AmCham Macedonia Winter 2014 (Issue 40) - Page 17

ANALYSIS The above distinction would have two positive effects: • First: Unreasonably long term outstanding receivables from related parties would still be taxed, thus the CIT Law would achieve its goal. Tax avoidance by transferring excess funds from one related party to another (especially towards parent entities) would be limited. • Second: Companies that want to employ their excess cash by granting loans to non-related entities would not be discouraged by the tax. It is certainly hard to argue from a macroeconomic standpoint that policy should encourage companies to hoard excess cash rather than employ it via lending to other entities that need it. Other Issues Another issue requiring attention is the tax treatment of existing loans (i.e., those granted in previous years that st