Bosnia and HerzegovinaBosnia and HerzegovinaTaxes and Co.Taxes and Co.

Ika Ferrer Gotic, dipl. ecc.Ika Ferrer Gotic, dipl. ecc.Business Analyst & TV PresenterBusiness Analyst & TV Presenter

AgendaAgenda

01 Political structure02 Tax system structure: Tax divisions03 Basic features of Tax system04 Tax Laws05 Tax system development trends

Political StructurePolitical Structure

Bosnia & Bosnia &

Herzegovina

Herzegovina

Year 1995: Dayton Agreement

Tax divisions (1/2)Tax divisions (1/2)

VAT, customs duties, excise,fees for roads,...

Taxes on profits, income, assets,property income, gifts,...

Pension and health insurance,unemployment insurance,...

Tax divisions (2/2)Tax divisions (2/2)

indirect

taxes

indirect

taxes

admin.

admin.direct taxes

direct taxes

admin.

admin.

direct taxes

direct taxes

admin.

admin.

direct taxes

direct taxes

admin.

admin.

Basic featuresBasic features

complexed (specific constitutional order); tax laws and executive bodies at multiple levels; divided competence of tax authorities; affiliation of taxes and contributions; disharmonized; incompatible with the systems of other countries in the region.

Tax system structureTax system structure

The tax system in Bosnia and Herzegovina is based on the regulations that are adopted at different levels of decision making:

State of Bosnia and Herzegovina; Entities - Federation and RS; Brcko District; Cantons and municipalities within Federation

Tax laws at the State levelTax laws at the State level• Law on Indirect Taxation System in B&H;• Law on Indirect Taxation Administration;• Law on Indirect Taxation Procedure;• Law on Enforced collection procedure;• Law on Customs Policy of B&H;• Law on Customs violations;• Law on Customs Tariff of B&H;• Law on Value Added Tax;• Law on Excise Duties in B&H;• Law on Payments to the Unified Account and income distribution.

Tax laws at the Federal levelTax laws at the Federal level

• Law on Federal Tax Administration;• Law on Profit Tax;• Law on Income Tax;• Contributions Act;• Law on the Unified system of registration, control and contributions collection;• Law on Fiscal systems;• Law on Games of Chance Law on Rate of penalty interest on the public income.

Tax laws at the RS levelTax laws at the RS level• Law on Tax procedure of Republic of Srpska;• Law on Profit, Income and Contributions Tax;• Law on Fiscal cash registers;• Law on Real estate;• Law on Property tax;• Law on Games of Chance;• Law on Taxes on use, possession and carrying goods;• Law on Pension / Disability and health insurance;• Regulations on the Unified system of registration, control and contributions collection.

Tax laws at the Cantonal Tax laws at the Cantonal levellevel• Laws on Property taxes, inheritance and gifts;• Law on Tax on Turnover of real estate and rights.

Tax on Income in B&HTax on Income in B&H

Tax on Profit in B&HTax on Profit in B&H

Development trends (1/3)Development trends (1/3) Developed countries have an income oriented tax system (with a dominant share of taxes on profit and income), but as the global economic crisis manifested itself, consumption taxes (VAT) are being increased, especially in the EU; 

Transition countries - more consumer orientation;

Development trends (2/3)Development trends (2/3)B&H in the overall structure of taxes and contributions on the state level:

46%46%

45%45%9%9%

Development trends (3/3)Development trends (3/3) Increasing participation of direct taxes in total tax structure that results into growth of the economy; 

B&H has showed results that lead to the revenue growth from direct taxes, as a result of a number successfully implemented tax reforms in direct taxation;

Investing in IT is crucial.

What kind of Tax system What kind of Tax system we wantwe want

Unique / unified - at the state level (long-term solution); Simple - with fewer tax administration; Harmonized at the level of the Entities and BD; Harmonized with the EU tax system; Compatible with systems of other countries.

info@fpu.gov.bainfo@fpu.gov.baThank you!Thank you!