LAW ON TAX PROCEDURE OF REPUBLIC OF SRPSKA

Published in the “Official Gazette of Republic of Srpska”, no. 102/11 of 17 October 2011; corrections published in the “Official Gazette of Republic of Srpska”, no. 108/11 as of 2 No-vember 2011; Changes and Amendments published in the “Official Gazette of Republic of Srpska”, no. 67/13 of 8 August 2013, and no. 31/14 as of 24 April 2014.

LAW ON TAX PROCEDURE OF REPUBLIC OF SRPSKA

I GENERAL PROVISIONS

Subject Matter Article 1

This Law shall govern the organization, competences, rights and obligations of Tax Administration of Republic of Srpska, rights and obligations of taxpayers, the tax procedure, payment of tax liabilities, regular and enforced collection of tax liabilities, as well as other forms of termination of tax liabilities, tax audit, legal remedy procedure, supervision, and tax related violations in Republic of Srpska.

Definitions Article 2

Terms used in this Law shall have the following meaning:

а) tax constitutes any payment obligation, the taxpayer is obliged to pay to the Budget of Republic of Srpska, to budgets of cities, municipalities, and funds, which is deemed irrecoverable, and shall include taxes, social contributions, fees, and charges, b) surtax constitutes any form of payment to the Budget of Republic of Srpska, municipality, city, and funds ensuing from obligation to pay tax, including tax related interest, costs of procedure, and other payments prescribed under tax legislation, as well as misdemeanor fines, c) tax liability constitutes an obligation of payment of due taxes within deadlines prescribed under tax legislation, d) taxpayer shall be the natural or legal person, part of legal person, or other entity obliged to pay tax in line with tax legislation in Republic of Srpska (hereinafter: the Republic), e) tax agent is a person who is required under tax legislation to collect any tax from any other person by withholding or any other method and to pay over such tax, f) taxpayer representative is a person who is authorized by law, general legal act or by contract to conduct some part or all of the affairs of the taxpayer connected with the taxpayer’s compliance with tax legislation, g) tax legislation shall include legislative acts pertaining to taxes or to introduction of obligation to pay taxes and tax surcharges, as well as bylaws issued by means of tax laws, h) tax secret is any information about a taxpayer possessed by the Tax Administration of Republic of Srpska (hereinafter: the Tax Administration), and which may be issued to third parties only in cases foreseen under this Law, and i) books and records constitute documentation pertaining to the taxpayer’s activities, transactions, payments, and income and expenditures, kept in accordance with tax laws and accounting regulations.

Application of the Law Article 3

Provisions of this Law shall apply to tax procedure, whereas in the case of issues not

regulated hereunder, the provision of regulations governing general administrative procedure shall apply.

Tax secret Article 4

(1) Tax Administration is obliged to provide security and confidentiality of tax

information and data collected from taxpayers that may if relinquished damage the taxpayer. (2) A person employed in the Tax Administration is obliged to keep the data and

information accessed and obtained in the course of performing work tasks as an official secret. (3) Notwithstanding Paragraph 2 of this Article, Tax Administration is obliged to issue

data kept as tax secret to: а) the Ministry of Finance (hereinafter: the Ministry), to other bodies of administration and administrative organizations of the Republic, bodies of local self-governance units, and to institutions exercising public authority, which shall be obliged to keep the received data as an official secret, b) competent Court Institution, Public Prosecutor, and Ministry of Interior, for purpose of establishing tax violation liability and tax related crimes,

c) foreign tax authorities in accordance with international agreements, d) other persons with the written consent of the taxpayer, and e) tax administrations in Bosnia and Herzegovina in line with specific agreement. (4) Tax Administration shall provide the Ministry undisturbed and continuous access o taxpayer cards, as well as to its other official records, and the Ministry shall treat such data as official secret. (5) A tax secret shall not include:

а) information and data that the taxpayer has specifically stated in writing is not to be considered as a tax secret, b) information and data in a form that cannot be associated with an individual taxpayer, or otherwise identified,

c) the name and Taxpayer’s Identification Number, d) information and data that may be used in the investigation or procedure concerning tax crimes, e) data from the Unified system used for purposes of system users and pertaining to the scope of work thereof, f) data from the Annual Certificate issued by Tax Administration, if issued to a competent trade union, upon request thereof, for the purpose of protection of rights of workers, and g) data on due but unpaid liability of taxpayers, if issued to the public media or published on the Tax Administration web page in the form of work report.

(6) Notwithstanding the Paragraph 3 of this Article, Tax Administration shall, upon written request, issue information pertaining to status of tax liabilities of a taxpayer, to an entity demonstrating legal interest. (7) Legal interest exists in case of an entity engaged in legal relation with tax debtor and having certain receivables in relation to the tax debtor, which is the result of the legal relation thereof.

II ORGANIZATION, COMPETENCE, RIGHTS, AND OBLIGATIONS OF THE TAX ADMINISTRATION

Organization of Tax Administration Article 5

(1) Tax Administration is an administrative body of the Republic, a constituent part of the Ministry. (2) Tax Administration is seated in Banja Luka.

(3) Tax Administration organization includes the Central Office, Regional Centers, Local Offices, and temporary offices, as well as other organizational units as prescribed under bylaw pertaining to internal organization and systematization of positions in Tax Administration.

(4) Tax Administration shall be managed by a Director, appointed and suspended by the Government of Republic of Srpska (hereinafter: the Government).

Special provisions pertaining to responsibilities of Tax Administration employees

Article 6

(1) Labor-legal status, as well as salaries of appointees and employees in Tax Administration shall be subject to regulations pertaining to employment and salaries in administrative bodies of the Republic. (2) In addition to severe violation of work duties established under regulation governing labor-legal status of civil servants and employees in administrative bodies of the Republic, civil servants and employees in Tax Administration shall be liable for severe violation of work duties if they:

а) refuse to provide free-of-charge information to taxpayers, upon their request, b) fail to issue tax certificate within prescribed deadline, i.e. fail to issue decision doc-ument on denial without objectively justified reason thereto, c) fail to timely update the data entered into tax records, d) fail to timely undertake prescribed measures pertaining to collection of tax liabilities, e) fail to deliver to taxpayer a notice on overpaid taxes, within prescribed deadline, f) purposely or out of mere disregard make an incorrect record on taxpayer’s liability in tax records.

(3) Internal organization and systematization of workplaces in Tax Administration shall be prescribed by means of a Rulebook issued by the Director, with the consent of the Government.

Tax Administration competence Article 7

Tax Administration shall be competent for the following: а) registration and identification of taxpayer, b) assessment of tax liability in line with the law,

c) control of legality and regularity in application of tax legislation, including calculation and payment of taxes and interest, d) regular and enforced collection of taxes and tax surcharges, e) control of calculations of gross salaries of employees for the purpose of this Law and

provisions of the General Collective Agreement and other agreements concluded in reference thereto, f) detection and prevention of crimes and tax violations within the scope of its competences, and filing of reports to the competent Prosecutor,

g) conduct of first instance tax procedures, h) sentencing of protective measures and penalties for tax violations, in line with this Law, i) tax records and tax accounting management, j)management of the fiscal real estate register and other prescribed registers,

k) information dissemination and education of taxpayers, at the request thereof, and in reference to current taxes, procedures and tax payment requirements, their rights and obligations, as well as to tax legislation, l) issuance of certificates pertaining to data kept in its official records, m) preparation of work reports, and publishing thereof on the web page of Tax Administration, whereas the format, the contents, the method and requirements of publishing shall be prescribed by the Minister of Finance (hereinafter: the Minister), and

n) other affairs in pursuance of the Law.

Obligation to provide professional assistance Article 8

Administrative bodies of the Republic, organizations, public companies, institutions, and funds shall provide the necessary professional assistance to Tax Administration for the purpose of implementation of tax legislation.

International legal assistance in reference to tax issues

Article 9

(1) Tax Administration shall in its work be entitled to seek international legal assistance. (2) For the purpose of this Law, international legal assistance means the right of the Tax Administration to refer to a foreign tax body with a request for assistance in resolving a certain tax case, as well as to deliver to this body available information and documents pertaining to a specific taxpayer. (3) Provision of international legal assistance shall be based on international agreements. (4) If an international agreement is not signed, legal assistance shall be given under the following conditions:

a) if there is reciprocity, or b) if the provision of information does not endanger public order and other vital

interests of the Republic of Srpska, and if there is no danger of disclosing official, commercial, industrial, technological or professional secrets, as well as if the provision of information will not cause damage to taxpayer to the extent inconsistent with the purpose of the legal assistance.

(5) Before submitting the information and documentation to a foreign country, the person to whom the information and documents relate shall be informed respectively.

Unified System of Registration, Control, and Collection of Contributions

Article 10

(1) Tax Administration manages the Unified System of Registration, Control, and

Collection of Contributions, which constitutes an administrative-technical system enabling the Tax Administration to perform registration, control, and collection of contributions and generation of data from contribution payers and beneficiaries.

(2) The Unified System users are Health Insurance Fund of Republic of Srpska, Pension and Disability Insurance Fund of Republic of Srpska, Public Fund for Child Care of Republic of Srpska, and Employment Bureau of Republic of Srpska (hereinafter: the System users).

