplaces may need to register for VAT locally or appoint intermediaries.
-
Macedonian Consumers: Shoppers who frequently order inexpensive items from abroad — such as small electronics, clothing, and accessories — will see higher final prices as VAT is added to the total cost. Delivery times could also lengthen slightly as customs apply VAT controls to all parcels.
-
Customs and Logistics Providers: Courier companies, postal operators, and customs agents will need to revise import workflows and enhance data-sharing with tax authorities to manage VAT assessment and payment on a much larger number of parcels.
-
Local Retailers: Domestic businesses are likely to welcome the reform, as it removes an uneven advantage for foreign sellers and could redirect some consumer spending back to the local market.
Aligning with global and regional trends
North Macedonia’s proposal follows a broader global movement to ensure VAT neutrality between domestic and cross-border e-commerce. The European Union eliminated its own low-value import exemption in July 2021, and other jurisdictions — including the United Kingdom, Norway, and Australia — have introduced similar measures in recent years.
By harmonising its approach, North Macedonia aims to modernise its VAT regime, strengthen its fiscal base, and reduce opportunities for undervaluation or misdeclaration at customs. The move also aligns with ongoing efforts to digitise customs clearance and tax collection, paving the way for future reforms such as electronic invoicing and real-time import monitoring.
