Value Added Tax (VAT)
A uniform tax rate of VAT - which amounts to 17%. Indirect Taxation Authority is responsible institution for the collection of value added tax and fiscal policy coordination in general. Indirect Taxation Authority is also responsible for collecting customs duties and excise taxes on the entire territory of Bosnia and Herzegovina.
Taxes on profit
Profit tax rate is 10%.
Corporate income tax base
Profit is calculated in accordance with applicable laws, by subtracting the (real) cost from revenue. The tax base includes the profit earned through income and capital gains, in accordance with accounting regulations. Expenditures must be in accordance with accounting standards.
The income tax rate in the Federation of BiH is 10% of net salary (in accordance with the gross method).
Social security contributions
- 23% - contribution to pension / disability insurance,
- 16.5% - contribution for health insurance,
- 2.0% - contribution for employment.
Special fees and memberships - on a yearly basis
- Tax on business - depending on type of activity,
- 0.5% paid net wages - general water fees,
- 0.5% of net wages paid - taxes for protection from natural disasters,
- 0.5% of total revenues at the end of the year - a tourist association fee,
- 0.7% of total revenues at the end of the year - a fee for the beneficial functions of forests.
According to the provisions of the Income Tax of BiH Federation, foreign investors enjoy the following benefits:
- If the profits realized by exports are over 30% of the total income in the year for which the tax is assessed, a taxpayer shall be exempt from profit tax for that year.
- If a taxpayer is investing in production, in the Federation of BiH, for a period of 5 (five) consecutive years amounting to at least 20 million KM, the taxpayer shall be exempt from profit tax for a period of 5 (five) years, commencing from the first year of investment in which at least 4 million KM must be invested.
- A taxpayer, who employs more than 50% of disabled and people with special needs for more than one year, shall be exempt from profit tax for the year in which more than 50% disabled and people with special needs were employed.
- Exempt from customs duties and customs fees for investment capital (except for passenger vehicles and gaming and entertainment equipment).