(3) Contribution payers and beneficiaries shall be subject to registration with the Unified System.

(4) The Unified System database is the unique register of all contribution payers and beneficiaries, of data necessary to enable control of payment of contributions, and data pertaining to implementation of rights ensuing from compulsory and voluntary insurance.

(5) The Unified System produces reports on risky payers and identifies payers avoiding payment, payers who are paying or reporting lower amounts of contributions, i.e. those who fail to file the registration form to the Unified System.

(6) Tax Administration shall provide to System users unrestricted access to System database, and transfer and use of data from their respective scope of competences.

(7) Tax Administration shall issue to contribution beneficiaries a certificate, from the Unified System, containing data on period of insurance, amount of paid, i.e. unpaid contributions and salaries, no later than by 30 June of the current year for the previous year, or as per request of the contribution beneficiary.

(8) Tax Administration shall maintain the information system enabling storage, use, and reconstruction of data from the Unified System database even in case of consequences of a Force Major, and shall maintain an information system meeting the minimum requirements for the functioning of the Unified System at a different location, which is at least 50 kil-ometers air distance away from the primary database location at the territory of the Re-public.

(9) The method of establishment of database and that of risk categorization of contribution payers, as well as methods, requirements, and procedure of registration with the Unified System shall be prescribed under a Rulebook issued by the Minister of Finance (hereinafter: the Minister), upon proposal of the Tax Administration Director.

Unified register on reported and paid taxes Article 11

(1) Tax Administration shall manage the Unified register of reported and paid taxes. (2) Unified register of reported and paid taxes constitutes a supporting record providing for establishment and maintenance of analytical data on taxpayer liabilities. (3) Individual records on taxpayer’s total liabilities and payments shall be provided by means of a taxpayer card. (4) Document issued by means of data from the Unified register of reported and paid taxes constitutes a public document.

(5) Tax Administration records are managed by means of an integrated information

system. (6) Tax Administration shall, by means of its information system, regulate and provide for processing, coding, transfer, and rendering of data.

(7) Accounting entries of taxpayer liabilities, in the General Ledger of the Treasury of Republic of Srpska, shall be made on the day of balance of accounts performed by means of the Unified register reports pertaining to reported and paid taxes.

Tax certificate Article 12

(1) Tax Administration shall issue a written or electronic certificate on facts kept in its official records using the data contained in the taxpayer’s card. (2) Tax certificate shall be issued upon verbal or written request of the taxpayer, his/her legal representative or proxy, immediately, and no later than within five days from the day of request. (3) In case the Tax Administration denies the request for tax certificate, it shall issue a special decision document thereabout, which is subject to an appeal to be stated before the Ministry, within 15 days from the day of delivery of the decision document. (4) In case the Tax Administration fails to issue the certificate within deadline referred to in Paragraph 2 of this Article, and fails to issue a decision document pertaining to denial of the request, taxpayer shall be entitled to an appeal to be stated before the Ministry within 15 days, as if the request had been denied.

Tax Board Article 13

(1) Tax Board shall be in charge of coordination of activities and processes between the competent representatives of business community (representatives of Chamber of Commerce, Employers Union) in the Republic, the representative trade union, representatives of pensioners, and representatives of the Government, in regards to all significant issues pertaining to application of tax legislation and improvement of economic environment in the Republic. (2) Tax Board, as an advisory body, shall be appointed by the Government and shall include one representative of the business community, one representative of a representative trade union in the Republic, one representative of pensioners in the Republic, and two representatives of the Government, namely professionals from the field of taxes and tax system. (3) Tax Board shall examine significant issues in regards to tax treatment and taxation of businesses and other taxpayers in the Republic, and provide expert opinions and proposals for resolution of issues referred to in Paragraph 1 of this Article. (4) Tax Board members shall be appointed for a two-year term, whereas requirements, method, and procedure of the work thereof shall be prescribed under Rules of Procedures issued by the Tax Board and published in the “Official Gazette of Republic of Srpska“.

Rights and obligations of taxpayers Article 14

Taxpayer shall have the right and the obligation to: а) register with the Tax Administration and report to the respective office of registration any changes of address, ownership, or company organisation as well as any changes to other data subject to registration with the Tax Administration,

b) obtain free copies of tax forms, c) file tax declarations in the format, in the place and at the time prescribed by tax legislation, d) settle tax obligations in the manner and under the terms laid down by tax legislation, e) obtain from Tax Administration free information pertaining to taxes, as well as to tax legislation and related regulatory acts governing the procedures for payment and the terms of payment of tax liabilities, f) elect the bookkeeping method in line with tax legislation for the purpose of calculation and payment of taxes, keep books and records as prescribed by tax legislation, and ensure the maintenance of such books and records, including associated computerized records and files, for five years from the due date of the tax declaration for the tax to which the books and records relate, g) as a legal entity or organization seated in the Republic, i.e. as foreign legal entity or organization producing income in the Republic to inform the Tax Administration, within five days from the day of registration, about opening or closing any bank account in the country or abroad, h) represent own interests in a tax procedure, personally or through a representative, i) provide explanation to Tax Administration with regards to calculation and payment of tax-es, j) conduct properly during audits, in line with the law, k) make available or submit to Tax Administration all documents required for audit procedure, l) not hinder any officials of the Tax Administration in the legal conduct of their duties, and m) other rights and obligations established by law. III TAX PROCEDURE

Tax procedure concept Article 15

(1) Tax Procedure constitutes an administrative procedure managed by the Tax

Administration in the first instance, and by the Ministry in the second instance. (2) Tax Procedure shall include: (a) registration, (b) filing and assessment of tax liabilities, (c) issuing of tax certificate, (d) regular collection of tax liabilities, (e) enforced collection of tax liabilities, (f) tax audit, and (g) second-instance tax procedure. (3) In addition to tax procedure refereed to in Paragraphs 1 and 2 of this article Tax Administration shall manage the tax related minor offense procedure.

Initiation of tax procedure and documents Article 16

(1) Tax Procedure shall be initiated ex officio, i.e. as per request of a client. (2) Tax document shall be the tax decision document, conclusion, tax declaration, tax

bill, tax audit order, tax audit minutes, and other documents used to initiate, amend, change, or complete an action in tax procedure.

(3) First-instance decision document and conclusion shall be subject to an appeal

before the Ministry, to be filed within 15 days from the day of delivery of the decision document, i.e. conclusion, to the taxpayer.

Summons Article 17

(1) In conduct of tax procedure the Tax Administration shall have the right to issue

summons to any person for the purpose of making a statement or producing documents or other books and records necessary for the implementation and execution of tax legislation, respectively so in the capacity of a client in a procedure, of an interested party or any other party for whom the Tax Administration believes to possess information or documentation rel-evant to the respective tax procedure. (2) The summons shall contain the mark of tax case, the mark of procedure in process, the time and place of the testimony or production of documents, as well as rights and obligations of the summoned party, indication of capacity of the person summoned, consequences of contempt to summons, and accurate list of documentation in case a person is summoned for the purpose of producing documentation. (3) The summons shall be served on the person at least five days before the date pertaining to taking of action in reference to procedure that is the subject of the summons. (4) Under-aged persons or commercially incapacitated persons shall be summoned via legal proxies. (5) A summoned person is entitled to the participation of his/her representative during the procedure of giving statement and to tape record the whole course of giving the statement using the adequate media. (6) A written report of the statement shall be drawn up and signed and dated by the person conducting the procedure. A video or audio tape recorded during the procedure shall be attached to the report. (7) If a duly summoned person does not follow the summons, and does not justify his/her absence, or if the summons cannot be duly served for the reason that the taxpayer is avoiding to receive the summons, the person shall be detained with the assistance of the Ministry of Interior.

Service of documents

Article 18

(1) Tax documents shall be considered served when handed over to the taxpayer, his/her legal representative, his/her proxy for tax affairs or his/her ex officio representative, and in the case of state bodies, enterprises, and other legal persons even when handed over to a person in charge of admission of documents, or in his/her absence, to another person who is in any way whatsoever authorized for receiving documents. (2) In case a taxpayer is a physical person, i.e. an entrepreneur, tax documents shall be considered served even if handed over to a member of the household who is of age, or to a person employed with the respective entrepreneur. (3) Persons referred to in Paragraph 1 of this Article shall be served, in person, via postal services or a courier service using a delivery note. (4) Service of documents shall also be deemed regular, for the purpose of this Law, in case the persons referred to in Paragraph 1 of this Article refuse to receive or sign tax doc-uments, if the person serving the documents prepares and official note thereabout. (5) Notwithstanding Paragraph 3 of this Article, tax documents can be served to the taxpayer electronically, accordingly to regulations governing e-business.

Evidence Article 19

(1) Facts pertaining to tax procedure shall be established by the means of evidence. (2) Evidence shall include tax declaration, business books and records, accounting

statements, business documentation and other documents and information the Tax Administration disposes with and which are collected from the taxpayer or from third parties, testimonies, findings and opinions of court experts, inspections, and any other means of evidence, which can serve to establish facts.

