Taxes in BiH

Basic tax categories:

  - Value Added Tax
  - Corporation Tax
  - Income tax
- Property tax
- Employer and employee social security contributions,
  - Excise duties are a special type of tax paid on certain products such as petroleum products, tobacco products, soft drinks, alcoholic beverages, beer, wine and coffee.

TAX RATE CATEGORIES

Value Added Tax 17% (FBiH, RS, BD)
Corporate Tax 10% (FBiH, RS, BD)
Income tax 10% (FBiH, BD) and 8% (RS)


Value Added Tax (VAT)

Single VAT rate of 17%. The Administration for Indirect Taxation is responsible for collecting value-added tax and coordinating fiscal policy matters as a whole. This body is also responsible for collecting customs duties and excise duties throughout the territory of BiH.

Value Added Tax is a comprehensive consumption tax, and it is levied based on the value added to goods and services. It is a direct tax that applies to all business activities, including the production and distribution of goods and the provision of services. VAT is a consumer tax because the total amount of VAT is not paid by the company, but by the end consumer. It is assessed as a percentage of the price of goods or services. The amount of tax is visible at all stages, from production to distribution. When settling their tax liability, the taxpayer will deduct the value-added tax from the amount of tax they have already paid to other taxpayers on purchases. This ensures tax neutrality regardless of the number of transactions involved.

Corporate tax rate in BiH

    Federation of BiH - 10%
    Republika Srpska - 10%
    Brčko District - 10%

Profit transferred from abroad is not taxed in BiH

Profit transferred from abroad is not taxed  if it has previously been subject to taxation abroad.

Method of calculating corporation tax

Profit is calculated in accordance with applicable laws, by deducting  expenses from income. The tax base includes profit, income and capital gains, in accordance with accounting regulations. Expenses must comply with accounting standards.

Income tax rates

In FBiH - Income tax is 10% of net salary (based on the gross model).

In RS - Income tax is 8% of the net salary (based on the gross model).
Tax on income from self-employment is paid at a rate of 10%.
Tax on income from royalties, capital, capital gains and other income is paid at a rate of 13%. Foreigners and Taxes in BiH All foreigners with a residence in the Federation of BiH and Republika Srpska pay tax on income earned in the calendar year within the territory of BiH. Likewise, all foreigners who do not reside in BiH, but who earn income in the Federation of BiH and the Republika Srpska, are considered taxpayers. In the Brčko District, foreigners are treated as taxpayers if they stay on the territory of the Brčko District for at least a continuous period of 183 days.

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