What is the Expense reimburement policy in North Macedonia?

This article explains how employees can request reimbursement for business‑related expenses in North Macedonia, including travel, mileage, per diems, documentation requirements, and tax treatment. Proper approval and documentation are essential to ensure reimbursements remain non‑taxable.

1. Travel & Mileage (Private Vehicle Use)

Mileage Reimbursement

North Macedonia does not have a statutory per‑kilometre mileage reimbursement rate.

Employers typically use one of the following compliant approaches:

1. Reimbursement of actual fuel costs, supported by receipts, or
2. A company‑defined per‑km rate, which is generally treated as taxable income unless the employee can fully document the actual business costs incurred.

Mileage Log Requirement

When a personal vehicle is used, employees must submit a mileage log including:

• Date of travel
• Start and end location
• Odometer readings (start and end)
• Total kilometres travelled
• Business purpose

Mileage must reflect actual business travel only.
Daily commuting (home ↔ regular workplace) is not reimbursable tax‑free.

2. Parking, Tolls & Road Charges

• Parking fees, tolls, and similar road charges must be claimed as separate expenses
• Original receipts are required
• These costs are not included in any mileage reimbursement

Expenses without receipts may be rejected or treated as taxable salary.

3. Business Travel Rules & Limits

• There are no statutory caps on total travel days or amounts
• All travel must be:
  • Business‑related
  • Necessary and reasonable
  • Approved in writing before travel

Important

While there are no caps on travel costs, per diem allowances are subject to government‑defined maximums (see Section 7).

4. Transportation & Accommodation

All transportation and accommodation expenses must be supported by original tickets or invoices.

Transportation

• Bus, train, flight, taxi: original ticket or receipt required
• Rental car:
  • Rental agreement
  • Fuel receipts
  • Parking/toll receipts

Only the business‑use portion of rental or fuel costs is reimbursable tax‑free.

Accommodation

• Hotel invoice required
• Must clearly relate to business travel dates and purpose

5. Invoicing & Documentation Requirements

For an expense to be reimbursed tax‑free, employees must submit an original invoice or fiscal receipt (“fiskalna smetka”) including:

• Vendor name
• Vendor tax ID (ЕМБС / ЕДБ)
• Date
• Description of goods or services
• Amount and VAT
• Business purpose

For travel expenses, the claim must also include:

• Destination
• Date(s) of travel
• Reason for travel
• Travel approval form (if required)

Every expense must have a fiscal receipt to be treated as non‑taxable.

6. Common Non‑Taxable Reimbursable Expenses

With proper documentation and approval, the following are generally non‑taxable:

• Transportation (bus, train, flight, taxi, rental car)
• Fuel for business use (with receipts)
• Accommodation (hotel invoice)
• Business meals with clients
• Parking and tolls
• Work‑related supplies and materials
• Visa fees and travel insurance
• Per diems within official limits

7. Per Diems (Daily Allowances)

Per diems are tax‑free only up to government‑defined limits, as set by the Government Decision on Official Per Diem Amounts.

Official Per Diem Rates (2025)

Domestic Travel

• 1,000 MKD per day (maximum tax‑free amount)

International Travel (examples):

• Serbia: 35 EUR/day
• EU countries: 50 EUR/day
• United States: 70 EUR/day

Amounts above these limits are treated as taxable income.

Important Rules

• Per diems cover meals and incidental expenses
• Per diems cannot be combined with meal receipts for the same day (no double‑claiming)

8. Business Entertainment & Gifts

Business Entertainment

Reimbursable when:

• Clearly business‑related
• Reasonable in amount
• Supported by receipts

Documentation must include:

• Names of participants
• Business purpose
• Receipt or invoice

Lavish or personal‑benefit expenses may be treated as taxable income.

Gifts

• Must be reasonable and business‑related
• High‑value or personal gifts may be taxable or rejected

9. Non‑Reimbursable or Taxable Personal Expenses

The following are generally taxable benefits and not reimbursable tax‑free:

• Gym memberships
• Yoga or fitness classes
• Swimming or wellness services
• Therapy or personal medical expenses

Exceptions may apply only when:

• Required strictly for work, or
• Mandated by health and safety regulations (rare)

10. VAT & Recordkeeping

VAT

• Standard VAT rate: 18%
• Reduced VAT rate: 5% for certain goods and services

VAT treatment follows standard North Macedonian VAT rules.

Record Retention

• All expense documentation must be retained for at least 5 years
• Payroll and Finance verify:
  • Mileage and per‑diem compliance
  • Documentation completeness

If requirements are not met, reimbursements may be treated as taxable salary.

11. Submission Deadlines & Compliance

• Expenses should be submitted within 30 days of travel or purchase (common employer practice)
• Late or incomplete submissions may be:
  • Rejected, or
  • Reclassified as taxable income