(3) An official in charge of tax procedure shall independently decide which facts in the procedure shall be established and by which means of evidence, taking into account the cost-effectiveness and efficiency of the procedure. (4) Minutes shall be produced pertaining to presentation of evidence and shall make an integral part of the tax audit report.

Tax Base Estimation Article 19a

(1) In case the facts used as basis to determine tax base cannot be ascertained through ev-idence referred to in Article 19 of this Law, Tax Administration can use estimation to de-termine the tax base. (2) At own discretion and keeping in mind efficiency and effectiveness of the procedure, Tax Administration shall decide which method or methods would be used to estimate the tax base. (3) Upon Tax Administration’s proposal, the Minister shall issue a book of rules to establish the terms, the methods, and the procedure for estimation of tax base.

Tax Base Estimation Method

Article 19b (1) Tax base estimation shall be made through: (a) estimation based on available and proper business documentation pertaining to a specific period of time shorter than the taxation period (daily, weekly, or monthly), by way of using the data on the particular portion of business operations as basis for tax base estimation for the period subject to tax assessment, (b) estimation based on data and facts on turnover (daily, weekly, or monthly), established through inspection or audit, by way of using such data and facts as basis for tax base estimation for the period subject to tax assessment, (c) comparison against data of other taxpayers engaged in the same or similar line of business, at the same or similar location, under relatively equal conditions, and (d) based on available and proper business documentation, if it is in place, and is not entered into accounting records.

Estimation of Personal Income Tax Base Article 19c

(1) Notwithstanding Article 19b of this Law, tax base estimation shall be used to determine the personal income tax base, as the difference between the value of taxpayer’s property at the end and at the beginning of a calendar year, minus the amount of declared

income, and/or the value of property obtained as inheritance, gift, or in another legal and free-of-charge manner, and/or the amount of income subject to annual personal income tax-ation, for which the taxpayer, i.e., another person declares and provides adequate material ev-idence. (2) Property referred to in Paragraph 1 of this Article shall include: (a) real estate (house, apartment, commercial building and premises, garage, land, and such like), (b) stocks and shares in a legal person, (c) equipment used for business, (d) motor vehicles, vessels, and aircrafts, (e) savings deposits and cash, and (f) other property rights. (3) Value of property at the beginning of a calendar year shall be the sum of total value of property as of 01 January of the calendar year. (4) Value of property at the end of calendar year shall be the sum of total value of property as of 31 December of the calendar year, plus the value of property assessed by Tax Administration, which has been obtained or abominated throughout the calendar year, subject to charges or free-of-charge, and plus the funds the taxpayer used to purchase the property on behalf of third parties throughout the calendar year. (5) If the taxpayer, i.e. another person points out that certain property, i.e., assets have been obtained by way of inheritance, gift, or in another legal and free-of-charge manner, they shall provide adequate material evidence thereof. (6) Tax base assessed in line with this Article shall constitute undeclared income. (7) Undeclared income shall be taxed as other income, accordingly to the law governing personal income tax, not admitting the standard expenses.

IV REGISTRATION OF TAXPAYERS

Place and manner of registration Article 20

(1) Tax Administration shall register taxpayers. (2) Taxpayers are required to register with the Tax Administration in the place, at the

time, and in the manner laid down in this Law, and other regulations governing the procedure of registration of businesses in Republic of Srpska.

(3) Registration with the Tax Administration shall, at the same time, constitute registration with the Unified system for contribution payers.

(4) The registration application shall include the Taxpayer’s Identification Number, the taxpayer’s principal place of business, the location of the taxpayer’s books and records, as well as other relevant information supplied in the registration form, unless stipulated otherwise under specific regulations.

(5) Taxpayer – legal person and organization shall, in the attachment to the application for registration, submit to the tax authority a decision on court registration with attachments, and the taxpayer – entrepreneur shall submit a decision on registration issued by an authorized body, as well as other documents prescribed under the law and bylaw, unless stipulated otherwise under specific regulations.

(6) The contribution payers shall during registration submit along with the registration form the evidence pertaining to the origin of obligation for payment of contributions.

(7) Deregistration of the Taxpayer Identification Number (TIN) shall be performed up-

on taxpayer’s request, following the payment of all tax liabilities.

Taxpayer Identification Number Article 21

For the purpose of identification of taxpayers, the Tax Administration shall, in

registration procedure, issue to taxpayers the Taxpayer Identification Number (TIN).

Persons obliged to hold the TIN Article 22

(1) The following persons shall be required to have the Taxpayer’s Identification

Number: а) legal person or another entity seated in the Republic,

b) foreign legal person or organization producing income in Republic of Srpska, c) natural person who does not have permanent or temporary place of residence in Bosnia and Herzegovina, but produces income in the Republic, d) natural person – entrepreneur, e) branch office of a foreign legal person in the Republic, and f) branch offices of legal persons seated in the Federation of Bosnia and Herzegovina and Brcko District. (2) Business unit of a foreign legal person shall mean a business unit as defined under

provisions of regulations governing corporate income tax. (3) Business unit referred to in Paragraph 2 of this Article shall be subject to the

provisions of this law pertaining to legal persons, unless prescribed otherwise by this law. (4) Natural person, i.e. taxpayer with permanent place of residence in the Republic

shall register with the Tax Administration using the citizen’s personal identification number, or the Tax Administration shall assign to him/her the Personal Identification Number (hereinafter: the PIN).

Obligation to enter TIN Article 23

(1) The person required under tax legislation to submit a declaration, statement or oth-

er document to tax bodies shall include in the declaration, statement or other documents the Taxpayer Identification Number.

(2) Unless otherwise provided in tax legislation, a Taxpayer Identification Number shall be the unique and sole number of the respective taxpayer for all taxes and all tax surcharges.

Business units, representation offices, principal places of business Article 24

(1) A Republic of Srpska legal person, an organization or an entrepreneur whose principal place of business is in the Republic shall register with the Tax Administration organizational unit within whose jurisdiction such principal place of business is located.

(2) Principal place of business, within the meaning of Paragraph 1 of this Article, shall be the place of business designated by the respective taxpayer as the principal place of business. (3) A Republic of Srpska legal person or an organization whose principal place of business is outside the Republic of Srpska shall register with the Head Office of the Tax

Administration. (4) A separate organizational unit of a Republic of Srpska legal person or an organization shall register with the organizational unit of the Tax Administration within whose jurisdiction the principal place of business and the separate organizational unit is located. (5) A representation office of a foreign legal person or an organization in the Republic shall register with the organizational unit of the Tax Administration within whose jurisdiction the principal place of business of the representation office is located. (6) Provisions of Paragraphs 1, 2, 3, 4, and 5 of this article shall apply unless stipulated otherwise under specific regulations

The registration application Article 25

(1) The application for taxpayer’s registration referred to in Article 20 of this Law shall be submitted to the Tax Administration within eight days from the date of registration with appropriate bodies in charge of registration of legal persons and other entities, i.e. entrepreneurs. (2) If the taxpayer fails to file the registration application within the period stipulated under Paragraph 1, the Tax Administration will conduct an ex officio registration, if it possesses information pertaining to effective obligation to register. (3) If the taxpayer referred to in Article 24 of this Law changes its principal place of business, ownership structure, or company organisational or legal form, that taxpayer shall be obliged to notify the Tax Administration respectively, in writing, within eight days. (4) If a taxpayer referred to in Article 24 of this Law changes its principal place of business and the new principal place of business is within the jurisdiction of a different organizational unit of Tax Administration, then the taxpayer shall notify the Tax Administration respectively within eight days, and the tax Administration’s organisational unit shall, ex officio, conduct the registration with the organisational unit located at the territory of the new principal place of business of the taxpayer.

Registration of Real Estate with the Fiscal Register

Article 25a

(1) Tax Administration organizes and manages the fiscal register of real estate in line with this Law and regulations governing the taxation of real estate. (2) Taxpayers shall register their real estate with the fiscal register based on real estate registration forms. (3) In case a taxpayer fails to register his/her real estate, Tax Administration shall register it ex officio.

The Unified System registration application

Article 26

(1) Application for registration with the Unified System shall be filed by the employer, within eight days from the date of start of employment.

(2) Voluntary payer of contributions shall register with the Tax Administration in line with the place of residence, within eight days from the date of start of insurance.

(3) Contribution payers not listed under Paragraphs 1 and 2 of this Article shall register with the Unified System within eight days following the day of accrual of obligation to pay

contributions. (4) Notwithstanding Paragraph 1 of this Article, the application for registration with

the Unified System may be filed by the contributor if the payer of contributions fails to do so upon expiry of deadline referred to in Paragraph 1 of this Article, in manner and under conditions set under this Law.

Deregistration of taxpayer

Article 27

(1) Tax Administration shall deregister the taxpayer, upon the taxpayer’s request, following a tax audit and after establishing the fact that the respective taxpayer has paid all his/her tax liabilities.

(2) The tax audit procedure referred to in Paragraph 1 of this Article shall commence no later than ten days from the day of receipt of taxpayer’s deregistration request.

(3) The Tax Administration shall deregister a contributor in line with the declaration of the contribution payer, after it establishes that all liabilities in reference to contributions have been paid for the respective contributor.

