E-invoicing takes the stage: the smallest firms face the biggest challenge

Companies in North Macedonia are entering a period of major changes in how invoices are issued and received. According to the draft proposal for electronic invoicing published on ENER, voluntary use is planned from 1 October 2026, while the system should gradually become mandatory from 1 April 2027 for VAT payers.

Who will be covered and when

The draft states that from 1 April 2027 mandatory issuance and receipt of e-invoices will cover VAT payers, public enterprises and certain companies in state and municipal ownership. From 1 July 2027 the system is to be extended to legal entities that conduct economic activity but are not registered for VAT; the next phase is planned for October 2027, and from 1 January 2028 the coverage should be further expanded. The timelines are part of the draft proposal and the final schedule will depend on the legislative process.

The biggest challenge will be for the smallest firms. In North Macedonia in 2024 there were 73,310 active enterprises, of which as many as 59,351, or 81 percent, had between one and nine employees. Only 235 companies had 250 or more employees. Companies with a few employees have much less room for additional administration and often do not have dedicated finance, accounting or IT teams.

Technical readiness is already being tested during the summer. The Public Revenue Office in June launched a web application through which any small, medium or large company can test the system, regardless of technical readiness. Around 200 companies were included in the organized testing. Preparations take several months: in February, 148 companies signed up for testing, of which 57 were registered in the system, and 15 actively used it and created 1,115 e-invoices, of which 396 were successfully verified.

The change will also be felt in trade — of the total 73,310 active enterprises, 21,373 operated in wholesale and retail trade and repair of motor vehicles, which represents 29.2 percent of all active firms. Preparations also include public institutions: the Public Revenue Office and the Association of Units of Local Self-Government (ZELS) at the beginning of August organized training for 80 representatives from municipalities and public enterprises, during which the functioning of the system and the way to use it were presented.

The reform also aims to reduce the shadow economy. The Ministry of Finance in January stated that estimates by the World Bank, the IMF and the European Commission place the shadow economy in the country at around 30 percent of GDP. According to the Ministry, e-invoicing should enable more efficient tax collection based on timelier data and better control of transactions.

With more than 73 thousand active enterprises, four out of five of which have at most nine employees, the success of the reform will largely depend on how easily the new system can become part of the daily operations of the smallest businesses. Companies should start preparations in time — to check how they will connect to the system, who will be responsible for e-invoices and how they will organize cooperation with their accountants.

Photo: press material from the event