Bosnia and Herzegovina

Corporate - Corporate residence

Last reviewed - 13 February 2020

FBiH residency

Under FBiH CIT law, a resident is a legal entity that meets one of the following criteria:

  • Headquarters (registration) is entered into a court registry of the Federation of Bosnia and Herzegovina.
  • Management and supervision over the business activities is located in the Federation of Bosnia and Herzegovina.

FBiH permanent establishment

A PE of a non-resident is a permanent place of business through which the non-resident performs activity in whole or partially throughout the territory of the Federation of Bosnia and Herzegovina.

A PE under FBiH CIT law is considered to be one of the following:

  • Management headquarters.
  • Branch office.
  • Business office.
  • Factory.
  • Workshop.
  • Location of natural resources extraction.
  • Construction site (construction or mounting project) when the work is performed during a period exceeding six months.
  • Providing consulting or business services lasting for a period exceeding three months consecutively over a 12-month period.
  • A representative acting independently on behalf of a non-resident related to the activities of signing a contract or keeping supplies of products delivered on behalf of a non-resident.

The term PE shall be deemed not to include the following:

  • The use of facilities solely for the purpose of storage, display, or delivery of goods or merchandise belonging to the enterprise.
  • The maintenance of stock of goods or merchandise belonging to the enterprise solely for the purpose of storage, display, or delivery.
  • The maintenance of stock of goods or merchandise belonging to the enterprise solely for the purpose of processing and finishing by another enterprise.
  • Maintenance of a fixed place of business solely for the purpose of purchasing goods or merchandise or of collecting information for the enterprise.
  • Maintenance of a fixed place of business solely for the purpose of carrying on, for the enterprise, any other activity of a preparatory or auxiliary character.
  • Maintenance of a fixed place of business solely for any combination of above-mentioned activities, provided that the overall activity of a fixed place of business is of a preparatory or auxiliary character.

A non-resident legal person shall not be deemed to have a PE in the Federation of Bosnia and Herzegovina merely because it carries on business through a broker, general commission agent, or any other agent of an independent status, provided that such persons are acting in the ordinary course of their business.

A non-resident legal person shall not be deemed to have a PE in the Federation of Bosnia and Herzegovina merely because it controls or is controlled by a legal person resident of the Federation of Bosnia and Herzegovina.

Provisions of a double tax treaty (DTT) shall prevail over domestic law when identifying a PE.

RS residency

Under the RS CIT law, a resident of Republika Srpska is a legal entity that meets one of the following criteria:

  • Headquarters of a legal entity is registered at the registry of business entities of Republika Srpska.
  • The place of actual management and supervision over the business activities of a legal entity is located in Republika Srpska.

RS permanent establishment

A PE is considered to be a place of business in Republika Srpska through which the business of a foreign legal entity is wholly or partially carried on. The term PE includes the following, especially:

  • A place of management, a branch, an office, a factory, a store, a workshop, a mine, an oil or gas well, a quarry, or any other place of extraction of natural resources in the territory of Republika Srpska.
  • A building site, installation, or assembly works in Republika Srpska, as well as a place of infrastructure used for research or extraction of natural resources or supervisory of the same.
  • A place of business where an individual or legal person has the authority to conclude contracts in the name of the non-resident enterprise.
  • A place where a resident individual or legal person, without authority to conclude contracts in the name of the non-resident enterprise, does business in the name of the non-resident enterprise by holding stock of goods or merchandise and carries out deliveries on a regular basis in the name of the non-resident enterprise.

The term PE shall be deemed not to include the following:

  • The use of facilities solely for the purpose of storage or display of goods or merchandise belonging to the enterprise.
  • The maintenance of stock of goods or merchandise belonging to the enterprise solely for the purpose of storage or display.
  • The maintenance of stock of goods or merchandise belonging to the enterprise solely for the purpose of processing and finishing by another enterprise.
  • Sale of goods or merchandise belonging to the enterprise, provided that it was displayed during fairs or exhibitions under condition that the sale was executed within a month of closing a fair or an exhibition.
  • Maintenance of a fixed place of business solely for the purpose of purchasing goods or merchandise or of collecting information for the enterprise.
  • Maintenance of a fixed place of business solely for the purpose of carrying on, for the enterprise, any other activity of a preparatory or auxiliary character.
  • Maintenance of a fixed place of business solely for any combination of above-mentioned activities, provided that the overall activity of a fixed place of business is of a preparatory or auxiliary character.

A foreign legal entity shall not be deemed to have a PE in Republika Srpska merely because it carries on business through a broker, general commission agent, or any other agent of an independent status, provided that such persons are acting in the ordinary course of their business.

A foreign legal entity shall not be deemed to have a PE in Republika Srpska merely because it is controlled by a legal person that is a resident of Republika Srpska or by a person carrying out business in Republika Srpska, whether through a PE or otherwise.

Provisions of a DTT shall prevail over domestic law when identifying a PE.

BD residency

The BD CIT law prescribes that a resident is a legal entity registered in Brčko District.

BD permanent establishment

A PE of a non-resident in Brčko District is considered to be:

  • construction works, installation and assembly works, infrastructure used for research or exploitation of natural resources, or supervisory of the same, or
  • a place of business where an individual or legal person has the authorisation to conclude contracts for a foreign legal entity.