(4) Notwithstanding Paragraph 3 of this Article, the Tax Administration shall conduct an ex officio deregistration of a contributor from the Unified System, or upon the contributor’s request in the following cases:

a) when the contribution payer has ceased its business operations based on a decision document issued by the competent body, and has failed to submit the deregistration declaration, and

b) upon the contributor’s personal request if he/she holds a legally justified interest in doing so in line with the law, regardless of the fact whether the contribution payer has paid all the liabilities pertaining to contribution for the respective contributor.

Obligation to provide data

Article 28

(1) Agency competent for registration of businesses, local self-governance body, or another body performing registration of entities engaged in business activities shall provide to the Tax Administration, within five days following the date of registration, entry of change, or re-registration, an information pertaining to registration, deletion, i.e. entry of any change into respective register.

(2) An administrative body keeping the data on permanent or temporary place of residence, or birth or death of natural person shall inform the Tax Administration respectively within five days from the date of registration of permanent or temporary residence, or birth or death of a natural person.

(3) Conditions and manner used in the procedure of identification and registration of taxpayers, as well as forms used for registration, shall be prescribed by the Minister by means of a rulebook, upon the proposal of the Tax Administration Director.

Opening of an account for the taxpayer

Article 29

Bank or another organization performing payment transactions (hereinafter: the bank) may open an account for the taxpayer, i.e. legal person, part of a legal person, or an entrepreneur, only if the taxpayer provides the proof of registration of the taxpayer.

V PROCEDURE FOR FILING AND ASSESSMENT OF TAX LIABILITIES

Tax Declaration definition and filing

Article 30

(1) Tax declaration constitutes the taxpayer’s report to the Tax Administration pertaining to income produced, expenditures incurred, profit, property, and other facts and documents relevant to establish the tax liability.

(2) A taxpayer shall file a tax declaration, on a prescribed form within legally established deadline in line with regulations prescribing the obligation to pay a specific type of tax, to the organizational unit of the Tax Administration with which the taxpayer is registered.

(3) A taxpayer, or the taxpayer's legal representative or proxy, shall sign the tax declaration. If the declaration or a part of it was prepared by some other qualified person, then the qualified person shall also sign and enter his/her Identification Number.

(4) Tax declaration shall be filed within a prescribed deadline, directly, by mail or in an electronic format, in manner prescribed under a rulebook issued by the Tax Administration Director, with the consent of the Minister.

(5) The tax declaration shall be deemed received by the Tax Administration on the date the declaration was sent by registered mail.

Extension of deadline for filing of tax declaration Article 31

(1) At a taxpayer’s request filed before expiration of filing deadline, the Tax

Administration may extend the period for the submission of a tax declaration for justifiable reasons (sickness, absence abroad, an accident, Force Major, and such like), until such reasons stay in effect, and no longer than up to three months from the day of expiry of legal deadline for filing.

(2) The Tax Administration shall decide on the request for extension of filing period within five days from the day of filing of the request.

(3) The extension of filing period shall not affect the due date for payment of the tax liability.

Amended tax declaration Article 32

(1) A taxpayer may amend a previously filed tax declaration in order to correct an

error or omission made in the original tax declaration, no later than three months following the expiration of the year in which the declaration is filed.

(2) Filed tax declaration cannot be amended once the tax audit procedure has been completed for the period to which the tax declaration pertains.

Specific declarations Article 33

(1) An information declaration is a report that a taxpayer is required to file with the

Tax Administration in which he/she provides information related to the payment of tax or oth-er information necessary for the execution of tax legislation, and conditions and manner of

filing shall be prescribed under tax legislation. (2) Withholding tax declaration is a report that a tax agent is required to file with the

Tax Administration providing information related to liabilities withheld and paid. (3) Tax agent shall deliver a copy of the declaration referred to in Paragraph 2 of this

Article to the person for whom the taxes have been withheld and paid. (4) A taxpayer may also amend the declarations referred to in Paragraphs 1 upon

expiry of the respective filing deadline in order to correct errors or omissions in the originally filed declaration.

Due date and payment of tax liability Article 34

(1) The liability shall be considered due on the date determined by tax legislation.

(2) Tax liability shall be paid directly by the taxpayer, except in cases where this law or another piece of tax legislation prescribes that another person shall be responsible for payment of tax liability of the respective taxpayer.

(3) Tax liability shall be paid in line with manner and procedure prescribed under this law, and with the payment of tax liability a person shall be relieved of the responsibility for that liability.

(4) Provisions pertaining to tax liability shall apply to other surcharges as well, except if provided otherwise under his law.

(5) A third party may also pay the tax liability on behalf of the taxpayer.

Payment of liability by tax agent Article 35

The liability, which, in accordance with tax legislation, the tax agent is obliged to pay,

shall be the tax agent’s liability from the moment he/she collects it from the taxpayer

Responsibility of a legal successor Article 36

(1) Tax liability of a legal person or another entity liquidated due to status changes

shall be settled by its legal successor in line with regulations governing the operations of enterprises.

(2) Deadline for payment of tax liability of a legal person liquidated due to status changes shall not change once the settlement of the liability has been transferred to its legal successor.

(3) Changes to legal form of a legal person shall not affect the payment of tax liability.

Responsibility of an heir Article 37

(1) The liability of a deceased individual (testator) shall be paid by each of his/her heirs

proportionally to the amount of his/her share in inherited property. (2) In case there are several heirs, they shall be jointly liable for the debts of the

testator, namely each proportionally to the amount of his/her share in inherited property. (3) If the inherited property is insufficient for payment of the total amount of tax

liability of the testator, the unpaid amount of the tax liability shall be written off.

Related persons Article 38

(1)The following persons shall be considered as related persons: (a) members of the taxpayer’s family; and (b) the person that controls, is controlled by, or is under common control with the

taxpayer. (2) A taxpayer’s family referred to in Paragraph 1, Item (a) of this Article includes the

taxpayer’s spouse, relatives in direct ascending and descending family line, brothers and sisters, adopted persons and their descendants that live in a common household with the taxpayer.

(3) Control referred to in Paragraph 1, Item (b) of this Article means the ownership, either directly or through one or more legal persons of at least 50% in value of property or at least 50% voting power of shareholders in the legal person concerned. During the control, the person shall be considered as owning all shares owned directly or indirectly by members of his/her family.

(4) Related person shall be liable for the obligations of the respective taxpayer in cases where it is established that tax liability cannot be collected from the taxpayer in any of the legally prescribed methods.

Assessment of tax liability

Article 39 (1) An assessment of liability constitutes the entering, into the Tax Administration

records, of the amount of tax obligation of a taxpayer stated in his/her tax declaration. (2) The tax declaration referred to in Paragraph 1 above shall become an enforceable

document upon expiration of a legal deadline for payment of tax liability reported herein. (3) Assessment of tax liability shall constitute an operation referring to establishment

of an individual tax liability, of a taxpayer, a tax base, and the amount of tax liability. (4) Notwithstanding the provisions of Paragraph 1 of this Article the Tax

Administration shall record the tax liability following the issuance of a decision document pertaining to payment of tax liability.

(5) In pursuance of the enforceable document referred to in Paragraph 2 of this Article the Tax Administration shall initiate and conduct an ex officio enforced collection procedure in line with the provisions of this law.

Decision document for payment of tax obligation

Article 40

(1) By means of a decision document for payment of tax obligation, the Tax Administration shall order the taxpayer to pay the assessed tax liability, within 30 days following the enforceability of the decision document.

(2) The decision document referred to in Paragraph 1 of this Article shall not be issued for liabilities reported in pursuance of Article 39, Paragraphs 1 and 2 of this law.

(3) If two or more taxpayers are jointly and severally liable for the payment of the liability, then a decision document for payment of the tax obligation shall be issued to each of these taxpayers, whereas the payment of the entire obligation may be executed by either of them.

Suspension of tax obligation Article 41

(1) Suspension of tax obligation shall be subject to: а) payment or substitute for payment in line with the law, b) collection of tax, c) statute of limitation on assessment and collection of tax liability, d) tax write-off, and e) in other manner prescribed under law. (2) Payment of taxes and surtaxes shall be made to prescribed accounts in line with the

Minister’s regulations.

VI PAYMENT OF TAX OBLIGATION

1. Regular Collection of Taxes

Article 42

(1) Tax collection, for the purpose of this law, shall be the regular and the enforced collection.

(2) Regular tax collection implies payment of tax liability in the prescribed deadline or deadline established under the decision document for payment.

(3) Enforced collection shall be undertaken upon expiration of the legal deadline for payment of reported tax liabilities or upon expiration of the payment deadline established under an enforceable decision document referred to in Article 40 of this law.

(4) Provisions pertaining to tax collection shall also apply to collection of tax surcharges.

Payment modalities Article 43

(1) Payment of tax obligation shall be made via bank through transfer of funds to the

prescribed public revenue accounts in line with deadlines established under tax legislation. (2) Notwithstanding the provisions of Paragraph 1 of this Article, tax obligation can be

paid for the purpose of reconciliation by means of the following: а) purchase of fee stamps or other securities containing the tax obligation, b) barter, in line with tax legislation, c) conversion of tax debt into share in ownership, in line with special law, d) transfer of seized property to the Republic following enforced collection, and e) other prescribed modalities.

