Taxes in Bosnia and Herzegovina, Taxation in Bosnia and Herzegovina, Taxes system in Bosnia and Herzegovina
There are three separate states and administrative units in Bosnia and Herzegovina: the Federation and RS
Ko District this year. Tax rates and tax credits are different in all three entities and there is no central tax administration.
centrally managed system of VAT was introduced at the state level on 1 January 2006, and changes were made in 2008
harmonization of corporate tax and income tax.
Tax rate in the Federation was amended with effect from 1 January 2008 to equal 10% rate in the RS and the Br ko District. Non-Resident
subject to 5% tax on dividends, as well as the 10% withholding tax, which includes gains from interest
license fees, tax, insurance and telecommunications. All permits granted under the old regime remain
force throughout the period in which they were granted (see general tax incentives, below).
Br ko District has a modern system of income tax from individuals, which was introduced in 2004 and provides a lump sum
10%. Federation adopted the new Income Tax Law for 2008, also calls for a linear tax amounting to 10% and provides for deductions
including to mirror as financial and invalidity pensions. Before the end of this law, the income tax imposed by
Federation depending on the type of income. RS maintains this structure, in which income tax is
from 0% to 15% of net income.
Country Report for Investors and Exporters of Bosnia and Herzegovina Seite 9
VAT is charged jointly on behalf of all three entities in the state in 17% of the
January 1, 2006. This tax applies to turnover of sales of goods and services as well as import goods.
Small and medium-sized businesses with an annual turnover of less than 50,000 hp are exempt from VAT. VAT must be paid every month, in which
VAT paid is deductible.
Oil and petroleum products, tobacco and tobacco products, alcohol and alcoholic beverages, soft drinks and coffee
excise duty. The rules make no distinction between the import and export.
Cantons are responsible for the acquisition of real property taxation. The rates differ only slightly, and ranges from 5 to 8%. In addition,
there is a tax on net assets regulated by the cantons.
municipal taxes include a number of charges, such as rental income, interest, royalties, profits of the company.
General Tax Incentives
The current system provides generous tax incentives, including a total exemption in the free zones in the first five years.
Different rules apply to the Federation and the RS. Companies that are wholly owned by foreign entities are exempt
Income tax for the first five years. Joint ventures with foreign participation of over 20% receive tax benefits in both
Federation and RS, which are based on the ratio of foreign investment. investment assets are exempt from tax in
Customs and Trade Barriers
Tariffs in Bosnia and Herzegovina, range from 0% to 15%. Most of Bosnia and Herzegovina are given duty free
status in the EU on the basis of the preferential status granted in 2000.