TAXES AND CUSTOMS
- Income tax rate
- Non-taxable income (€)
- Dividend tax rate
- Income tax rate
- VAT rate
- Collective contribution rate on gross wages
- Republika Srpska
- Federacija BiH
The basic taxation categories are:
• Value Added Tax
• Corporate income tax
• Personal income tax
• Property tax
• Social security contributions paid by employers and employees
• Excises, a special type of sales tax paid on some commodities like oil products, tobacco products, soft drinks, alcohol drinks, beer, wine, and coffee.
CATEGORIES OF TAX RATE
Value Added Tax 17%
Corporate Income Tax 10%
Personal Income Tax 10%
Value added tax (VAT)
The unique VAT rate is 17%. Indirect Taxation Authority is in charge of collecting value-added tax and coordinating fiscal policy issues in general. This body is also responsible for collecting customs and excises on the entire territory of BiH.
Value added tax is a comprehensive tax on consumption, assessed based on the value added to goods and services. This is a general tax applied to all commercial activities, including manufacturing and distribution of goods and providing services. It is a consumer tax because it is not paid by the company, but by the end user. It is assessed as a percentage of the cost of goods or services. The tax amount is visible in all stages, from manufacturing to the distribution chain. When paying the tax liability, the taxpayer will reduce the value added tax by the tax amount he/she has already paid to other taxpayers at purchase. This ensures the neutrality of taxation, regardless of the number of transactions involved.
The corporate income tax rate in B&H
• Federation B&H – 10%
• Republic of Srpska – 10%
• Brko District – 10%
Profits transferred from abroad are not taxed in BiH
Profits transferred from abroad are not taxed if they were previously subject to taxation abroad.
Corporate taxable basis
Profits are calculated in accordance with applicable laws, by deducting (real) expenses from revenues. The tax base includes profit gained through revenues and capital gains, according to the accounting regulations. The expenditures must conform to the accounting standards.
Personal income tax rates
In FBiH – Personal income tax is 10 % on net salary (in accordance with gross model).
In RS – Personal income tax is 10% on net salary (in accordance with gross model).
Foreigners and taxes in BiH
All foreigners with permanent residence in the Federation BiH and RS pay personal income tax on revenues earned during a calendar year in BiH territory. Equally, all foreigners who do not reside permanently.
Bosnia and Herzegovina customs system is regulated by a number of autonomous and international regulations, which are uniformly applied on the territory of BiH.
The Law on customs policies of Bosnia and Herzegovina regulates the main elements of the system for customs protection of Bosnia and Herzegovina’s economy, rights and obligations of all subjects in procedures involving customs clearance of goods and passengers. Regulations define customs territory, customs line, customs frontier line, customs supervision, customs clearance procedures for goods and other institutes that regulate the customs protection system. Customs tariff includes rates ranging from 0- 15 %. Customs regulations are applied uniformly on the territory of BiH.
Customs clearance procedure for goods imported into the customs territory of BiH is conducted by the customs office where the goods have been registered for customs clearance.
There are four main regional centers in BiH:
- Customs office Banja Luka,
- Customs office Sarajevo,
- Customs office Tuzla,
- Customs office Mostar
The signing of the Stabilization and Association Agreement enables free export of almost all types of goods into the EU which meet the standards, and at the same time BiH market is gradually opening for goods from EU according to the dynamics agreed in annexes and protocols which are part of this Agreement.
BiH has signed the Agreement on free trade CEFTA with the following countries: Albania, Montenegro, Macedonia, Moldova, Serbia, and UNMIK/Kosovo. CEFTA agreement replaces and supplements the existing agreements on free trade with certain countries in the region. This enables more transparency and game rules comparable to EU standards, as well as access to a market of around 30 million people.
Also, a Free Trade Agreement was signed with Turkey, as well as a Preferential Trade Agreement with Iran and a Free Trade Agreement with EFTA countries (Switzerland, Liechtenstein, Norway, and Iceland).
Exemption from Import Duties Payment
The provisions of Article 207 of the Customs Policy Law of Bosnia and Herzegovina (Official Gazette of BiH 58/15), in force since 25 April 2018, sets forth the instances of exemption from import and export duties payment.
The Decision on requirements and procedure to exercise the right to exemption from import and export duties payment (Official Gazette of BiH 24/18) sets forth the requirements and procedure to exercise the right to exemption from import duties payment when releasing goods into free circulation in cases provided for by Article 207, item a) of the Customs Policy Law of Bosnia and Herzegovina and restrictions regarding disposal of the goods exempted from import duties payment, as well as exemptions from export duties payment when exporting.
Border Crossings: Novi Grad, Kostajnica, Kozarska Dubica, Gradiška, Brod, Šamac, Rača, Popovi (Pavlovića Most), Karakaj, Klobuk, Deleuša, Vardište, Zupci, Uvac, Ivanica, Bratunac, Donja Gradina.
Customs Crossing Points: Novi Grad, Kozarska Dubica, Gradiška, Brod, Rača, Popovi (Pavlovića Most), Karakaj, Klobuk, Deleuša, Vardište.