Day of payment of tax obligations

Article 44 (1) Day of payment of a tax obligation shall be the day on which a payment of the tax obligation was received in the appropriate account. (2) A day is considered to be a day of payment if on that day a bank received a transfer order from the taxpayer to transfer funds from the taxpayer’s account to the

appropriate account, provided there are sufficient funds in the taxpayer’s account and the bank shall be authorized to transfer the funds to the appropriate accounts. (3) In line with its legal authority a bank shall execute the funds transfer order for the purpose of payment of tax obligation for as long as there are sufficient funds in the account of the respective person. (4) Transfer order for payment of obligation shall be executed by the bank within one business day from the day of receipt of the transfer order.

Order of payment of tax obligations Article 45

(1) A taxpayer shall designate, for the purpose of payment, the type of tax obligation or surcharge to be paid, without making a notation as to which period the payment refers. (2) Designated payments shall be applied in the following order: firstly, amount of tax as per due date starting from the earliest obligation due, followed by amount of interest to the liability. (3) For enforced collection procedure, the order of allocation of collected amount shall be the following: costs of procedure, contributions, principal debt, and amount of interest.

Temporary assurance for collection of tax obligations Article 46

(1) For the purpose of assurance of collection of tax obligation, the existence of which

is belike, and where danger exists that the taxpayer will elude, i.e. procrastinate the collection, the Tax Administration may establish temporary measures to secure the collection by means of a Conclusion.

(2) The Conclusion referred to in Paragraph 1 of this Article becomes enforceable up-on delivery to the taxpayer and shall also include a rationale as to the Tax Administration’s reasons for believing that a danger exists that the taxpayer might elude the collection of due tax obligation.

(3) The measures of assurance for the purpose of this law shall include: а) injunction of disposal over movable property, effectuated by means of delivery of

the Conclusion on measure of assurance to a body in charge of register of movable property, for the purpose of registration of the injunction with the adequate register of movable property,

b) injunction of disposal over immovable property, effectuated by means of delivery of the Conclusion on measure of assurance to a body in charge of register of immovable property, for the purpose of registration of the record with the adequate register of immovable property, and

c) blocking the taxpayer’s account by means of delivery of the Conclusion on measure of assurance to a bank, which is enforced as prescribed under the Conclusion.

VII REGULAR COLLECTION OF TAX OBLIGATION – deleted as per Changes and Amendments published in the “Official Gazette of Republic of Srpska”, no. 67/13 of 8 August 2013.

Payment notice Article 47

(1) Taxpayer failing to fully or partly file or pay the tax obligation following the due date shall receive from the Tax Administration a notice pertaining to type and amount of due tax liability or surcharge, serving as caution to file or settle due tax obligation. (2) Notice referred to in Paragraph 1 of this Article shall be sent via regular mail, e-mail or telephone, and if sent via telephone, the official of the Tax Administration shall make an ex officio note thereabout and enclose in the case file.

Deferred payment of due taxes Article 48– deleted as per Changes and Amendments published in the “Official Gazette of

Republic of Srpska”, no. 67/13 of 8 August 2013.

Guarantee for deferred payment of due taxes Article 49– deleted as per Changes and Amendments published in the “Official Gazette of

Republic of Srpska”, no. 67/13 of 8 August 2013.

Repeal of deferral of payment of due taxes Article 50– deleted as per Changes and Amendments published in the “Official Gazette of

Republic of Srpska”, no. 67/13 of 8 August 2013.

Tax interest Article 51

(1) For the amount of tax obligation, which has not been paid by due date, the taxpayer

shall pay an interest calculated at the daily rate of 0,03%, including other obligations subject to deferral in line with the provision of a special Law.

(2) The interest is charged starting with the next day, as of the due date, until the day of payment of tax obligation, and for the overpayment, as of the day of expiration of refund deadline.

(3) Tax Administration shall calculate interest in all documents ordering payment of tax obligations, including the interest calculated until the final due date for payment subject to decision document on deferral.

Positive interest Article 52

(1) In case the Tax Administration has to refund the overpaid obligation, it shall calculate and pay an interest to the taxpayer in line with Article 51, Paragraph 1 of this Law, for the period starting from expiry of 30 days as of the date of refund claim until the day of payment of refund. (2) Advance tax payments, as well as obligations withheld by tax agents, shall not be considered paid before the due date of the obligation subject to payment. (3) Overpayment of an obligation used to offset another obligation shall be considered refunded on due date of the obligation subject to offset.

Guarantee for receivables – legal mortgage Article 53

(1) In case a taxpayer fails to pay the tax obligation by the legally due date or the due date established under enforceable decision document on assessment, the Tax Administration shall initiate the procedure for imposing legal mortgage over taxpayer’s real-estate in favor of

Tax Administration, as guarantee for payment of tax obligations following the expiration of due date. (2) Legal mortgage shall arise as of the day of registration with the real-estate register and shall continue until payment of tax obligations. (3) Tax Administration has the right and an obligation to collect tax obligations in court procedure using the value of real-estate subject to mortgage. (4) Tax Administration collects, ex officio, all relevant information pertaining to existence of property, which can be used as lien, i.e. mortgage, by way of submission of requests for information to competent bodies and organizations in charge of public registers of taxpayers’ property, and by way of listing of property, if necessary, in line with this law.

2. Enforced Collection of Taxes

Definition and initiation of enforced collection procedure Article 54

(1) Enforced collection procedure shall be undertaken by the Tax Administration, ex

officio, upon expiration of due date for payment of reported tax obligation or upon expiration of due date for payment as stipulated under an enforceable decision document on assessment of tax liability.

(2) Tax Administration undertakes the enforced collection for all taxes and surtaxes under its competence as stipulated under tax legislation, as well as enforced collection arising from an enforceable document of another body, in case the law standing as basis for issuing the respective document stipulates that Tax Administration is in charge of enforced collection procedure.

(3) Tax Administration undertakes the enforced collection procedure along the provisions of this law and its respective bylaws.

(4) Tax Administration issues the decision document on enforced collection. (5) Decision document referred to in Paragraph 4 of this Article, in addition to

information prescribed under the Law on General Administrative Procedure, contains the information pertaining to the basis of tax obligation, appellation of document subject to en-forcement, the amount of unpaid tax obligation with interest calculated as of the due date until the date of issue of the decision document, and the amount of costs of procedure, i.e. it contains the amount of fine to be enforced and the amount of costs of procedure.

(6) An appeal can be filed to the Ministry against the decision document on enforced collection, within 15 days as of the day of delivery of the decision document.

(7) An appeal against the decision document on enforced collection cannot dispute the legality of the executable document

(8) Tax Administration shall not issue a decision document on enforced collection, if the taxpayer has filed a motion for deferral or conversion of tax obligation in line with a special law Law, until the motion has been decided upon.

Termination of enforced collection Article 55

(1) Enforced collection procedure shall be terminated in case a bankruptcy or

liquidation procedure has been initiated for the respective taxpayer. (2) In cases referred to in Paragraph 1 of this Article the Tax Administration shall issue a conclusion on termination of enforced collection procedure.

Suspension of enforced collection Article 56

(1) Enforced collection procedure shall be suspended if:

а) an enforceable decision document for payment or a decision document on enforced collection is made void, or if a decision document for payment is replaced with a new one, b) a taxpayer subsequently pays the debt, including the costs incurred and referred to in Article 59, Paragraph 1 of this law, c) deferral or conversion of tax obligation is approved to a taxpayer in line with the provisions of a special Law, and d) deferred payment of tax liability is approved to a taxpayer by a competent body.

(2) In cases referred to in Paragraph 1 of this Article, the Tax Administration shall issue a conclusion on suspension of enforced collection procedure.

Exemption due to cost-effectiveness Article 57

(1) Enforced collection shall not be undertaken in cases where the costs of procedure

exceed the amount subject to enforced collection. (2) Enforced collection shall be undertaken to the extent required for settlement of the

entire amount of tax obligations.

Exemption of cases in enforced collection Article 58

Property and earnings of physical persons, exempted from enforcement in line with the

regulation governing executive procedure, cannot be subject to enforced collection.

Costs of enforced collection Article 59

(1) Costs of enforced collection shall be paid by the taxpayer and shall be 5% to the

amount of tax obligation collected in the procedure. (2) The taxpayer shall not be exempted from payment of enforced collection costs

referred to in Paragraph 1 of this Article if he/she pays the tax obligation after initiation of enforced collection.

(3) The costs of enforced collection shall be paid to the enforced collection account kept by the Tax Administration.

