Financial Glossary
All tax, invoicing and business terms for North Macedonia — simply explained, with examples.
VAT (Value Added Tax)
VAT (Value Added Tax) is an indirect tax charged at every stage of production and distribution of goods and services. In…
e-Invoice (e-Faktura)
e-Faktura is an electronic invoice issuing and receiving system managed by the Public Revenue Office (UJP). From October…
Invoice
An invoice is a business document issued by the seller to the buyer for services rendered or goods delivered. It is a ta…
Credit Note
A credit note is a document by which the seller reduces the buyer's obligation. Issued for complaints, returns, invoicin…
Proforma Invoice
A proforma invoice is a document that looks like an invoice but has no tax validity. Used for advance payments, quotes o…
EDB (Unique Tax Number)
EDB is a unique 13-digit tax number identifying every taxpayer in North Macedonia. Issued by the Public Revenue Office (…
EMBS (Unique Registration Number)
EMBS is a unique 7-digit registration number identifying every business entity registered in the Central Registry.…
DOOEL (Single-member LLC)
DOOEL is a legal form of a commercial company with one founder. The founder's liability is limited to the capital contri…
DOO (Limited Liability Company)
DOO is a commercial company with two or more partners. Each partner's liability is limited to their capital contribution…
Quote (Quotation)
A quote is a business document offering services or goods to a potential client. Not legally binding until accepted.…
UBL XML
UBL (Universal Business Language) XML is a standardized format for electronic business documents. Version 2.1 is used fo…
Corporate Income Tax (CIT)
Corporate income tax is a direct tax on the net profit of legal entities. The rate is 10% (1% for micro businesses).…
Fiscal Receipt
A fiscal receipt is a document issued by a fiscal device recording a cash transaction. Mandatory for every B2C sale.…
Social Contributions
Social contributions are mandatory payments for pension insurance (18.8%), health (7.5%) and unemployment (1.2%), totali…
VAT Return (DDV-04)
The VAT return (form DDV-04) is a mandatory tax form through which VAT-registered businesses report input and output VAT…
Reduced VAT Rate (5%)
The reduced 5% VAT rate applies to certain goods and services deemed basic necessities. The standard rate is 18%, but th…
Debit Note
A debit note is a document by which the seller increases the buyer's obligation. Issued when the invoiced amount is too …
Reversal Invoice (Storno)
A reversal invoice is a document that completely cancels a previously issued invoice. Unlike a credit note (which is a p…
Accounting (Bookkeeping)
Accounting is the systematic recording, classifying and summarizing of business financial transactions. In North Macedon…
Balance Sheet
A balance sheet is a financial statement showing the assets, liabilities and equity of a business at a specific date. Th…
Income Statement (P&L)
The income statement (P&L) is a financial report showing the business's revenue and expenses for a period (usually a yea…
Revenue (Income)
Revenue is the total amount of money or receivables a business earns from selling goods, providing services, or other bu…
Expense (Cost)
An expense is any cost the business incurs to generate revenue — from salaries and rent to materials and depreciation. E…
Depreciation (Amortization)
Depreciation is the systematic allocation of a long-term asset's purchase cost (equipment, vehicles, software) over its …
Cash Flow
Cash flow is the movement of money in and out of a business. Positive flow means more money coming in than going out — a…
General Ledger
The general ledger is the central bookkeeping record where all business financial transactions are recorded, organized b…
Accounts Receivable (AR)
Accounts receivable are amounts that clients owe your business for delivered goods or services for which an invoice has …
Accounts Payable (AP)
Accounts payable are amounts your business owes to suppliers for received goods or services for which an invoice has bee…
Inventory (Stock)
Inventory refers to goods, raw materials and finished products a business holds for sale or use in production. They are …
Personal Income Tax (PIT)
Personal income tax is a tax on individual income — salaries, fees, dividends, property income and capital gains. The ra…
Net and Gross Salary
Gross salary is the total salary amount before deductions. Net salary is what the employee receives in their account — a…
Annual Financial Statements
Annual financial statements are the set of financial reports every commercial company must prepare and file for each fis…
Revenue & Expense Ledger
The revenue & expense ledger is a simplified accounting record for small businesses and self-employed who are not requir…
Profit and Loss
Profit is the positive difference between business revenue and expenses, while loss is the negative difference. Net prof…
Delivery Note (Dispatch Note)
A delivery note is a document accompanying goods during transport from seller to buyer. It confirms goods were dispatche…
Purchase Order (PO)
A purchase order is a business document sent by the buyer to the supplier formally requesting delivery of specific goods…
Service Agreement (Contract)
A service agreement is a legal document defining the terms under which one party (provider) performs services for anothe…
Advance Payment (Prepayment)
An advance payment is a partial or full payment before service delivery or goods dispatch. In North Macedonia, receiving…
Payment Terms (Due Date)
Payment terms define the period within which the buyer must pay the invoice. Stated on every invoice, they can be agreed…
Late Payment Interest (Penalty Interest)
Late payment interest is a legal penalty for delayed payment of a monetary obligation. Automatically calculated from the…
