Bosnia and Herzegovina’s Corporate Income Tax Bill under review

Bosnia and Herzegovina/September 2015

In accordance with the conclusions by the House of Peoples of the Federation of B&H arising from the session held on 15.07.2015, the Federal Ministry of Finance has opened a public debate on the Draft of the Law on Corporate Income Tax.

Public consultations of the Law are opened until October 31 2015.

All interested parties were invited to submit their comments and proposals on the Draft of the CIT Law to the Federal Ministry of Finance.

The draft of the CIT Law addresses changes in the following aspects:

– Tax base (including the adjustment of expenses, income adjustments, capital gains and losses, tax loss);

– Taxation of company reorganizations and liquidation (status changes of the tax payer; tax treatment of the liquidation);

– Avoidance of double taxation;

– Tax incentives (for new employments and scholarships);

– Assessment and collection of income tax (including definition of the tax period and the tax return procedure);

– Transfer pricing (new methods for determining transfer prices which occur in the transfer between related parties regulated by the OECD model);

– Tax penalties

Even though the above-mentioned aspects of the CIT Law are currently under review, the CIT rate will remain set at 10%.

The reason for the adoption of a new Law on Corporate Income Tax is primarily to improve the former legal solutions. The amendments will be aimed correcting the deficiencies identified during the application of this Law which led to uncertainty and issues with compliance with other legislation in the country.

Igor Vujasinovic
Banja Luka Office /B&H