Assets and means in enforced collection Article 60

(1) Enforced collection shall be undertaken against a taxpayer by way of individual

means, i.e. assets as follows: а) monetary funds – cash, by way of seizure, i.e. requisition of monetary funds - cash, b) monetary funds held in accounts, by way of transfer of monetary funds from the taxpayer’s account to the enforced collection account and by engaging the bank

keeping the taxpayers account to execute the transfer, c) monetary receivables of a taxpayer, including his/her salary receivable, pension, and other personal income, by way of transfer of the taxpayer’s receivable from his debtor and by engaging the debtor to pay the transferred receivable to the enforced collection account, d) securities, by way of seizure of securities and engaging of an organization managing the securities to sell them at the best market terms and to pay the proceeds from sale of securities to the enforced collection account after deducting the sales commission and costs, e) all movable assets of the taxpayer, by way of seizure, i.e. requisition and sale of movable assets of the taxpayer, i.e. by way of transfer of property to the Republic, f) non-monetary claims of the taxpayer (claims over goods, equipment, other movable assets), by way of transfer of the non-monetary claim from the taxpayer’s debtor to Tax Administration, i.e. by engaging the debtor to deliver the goods and assets subject to claim to the issuer of the decision document on transfer of claim, g) real-estate, by way of registration of lien (mortgage) over taxpayer’s real-estate, and filing of the proposal for enforcement to the court by way of sale of real-estate and payment of proceeds of the sale to the enforced collection account, and h) other property of the taxpayer, by way of seizure and conversion into cash.

(2) In case the taxpayer’s debtor fails to pay to the enforced collection account the receivables subject to transfer referred to in Paragraph 1, Item c of this Article, and pays it to the taxpayer directly, Tax Administration shall issue a decision document for enforced collection of tax obligation from the taxpayer’s debtor’s assets in the amount of transferred receivables. (3) Schedule and purpose of funds pertaining to enforced collection expenses shall be established by Government Decree.

Enforcement of overpaid tax obligation Article 61

(1) Tax Administration shall also be authorized for enforcement of decision documents

on approval of refund for overpayment to taxpayers when tax creditors, i.e. public revenue beneficiaries obliged to refund the overpaid amount fail to act in pursuance to executive decision document of Tax Administration on approval of refund of overpayment.

(2) Enforcement referred to in Paragraph 1 of this Article shall be effectuated over monetary funds of the refund payer held in a bank account by way of transfer of adequate amount of money to the account of a taxpayer entitled to refund of overpaid liability and by engaging the bank to perform the transfer.

Third party claims in enforced collection

Article 62

(1) Third party claiming the title or lien over entire or part of seized movable assets may file a request to Tax Administration to exempt the respective assets from enforced collection assets.

(2) Together with the request referred to in Paragraph 1 of this Article, the third party is obliged to submit evidence of entitlement to assets subject to exemption request.

(3) Third party may file the request referred to in Paragraph 1 of this Article until the day of sale of assets subject to the third party’s receivable, i.e. until the day of transfer of the assets to the Republic.

(4) The sale or transfer of the assets to the Republic, in cases referred to in Paragraph 1 of this Article, shall be postponed until the third party procedure ends.

List of movable assets Article 63

(1) Tax official shall be authorized to enter the grounds and premises in which the taxpayer performs the business activity for the purpose of listing of movable assets to be seized. (2) While entering the grounds or business premises of the taxpayer, the tax official is obliged to identify him/herself and present to the taxpayer an official document ordering the listing and seizure of movable assets. (3) In case the taxpayer disallows the tax official to enter the apartment or another area for the purpose of listing, assessment, and seizure of movable assets located in the respective apartment or another area, the Tax Administration shall file a motion to the competent court to issue a decision document allowing the tax official to enter the apartment or another area against the possessor’s will.

(4) The enforceable decision document of Tax Administration referred to in Articles 40 and 54, Paragraph 4 of this law, is to be filed along with the motion referred to in Par-agraph 3 of this Article,

(5) Listing of movable assets referred to in Paragraph 1 of this Article shall be conducted in the presence of two adult witnesses.

(6) In the process of listing and seizure, advantage shall be given to assets most easily exchanged for cash.

Assessment of movable assets Article 64

(1) Assessment of listed assets shall be conducted by tax official during listing, in line

with the provisions of the rulebook regulating the terms and procedure of assessment and seizure of movable assets in enforced collection procedure, issued by the Minister upon the proposal of the Tax Administration Director.

(2) Tax Administration may designate another professional as an assessor or obtain a report on price of assets from professional institutions or organizations.

(3) Listed movable asset shall be seized at the moment of listing. (4) Report shall be produced in reference to listing, seizure, and assessment made. (5) Report referred to in Paragraph 4 of this Article shall be delivered to the taxpayer. (6) Taxpayer is entitled to object to the report referred to in Paragraph 4 of this Article

within three days following the delivery of the report. (7) Enforced collection shall be postponed until the objection procedure is resolved

and a decision document issued thereupon. (8) An appeal stated against the decision document referred to in Paragraph 7 of this

Article shall not delay its enforcement. (9) Seizure of movable assets shall be conducted with the assistance of authorized

officials of the Ministry of Interior.

Sale of movable assets Article 65

(1) Movable assets shall be sold by way of an open public competition (hereinafter: the

auction), with at least two bidders, and in cases stipulated under this law, by way of direct bargain between the buyer and Tax Administration, whereupon a conclusion shall be issued. (2) Movable assets shall be sold at sight. (3) If the movable asset is perishable or if the keeping thereof implies high costs, Tax Administration shall sell it by way of direct bargain, forthwith, at a price no lower than 50% of the assessed value of the asset. (4) Announcement of sale of seized movable assets shall be published no later than three days following the assessment of their value, in one daily newspaper distributed throughout Republic of Srpska territory, and on the Tax Administration’s web site. (5) The taxpayer, employees of the Tax Administration, and their related persons cannot buy assets referred to in Paragraph 1 of this Article.

Auction price Article 66

(1) At the first auction, a movable asset cannot be sold at a price lower than 75% of its assessed value, and the start price shall be in the amount of assessed value of the asset. (2) In case the movable asset is not sold at the first action, the second one shall be set and scheduled, no later than eight days following the first auction. (3) At the second auction, a movable asset cannot be sold at a price lower than 50% of its established assessed value. (4) In case the movable asset is not sold at the second action as well, the third one shall be set and scheduled, no later than eight days following the second auction. (5) At the third auction, a movable asset cannot be sold at a price lower than one-third of its assessed value.

Transfer of sold movable assets Article 67

(1) Following the sale of seized assets, Tax Administration shall issue to the buyer, following the payment, a sales receipt confirming that the right of property is thereunder transferred to him/her and that the legal grounds for obtaining such right is the purchase of goods subject to enforced tax collection procedure. (2) Sale of seized goods shall be stopped once the achieved price reaches the amount of tax liability owed, and the remaining goods shall be returned to the taxpayer. (3) In case the auction sale of seized goods fails as well as direct bargain, the goods shall be transferred to the property of the Republic in line with a decision document. (4) A report shall be compiled on auctions and direct bargains.

Transfer of property to the Republic Article 68

In case of transfer of property over movable assets to the Republic, for the purpose of

settlement of tax liabilities, the tax liability subject to enforced collection shall be deemed settled by one-third of the assessed value of goods.

Taxpayer’s insolvency Article 69

(1) In case it is established, during enforced collection, that the taxpayer does not possess property to cover for the tax debt by way of enforced collection, i.e. that the assets

thereof to be transferred to the Republic are of lower value than the amount of tax debt, Tax Administration shall establish the taxpayer’s temporary insolvency by way of a decision doc-ument.

(2) Insolvency referred to in Paragraph 1 of this Article shall be subject to review, no later than one year following the issuance of the decision document, and should the taxpayer subsequently become solvent the Tax Administration shall abolish the decision document on insolvency and continue the enforced collection procedure. IX OTHER INSTANCES OF TERMINATION OF TAX OBLIGATION

Statute of Limitation for assessment and collection of tax obligation Article 70

(1) Tax obligation assessment by way of Tax Administration’s decision document may

be conducted within the period of five years as of the day of filing of tax declaration, i.e. as of the due date of tax liability, counting from the later date.

(2) Claim pertaining to imputation of overpayment into payment of future obligation, or to refund of overpaid obligation may be filed within the period of three years as of the day of receipt of notice on overpayment of tax obligations.

(3) Assessed liability may be collected by way of enforcement or in court procedure in case the enforcement measures or the court proceedings have been initiated within the period of three years as of the due date for payment of the reported tax obligation or as of enforceability of the decision document on payment of tax.

(4) Deadline referred to in Paragraph 1 of this Article shall cease as of the day of commencement of tax liability assessment procedure and shall endure continuously, regardless of the length of duration of administrative proceedings, an administrative dispute, or another procedure the outcome of which may be the repetition of the first-level procedure of tax liability assessment under Tax Administration’s decision document.

Statute of limitation in relation to third parties and limitation of refund of overpayment Article 71

Statutes of limitation referred to in Article 70, Paragraphs 1 and 3 of this law shall also

apply to parties responsible for the taxpayer’s obligations, and deadline specified in Paragraph 2 of the same Article shall apply to the party obliged to refund the overpayment.

Termination of limitation and absolute limitation

Article 72

(1) Statue of limitation for enforced collection shall be terminated by way of any action undertaken by the Tax Administration against tax debtor for the purpose of securing or collecting taxes and surcharges. (2) Following termination, statute of limitation shall restart, and the time lapsed prior to termination shall not be included in the legal deadline for limitation.

(3) Restarted limitation following a termination shall mature upon expiry of limitation period for assessment and collection of tax, as stipulated under this law.

