Bosnia and Herzegovina

Bosnia and Herzegovina consists of two entities: Federation of Bosnia and Herzegovina (FBiH) and Republika Srpska (RS), with a third region, the Brčko District (BD), being administered by both. Direct taxes are imposed at the entity/district level, while indirect tax regulations are imposed at the state level. CIT systems in Bosnia and Herzegovina have been partially harmonised in the past few years, but significant differences remain.

The Federation of Bosnia and Herzegovina, Republika Srpska, and the Brčko District tax resident corporations on a worldwide basis. Non-residents are taxed on income realised in the FBiH, RS, and BD territories.

FBiH CIT

A CIT payer in the Federation of Bosnia and Herzegovina is:

• A resident company or other legal entity performing independent and permanent business activity through the sale of products and provision of services in the domestic or foreign markets for the purpose of generating profit.
• A legal entity from Republika Srpska and Brčko District that is registered in the territory of the Federation of Bosnia and Herzegovina for the income generated in the territory of the Federation of Bosnia and Herzegovina.
• A business unit of a non-resident legal entity that performs activities through a permanent establishment (PE) in the territory of the Federation of Bosnia and Herzegovina and is a resident of the Federation of Bosnia and Herzegovina.
• A non-resident in respect to the income generated from a resident of the Federation of Bosnia and Herzegovina.

The CIT rate in the Federation of Bosnia and Herzegovina is 10%.

RS CIT

A CIT payer in Republika Srpska is:

• A legal entity, a resident of Republika Srpska, for income generated from any source in Republika Srpska, Federation of Bosnia and Herzegovina, Brčko District, or abroad.
• A business unit of a legal entity from Federation of Bosnia and Herzegovina or Brčko District, which is registered in the territory of Republika Srpska, in respect to the income generated from sources in Republika Srpska.
• A legal entity from Federation of Bosnia and Herzegovina or Brčko District for income generated from real estates located in the territory of Republika Srpska.
• A non-resident legal entity that conducts business activity through a PE in Republika Srpska, in respect to the income generated from sources in Republika Srpska.
• A non-resident legal entity for revenue (i.e. income) generated from sources in Republika Srpska.

The CIT rate in Republika Srpska is 10%.

BD CIT

A CIT payer in Brčko District is:

• A legal entity from Brčko District that generates income from any source in Bosnia and Herzegovina or abroad.
• A business unit of a legal entity with headquarters in the Federation of Bosnia and Herzegovina or Republika Srpska, for income generated in Brčko District.
• A non-resident legal entity that conducts business activity and has a PE in Brčko District, for income that is related to that PE.
• A non-resident legal entity that generates income from immovable property in Brčko District, for the income generated in Brčko District.
• A non-resident legal entity that generates income in Brčko District, not mentioned above, and is subject to withholding tax (WHT) in accordance with the CIT law of Brčko District.

The CIT rate in Brčko District is 10%.