Digital Signature (XAdES)
A digital signature is a cryptographic mechanism verifying the authenticity and integrity of an electronic document. For…
QR Payment Code
A QR payment code is a matrix barcode on the invoice containing all payment data (IBAN, amount, reference). The client s…
Bank Statement
A bank statement is a document from the bank showing all transactions (credits and debits) on the business account for a…
Business Bank Account (Transaction Account)
A business (transaction) account is a bank account through which a legal entity makes all business payments and receives…
Exchange Rate (FX Rate)
The exchange rate is the ratio of the Macedonian denar (MKD) value to a foreign currency. For businesses invoicing in EU…
Dividend
A dividend is a portion of the company's net profit paid to owners (partners/shareholders). In MK, dividends are subject…
Withholding Tax
Withholding tax is a tax withheld when making payments to non-resident companies/individuals. The payer (Macedonian comp…
Offset (Netting / Compensation)
Offset is a method of extinguishing mutual obligations when two parties owe each other. Instead of paying separately, am…
Assignment of Receivables (Cession)
Cession is a legal act by which a creditor (assignor) transfers their receivable to a third party (assignee). The debtor…
Invoicing Abroad (Cross-border)
Invoicing abroad means issuing invoices to clients/companies outside North Macedonia. For B2B services to EU/foreign cli…
Loan (Credit)
A loan is a financial product where a bank lends funds to a business with the obligation to repay in installments with i…
Leasing (Financial Lease)
Leasing is financing the acquisition of assets (vehicles, equipment, property) where the user pays monthly installments …
Bank Guarantee
A bank guarantee is an instrument by which the bank guarantees it will fulfill the client's obligation to a third party …
Factoring (Invoice Financing)
Factoring is a financial service where a business sells its unpaid invoices to a factoring company (factor) at a discoun…
IBAN (International Bank Account Number)
IBAN (International Bank Account Number) is a standardized international format for bank accounts. In Macedonia, IBAN ha…
SWIFT/BIC Code
A SWIFT/BIC code is a unique identifier for a bank in the international payment system. Required for receiving and sendi…
Foreign Currency Account
A foreign currency account is a bank account in a foreign currency (usually EUR, USD) linked to your business denar acco…
VAT Registration
VAT registration is the process by which a business registers as a VAT payer with UJP, with the right and obligation to …
Property Tax
Property tax is a local tax paid on the value of real estate (business premises, warehouses, land) owned by a business o…
Accounting Service (Bookkeeper)
An accounting service is a firm or individual maintaining a business's accounting books — recording documents, preparing…
Liquidity
Liquidity is a business's ability to meet current financial obligations (salaries, suppliers, taxes) on time with availa…
Solvency
Solvency is a business's ability to cover all obligations long-term — both current and long-term. Unlike liquidity (shor…
Subsidies and Grants
Subsidies and grants are non-repayable financial funds businesses receive from the state, funds or international program…
Tax Balance (Tax Return)
The tax balance is a report calculating the tax base for corporate income tax. It starts from accounting profit, then ad…
e-Tax Portal (UJP Online)
e-Tax is an online portal of the Public Revenue Office (UJP) through which businesses electronically file tax returns, t…
MPIN (Monthly Salary Report)
MPIN (Monthly Integrated Collection Report) is a mandatory form submitted monthly by the employer to UJP for calculated …
Transfer Pricing
Transfer prices are prices at which transactions occur between related parties (parent-subsidiary companies, companies w…
Tax Audit (Tax Inspection)
A tax audit is a UJP procedure checking whether a business correctly calculated and paid taxes and contributions. It can…
VAT Refund (Reimbursement)
A VAT refund occurs when input VAT (paid on purchases) exceeds output VAT (charged on sales) in a tax period. The differ…
Customs Duty (Import Duties)
Customs duty is a charge paid when importing goods to North Macedonia. The rate depends on the type of goods and country…
Excise Duty
Excise duty is an indirect tax paid on the production or import of certain goods — petroleum products, alcoholic beverag…
Tax Relief (Tax Exemption)
A tax relief is a legal provision reducing or eliminating a business's tax obligation. The goal is to encourage investme…
Bankruptcy (Insolvency)
Bankruptcy is a court procedure initiated when a business cannot meet its obligations. The goal is orderly settlement of…
Liquidation (Company Closure)
Liquidation is a voluntary procedure for closing a business when the company is solvent (can pay all obligations). Unlik…
Auditor (External Audit)
An external audit is an independent review of a business's financial statements by an authorized auditor. The goal is to…
Companies Law (Commercial Companies Act)
The Companies Law is the primary law regulating the formation, management and termination of commercial companies (DOOEL…
E-Commerce (Online Sales)
E-commerce is the sale of goods or services via the internet. In MK, online sellers have the same tax obligations as phy…
Freelancer (Self-employed / Sole Proprietor)
A freelancer (self-employed) is an individual independently performing professional activities — programming, design, co…
Capital Gains Tax
Capital gains are profits realized from selling shares, stakes, real estate or other property at a price higher than the…
VAT Law (VAT Act)
The VAT Law is the main legal act regulating value-added tax in North Macedonia. It determines: who is a taxpayer, rates…