(4) Tax Administration’s right to collect tax obligations shall reach the statue of lim-itation, in any case, upon expiry of six years as of the due date for payment of reported tax lia-bility or as of date of enforceability of the decision document for payment.

(5) Notwithstanding the statue of limitation prescribed under this law, the Tax

Administration’s right to assess and collect pension and disability insurance contributions shall not be subject to statue of limitation.

Imputing the time of predecessor

Article 73

The period of statute of limitation shall include the time lapsed in favor of the taxpayer’s predecessor, i.e. a predecessor of the person liable for the taxpayer’s obligations, or a predecessor of the refund payer.

Ex officio establishment of limitation Article 74

(1) Officials in charge of the first and the second level of tax appeals shall manage the

limitation ex officio. (2) In case a statue of limitation is established for certain obligations, Tax

Administration shall write-off such obligations in full.

Overpayment notification Article 75

(1) Tax Administration shall notify the taxpayer about the overpayment no later than 30 days as of the day of payment of tax amount constituting overpayment. (2) The notification shall include the total amount of the overpayment, the amount of the overpayment which shall be automatically deducted from another liability and the amount of the overpayment which can be deducted from the future tax obligation or refunded to the taxpayer.

Automatic deduction by way of overpayment

Article 76 (1) If established that the taxpayer has other outstanding liabilities, the overpaid amount shall be automatically deducted from other due liabilities, and the taxpayer shall be notified respectively. (2) The amount of the overpayment, which has been automatically deducted under Paragraph 1 of this Article shall be treated as paid on the date of the payment that resulted in the overpayment. (3) If some other obligation of the taxpayer exceeds the amount of the overpayment, then the amount of the overpayment shall be used to satisfy that obligation in the manner laid down in Article 45 of this Law.

Refund of overpaid amount of tax

Article 77 (1) If the total amount of the overpayment, which is to be automatically deducted from some other liability, exceeds the amount of the liability, the taxpayer may use the excess overpayment for the satisfaction of future obligations or to receive a refund of the excess overpayment. (2) Tax Administration shall decide on refund request for the purpose of Paragraph 1 of this Article within 30 days from the receipt of the request.

X TAX AUDIT

Definition Article 78

Tax audit is the procedure of examination and determination of lawfulness and

correctness of reporting and payment of tax obligation, conducted by authorized officials of the Tax Administration.

Tax auditors Article 79

(1) Authorized officials of Tax Administration shall be the auditors of Tax Administration, obliged to hold an official identification and a badge, and tax officials holding official identifications, the design and procedure of issuance of which shall be prescribed by the Tax Administration Director upon the Minister’s consent.

(2) The legal-labor status of auditors shall be subject to general regulations governing legal-labor status of civil servants in the administrative bodies of the Republic.

(3) The work of an auditor can be performed by a person who, in addition to general and specific terms of employment of civil servants in administrative bodies of the Republic, has at least:

а) two years of experience in the profession or one year of experience in inspection work – for the post of junior auditor, b) three years of experience in the profession and two years of experience in inspection work – for the post of auditor, and c) four years of experience in the profession and three years of experience in inspection work – for the post of senior auditor. (4) Except in cases referred to in Article 6 Paragraph 2 of this law, the Tax

Administration auditor shall be held responsible for a severe violation of professional duties if he/she fails to undertake measures or actions he/she is obliged to undertake in conduct of inspectional surveillance (audit).

Rights and obligations of auditors

Article 80 In conduct of inspectional surveillance, the Tax Administration auditors shall have the right and the obligation to:

а) check the business premises in which books, records, or other items necessary for implementation and execution of tax legislation are kept, or supposedly kept, and to review books and records, b) seize, in the manner provided for in legislation, copies of books and records or oth-er items necessary for the implementation and execution of tax legislation,

c) conduct hearing of parties and witnesses in a procedure, d) order adequate measures and actions, i.e. ban certain activities, in order to establish facts and provide for collection of tax obligations, e) notify the taxpayer about the audit, unless such a notification would impede the success of an audit,

f) identify him/herself to taxpayer subject to audit, i.e. to a responsible person or another authorized person of the taxpayer subject to audit, g) inform the taxpayer subject to audit about his/her rights in audit, h) produce an audit report, i) issue a repossession certificate for temporarily or permanently repossessed doc-umentation, objects, or other items, j) file a report to the competent Prosecutor’s Office in case that in tax audit procedure reasonable doubt occurs of criminal act having been perpetrated, and k) undertake other measures and actions they are legally authorized for.

Types of audit

Article 81

(1) Tax Administration shall conduct audit in its official premises (hereinafter: the desk audit), or field audit.

(2) Desk audit shall last no longer than five business days starting from the date designated in the audit order.

(3) Field audit shall last no longer than 15 business days as of initial date, designated in the specific audit order, and it can exceptionally be extended for ten additional business days, pending the decision of the manager of organizational unit of Tax Administration competent for the taxpayer subject to audit.

(4) Conditions and manner in which audit shall be conducted shall be prescribed under a rulebook issued by the Tax Administration Director with the consent of the Minister.

Audit plan Article 82

(1) Tax audit shall be executed in line with annual and monthly plans, i.e. emergency plan, issued by the Tax Administration Director, and based on taxpayer’s risk assessment. (2) During definition of plan referred to in Paragraph 1 of this Article, the assessment shall be made as to the impact of tax audit to tax collection efficiency in certain business activities. (3) Notwithstanding the Paragraph 1 of this Article, the Minister can demand the Tax Administration Director to issue an emergency audit plan in case of assumptions implying an increased volume of tax avoidance.

Desk audit Article 83

(1) Desk audit constitutes a set of actions whereby Tax Administration checks the

accuracy, completeness, and conformity of data stated in tax declaration, accounting and other reports of the taxpayer with the law, i.e. other legislation.

(2) Desk audit shall be performed by tax auditor in the Tax Administration’s premises, based on audit order.

(3) If, during desk audit, irregularities are established in reference to assessment and payment of tax obligations the auditor shall prepare a report thereon.

(4) Taxpayer shall be entitled to object to the report, within three days following the receipt of the desk audit report.

(5) Tax auditor shall examine the objections referred to in Paragraph 4 of this Article within three days, and shall amend the report respectively.

(6) Pursuant to the original, i.e. amended audit report, the tax auditor shall without delay issue a decision document, and no later than eight days following the delivery of the report, i.e. amended report the taxpayer.

Taxpayer’s obligation in desk audit Article 84

(1) Taxpayer shall upon demand of the Tax Administration take part in desk audit

procedure, directly or by way of a proxy, and shall provide the requested explanations and documentation within deadline determined by Tax Administration.

(2) Contempt of demand referred to in Paragraph 1 of this Article shall not delay desk audit.

Field audit Article 85

(1) Field audit constitutes a set of actions whereby Tax Administration checks the

legality and correctness of taxpayer’s compliance with tax obligations. (2) Field audit shall be conducted by tax auditor, based on audit order. (3) The taxpayer shall be notified about the audit, no later than three days prior to start

of audit. (4) Notwithstanding the Paragraph 3 of this Article, the Tax Administration Director

may order an audit without prior notification, if he/she evaluates that a doubt exists as to any kind of disconcertment of an announced audit, or if announcement of audit may significantly impact the assessment and payment of tax.

Field audit venue Article 86

(1) Field audit shall take place in the business premises of the taxpayer or another ven-

ue, subject to the scope of audit. (2) Taxpayer shall provide for an adequate venue for the work of tax auditor, in case

the field audit is conducted in the taxpayer’s business premises. (3) In case an adequate venue cannot be provided in the taxpayer’s business premises

for the conduct of field audit, the audit can be performed in another venue designated by the Tax Administrator in line with Paragraph 1 of this Article.

Time of audit

Article 87

Field audit shall be conducted during office hours of the taxpayer and the Tax Administration and, exceptionally, after office hours, if the audit has started during office hours and if required so by the scope of audit, provided the taxpayer’s consent.

Rights and obligations of taxpayers in field audit Article 88

(1) Taxpayer has the right and the obligation to take part in the establishment of facts

and provide explanations and statements at the request of tax auditor. (2) Taxpayer shall enable the tax auditor to inspect the status of raw material,

reproductive material, semi-products, end products and goods (hereinafter: the goods), and equipment, as well as the business books and records, and other documentation or documents.

(3) If unable to be present at the time of field audit, the taxpayer shall designate a person who shall on his/her behalf perform the obligations in pursuance of Paragraphs 1 and 2 of this Article.

(4) The taxpayer’s failure to comply with the provisions of Paragraphs 1 and 2 of this Article shall not postpone the field audit.

(5) Tax auditor may demand data, i.e. insight into documentation, from the taxpayer’s employees or other individuals as well.

(6) Tax auditor shall verbally state the demand referred to in Paragraph 5 of this Article.

(7) Individuals referred to in Paragraph 5 of this Article shall provide to tax auditor all available data, i.e. documentation.

Field audit report

Article 89

(1) Tax auditor shall compile a field audit report, the pages of which must be marked with ordinal numbers, and each page shall be signed both by the tax auditor and by the taxpayer.

