ANALYSIS
Latest Legal Changes
This summer, Macedonian parliament adopted a number
of legal changes that could have significant impact on
businesses working here. The changes relate to misdemeanor fines, the efficiency of public services and the
cancellation of a very unpopular measure that had been
in force just 8 months.
recommendations from the World Bank’s Doing Business
Report. The changes include a requirement that all State
institutions respond more quickly to requests from
companies involved in court proceedings, to allow them
to build their case with evidence held by State institutions, including courts.
Misdemeanor Law
Law on the General Administrative
Procedure
Though the proposed changes to the Misdemeanor Law
entered parliament in June 2014, they weren’t adopted
until a year later, in July 2015 in response to criticism
that severe misdemeanor fines were partially to blame
for the failure of local businesses.
According to the changes, business fines would be
adjusted according to the following formula:
10-70% of mandated fine depending on
previous year’s annual revenue
+
5-20% of mandated fine depending on the #
of employees
+
10% of the mandated fine if not the
company’s first offense
=
Amount of fine to be levied
This means that if the legally-mandated fine for a misdemeanor is €5.000, a first-time offender company with 9
or fewer employees and <€8000 annual revenue would
pay just €750; while a company with previous infractions, annual revenues of >2 EUR million and more than
250 employees would pay the full €5.000.
Companies that have more than 250 employees and
generate annual revenue of at least 100 million denars
and were not previously sanctioned will pay the full
amount of the fine.
The Law also allows State institutions to warn offending companies, rather than automatically levy a fine for
every infraction.
Law on Litigation Procedure
In the official justification for the proposed amendments to the Law on Litigation Procedure, the Ministry of Finance explained they were made in line with
20 Fall 2015
Issue 47
The new Law on the General Administrative Procedure
obligates all State institutions to provide faster, simpler,
effective and cost efficient services to citizens. In the
upcoming period, all State institutions will need to align
their legal structure with the new Law, to shorten their
service response times and avoid unnecessary service
delays.
The Law systematically applies a “one stop shop” principle to all public services for the first time. This means
that when a client requests a service from a State
institution, it will be required to request the required
inputs (e.g., data, documents) from all other involved
institutions on behalf of the client within 3 working days.
It also obligates the other involved State institutions to
respond to such intra-institutional requests within 3
days.
Law on Mandatory Social
Contributions
After just 8 months of enforcement, in late July, the
Macedonian Government decided to recall the Law
on Mandatory Social Contributions. The Law required
companies registered in Macedonia to pay full income
taxes and social insurance contributions on behalf of
consultants who provide services to them, even for