Bosnia and Herzegovina

Value-added tax (VAT)

The standard VAT rate is 17%, and the VAT regime applies equally throughout the country of Bosnia and Herzegovina. There is no reduced VAT rate in Bosnia and Herzegovina.

Taxable persons are all individuals and legal entities registered, or required to be registered, for VAT. Any person making taxable supplies of goods and services that exceeds or is likely to exceed a threshold of 100,000 konvertibilna marka (convertible mark or BAM) is required to register as a VAT payer.

The export of goods is zero-rated.

Taxable transactions include the supply of goods and services in Bosnia and Herzegovina by a taxable person, as well as the importation of goods to Bosnia and Herzegovina by any person. The following transactions are also taxable:

• Transactions for no consideration or for a consideration less than the market value.
• The private use of taxable goods by a taxable person (self-supply).

The following services are exempt from VAT in Bosnia and Herzegovina:

• The leasing and subletting of residential houses, apartments, and residential premises for a period of longer than 60 days.
• The supply of immovable property, except for the first transfer of the ownership rights or the rights to dispose of newly constructed immovable property.
• Financial services.
• Insurance and reinsurance services.
• Educational services provided by private or public educational institutions.
• Postal services.

The VAT period is one calendar month.

Any tax credit that has not been used after a period of six months shall be refunded. Registered exporters are to be refunded within 30 days.

Customs duties

The customs policy law and the rates of customs tariffs to be applied exist and are largely based on European Union (EU) standards. Bosnia and Herzegovina has signed the Stabilisation and Association Agreement (SAA) and the Central European Free Trade Agreement (CEFTA).

Excise duties

There is a single excise regime throughout Bosnia and Herzegovina, which levies excise tax on the following products:

• Petroleum products: BAM 0.3 to BAM 0.4 per litre.
• Tobacco products: 42% on retail price and an additional BAM 0.75 per pack of 20 cigarettes. If the calculated excise duty is lower than the minimally prescribed excise duty, then the minimal excise duty should be paid (the minimal duty is determined every year by the indirect tax authorities by special regulation).
• Non-alcoholic drinks: BAM 0.1 per litre.
• Alcohol and alcoholic drinks: BAM 8 to BAM 15 per litre of absolute alcohol.
• Beer and wine: BAM 0.2 to BAM 0.25 per litre.
• Coffee (unroasted, roasted, and ground coffee and coffee extracts): BAM 1.5 to BAM 3.5 per kilogram.

Property taxes (real estate)

FBiH property taxes

FBiH property taxes are imposed at the cantonal level (ten cantons in total), and the rates as well as the taxpayers are different between the cantons. The taxes are paid in the range of BAM 0.5 to BAM 3 per square metre.

RS property taxes

RS property taxes are imposed at the entity level. The annual tax rate is 0.20% of the market value of the property. 

BD property taxes

BD property taxes are imposed by the BD assembly. The annual tax rate is between 0.05% and 1% of the market value of the property. The rate is adopted by the assembly for every year based on the proposed annual budget.

Tax on transfer of land and real estate

FBiH transfer taxes

The FBIH tax on transfer of land and real estate is imposed at the cantonal level. The rate differs by canton; however, it cannot be higher than 5%.

RS transfer taxes

There is no tax on transfer of land and real estate in Republika Srpska.

BD transfer taxes

There is no tax on transfer of land and real estate in Brčko District.

Payroll taxes

FBiH payroll taxes

Personal income tax (PIT) of 10%, in addition to social security contributions, has to be calculated and withheld by an employer with the salary payment.

There are no additional payroll taxes due in the Federation of Bosnia and Herzegovina.

RS payroll taxes

PIT of 10%, in addition to social security contributions, has to be calculated and withheld by an employer with the salary payment.

There are no additional payroll taxes due in Republika Srpska.

BD payroll taxes

PIT of 10%, in addition to social security contributions, has to be calculated and withheld by an employer with the salary payment.

There are no additional payroll taxes due in Brčko District.

Social security contributions

FBiH social security contributions

Mandatory social security contributions in the Federation of Bosnia and Herzegovina are due by the following rates:

The base for calculation of social security contributions is the gross salary.

In the Federation of Bosnia and Herzegovina, the employer also pays 0.5% of contribution for protection from natural and other disasters, as well as 0.5% of the water protection charge, calculated on net salary.

Social security contributions have to be calculated and withheld by an employer with the salary payment.

RS social security contributions

In Republika Srpska, the following rates of mandatory employee’s social security contributions have to be applied:

In Republika Srpska, mandatory social security contributions are calculated on gross salary and have to be withheld by the employer, as an income payer. There are no employer’s social security contributions in Republika Srpska.

BD social security contributions

Persons who are working in Brčko District can opt to which fund of pension insurance, either the fund of Republika Srpska or fund of the Federation of Bosnia and Herzegovina, they would like to pay pension and invalid insurance contributions.

Health insurance contributions are calculated in the amount of 12% on gross salary.

The table below provides an overview of mandatory social security contributions in Brčko District in a scenario when an employee opts to pay pension and invalid insurance contributions to the Pension Insurance Fund of the Federation of Bosnia and Herzegovina.

The table below provides an overview of mandatory social security contributions in Brčko District in a scenario when an employee opts to pay pension and invalid insurance contributions to the Pension Insurance Fund of Republika Srpska.

Other taxes

There are several other taxes introduced at the entity, cantonal, and municipality level. The duties differentiate based on company location, business size, and type of business.

FBiH other taxes

FBiH other taxes include the communal tax, tourist community contribution, forestry contribution fee, Foreign Trade Chamber of Bosnia and Herzegovina duty, Chamber of Commerce FBiH duty, and administrative stamp duties.

RS other taxes

RS other taxes include the special republic tax, communal tax, forestry contribution fee, fire prevention contribution, Foreign Trade Chamber of Bosnia and Herzegovina duty, Chamber of Commerce RS duty, and administrative stamp duties.

BD other taxes

BD other taxes include the communal tax, fire prevention contribution, forestry contribution fee, Foreign Trade Chamber of Bosnia and Herzegovina duty, and administrative stamp duties.