(2) The report referred to in Paragraph 1 of this Article shall clearly and unequivocally state all the facts established during audit, executed evidence, reasons for assessment of tax obligations, as well as all other relevant information and actions conducted during the course of field audit.

(3) The field audit report shall be delivered to the taxpayer within three days following the completion of audit, an the taxpayer shall be entitled to object to it within three days following the receipt of the report.

(4) In case the objection contains new evidences and facts, implying changes to the state of the facts established under the report, or changes to previous findings, the tax auditor shall make an amendment to the report respectively.

Tax obligations established under a decision document of the Tax Administration Article 90

(1) If established in the course of field audit that the taxpayer has, in self-assessment of

tax obligations, failed to apply or has incorrectly applied the regulations, a decision document on payment of tax obligations referred to in Article 40 of this law shall be issued, in pursuance of the audit report, i.e. amended audit report.

(2) Tax auditor shall issue the decision document referred to in Paragraph 1 of this Article, within eight days from the day of delivery of the field audit report, i.e. amended field audit report.

(3) Any proceedings arising from the decision document referred to in Paragraph 1 of this Article shall be subject to provisions of Articles 54 through 70 of this law. XI LEGAL REMEDY PROCEDURE

Appeal against Tax Administration’s decision document

Article 91

(1) A taxpayer shall have the right to file an appeal against the Tax Administration decision document within 15 days following the day of delivery of the decision document.

(2) An appeal shall not postpone the execution of a decision document on payment of reported liabilities and on enforced collection, whereas the execution of other decision doc-uments shall not be postponed only if prescribed so under this law.

Second-level procedure Article 92

(1) An appeal against the decision document of the Tax Administration shall be

decided upon by the Ministry in line with the provisions of this law and of regulations governing the general administrative procedure.

(2) An appeal shall be stated before the Ministry via first-level instance, in line with regulation governing the general administrative procedure.

XII SUPERVISION AND PENAL PROVISIONS

Administrative supervision Article 93

The Ministry shall supervise the provisions of this law.

Violations of the taxpayer – legal person

Article 94

(1) Tax payer – legal person or another entity shall be penalized with the fine ranging from 1.000 to 3.000 KM if:

а) fails to register with the Tax Administration or fails to register within prescribed deadline and in manner prescribed for registration of taxpayers with the Tax Administration register (Article 14, Item а), b) fails to file tax declaration or fails to file it in the manner and within deadline prescribed under tax legislation (Article 14, Item c), c) fails to keep business books and records in line with tax legislation (Article 14, Item

f), d) disallows the tax official to enter the premises in which the taxpayer performs the business activity, for the purpose of listing and seizure of movable assets, in the pro-cess of enforced collection (Article 63, Paragraph 1), e) fails to participate in the process of desk audit upon Tax Administration’s notice, fails to provide the requested explanations or to submit all documentation necessary for the process of desk audit as requested by the auditor (Article 14, Item k) and Article 84, Paragraph 1), f) fails to participate in the process of field audit upon Tax Administration’s notice, fails to provide the requested explanations or to submit all documentation necessary for the process of field audit as requested by the auditor (Article 14, Item k) and Article 88, Paragraphs 1 and 2), g) fails to provide to tax auditor an adequate venue to conduct field audit (Article 86, Paragraph), and h) obstructs Tax Administration officials in conduct of their legally established duties (Article 14, Item l). (2) Responsible person, in a legal person, shall also be penalized with the fine ranging

from 500 to 1.500 KM for violation referred to in Paragraph 1 of this Article.

Violations of the taxpayer – natural person Article 95

(1) ) Tax payer – natural person-entrepreneur shall be penalized with the fine ranging

from 500 to 1.500 KM for violation referred to in Article 94, Paragraph 1. (2) Tax payer – natural person shall be penalized with the fine ranging from 500 to

1.500 KM for violation referred to in Article 94, Paragraph 1, Items а), b), and e).

Violation of obligation to file, calculate, and pay the tax obligation Article 96

Tax payer who fails to file, calculate, or timely pay the due tax obligation shall be

penalized with the fine amounting to 20% of the assessed tax obligation (Article 14, Items c) and d).

Violation of a bank Article 97

(1) A bank shall be penalized with the fine ranging from 10.000 to 30.000 KM if it: а) opens an account for the taxpayer without duly submitted registration certificate of the Tax Administration (Article 29), b) fails to block the taxpayer’s account in pursuance of the conclusion on temporary assurance issued by the Tax Administration (Article 46, Paragraph 3, Item c), and c) fails to execute transfer of funds in line with the Tax Administration order in enforced collection procedure (Article 4, Paragraphs 3 and 4, Article 60, Item b), and Article 61, Paragraph 2). (2) A responsible person in the bank shall also be penalized with the fine ranging from

1.000 to 3.000 KM for violation referred to in Paragraph 1 of this Article.

Violations of other responsible persons Article 98

(1) A legal person shall be penalized with the fine ranging from 5.000 to 15.000 KM if

it: а) fails to transfer receivables of its debtor to the enforced collection account, in enforced collection procedure initiated against the debtor, in line with the Tax Administration’s order (Article 60, Item c), b) fails to sell and transfer the proceeds from sale of securities in line with the Tax Administration’s order (Article 60, Item d), and c) in line with the decision document on transfer of receivables, fails to deliver the goods and other items, constituting the receivables, to the Tax Administration in line with the Tax Administration’s order (Article 60, Item f). (2) A natural person shall also be penalized with the fine ranging from 1.000 to 3.000

KM for violation referred to in Paragraph 1 of this Article.

Violations of bodies in charge of registers Article 99

A body keeping the registers of business entities, as well as that of physical persons,

shall be penalized with a fine ranging from 1.000 to 3.000 KM, if it fails to report, or to timely report to the Tax Administration any relevant change in its respective records or registers (Article 28, Paragraphs 1 and 2).

XIII INTERIM AND FINAL PROVISIONS

Article 100

In the event that by the effective date of this Law, the Tax Administration has issued a first-instance tax document, the procedure ensuing from such document shall be completed in line with the provisions of the Law on Tax Administration, which was in effect at the time the respective document had been issued.

Article 101

Agreements and decision documents on settlement of due tax obligations, entered into and issued before the effective date of this Law, shall be executed in line with the provisions of the Law on Tax Administration, which was in effect at the time of entering into an Agreement or issuing of a decision document.

Article 102 If the tax liability has been assessed, i.e. made subject to a decision document of the

Tax Administration, with enforceability date preceding the effective date of this Law, such liabilities shall be subject to statute of limitation prescribed under the Law on Tax Administration, which was in effect on the date of enforceability of the decision document, i.e. on the commencement date of the statute of limitation.

Article 103

(1) Within 90 days following the effective date of this Law, the Government shall issue a Decree on conditions, manner, and procedure for deferral of tax obligations referred to in Article 48, Paragraph 10 of this law, and shall appoint the members of the Tax Board referred to in Article 13 of this law.

(2) Within 90 days following the effective date of this Law, the Minister shall issue: а) the Rulebook pertaining to form, contents, manner, and conditions for preparation and publishing of the Tax Administration Work Report (Article 7, Item l), b) the Rulebook pertaining to conditions and procedure for set up of data base and cat-egorization of risky contribution payers in the Unified System (Article 10, Para-graph 9), c) the Rulebook on conditions and manner of registration and identification of taxpayers (Article 28, Paragraph 3), and d) the Rulebook on conditions and procedure for assessment and seizure of movable assets in enforced collection procedure (Article 64, Paragraph 1). (3) Within 90 days following the effective date of this Law, the Tax Administration

Director shall issue: a) the Rulebook on the manner of filing of tax declarations (Article 30, Paragraph 4),

and b) the Rulebook on conditions and manner of conduct of tax audit (Article 81, Par-

agraph 4). (4) Until the documents referred to in Paragraphs 1 and 2 of this Article have been

issued, the bylaws issued in pursuance to the Law on Tax Administration shall apply, unless contradictory to this law.

Article 103a

(1) Within 60 days following the entry into force of this Law, the Government shall issue a Decree on schedule and purpose of funds pertaining to expenses of enforced collection procedure (Article 60, Paragraph 3). (2) Within 90 days following the entry into force of this Law, the Minister shall issue a book of rules setting forth the terms, the method, and the procedure for estimation of tax base (Article 19a, Paragraph 3)

Article 103b

Provisions of a special law governing the modalities for tax debt servicing shall apply to tax debt deferral procedures initiated in line with the Law on Tax procedure of Republic of Srpska (“Official Gazette of republic of Srpska”, no. 102/11 and 108/11)

Article 104

With this law taking effect, the Law on Tax Administration shall be void (“Official Gazette of Republic of Srpska“, no. 51/01, 74/04, 2/05, 96/05, 75/06, 112/07 – Consolidated text, 22/08 and 34/09).

Article 105

This Law shall be published in the “Official Gazette of Republic of Srpska”, and shall take effect on 1 January 2012.

No: 01-1415/11, 01-1674/13 CHAIRMAN 23/09/2011, 18/07/2013 OF THE NATIONAL ASSEMBLY Banja Luka MSc Igor Radojičić s.r.