Tax treaty between Bosnia & Herzegovina and Poland

Bosnia & Herzegovina/October 2015

On 14 October 2015, the House of Peoples of Bosnia and Herzegovina (Upper House of the Parliament) approved the Tax Treaty signed between Bosnia & Herzegovina and Poland. The treaty was signed in June of 2014 and ratified by Poland on 8 April 2015.

The taxes to which this Treaty applies include the tax on income of individuals and the tax on profit of enterprises (in Bosnia and Herzegovina) and in case of Poland, the personal income tax and the corporate income tax.

Per the Treaty, the withholding tax charged on dividends shall not exceed 5% of the gross dividend amount (in case of 25% participation) or 15% of the gross amount (all other cases). In regards to withholding tax on interests, the Treaty stipulates a tax rate of 10% and the same rate has been set for withholding tax on royalties.

Article 22 of the Treaty defines the method of avoiding double taxation. To prevent double taxation, Bosnia and Herzegovina will allow a deduction from taxes in amount equal to the tax paid in Poland (not exceeding the amount of taxes calculated in Bosnia before such deduction is granted).

Given that both countries have ratified the Agreement, it will be effective as of 2016. With it becoming effective, the 1985 Agreement (concluded by Poland and the Socialist Federal Republic of Yugoslavia, which is still applicable) will be terminated.

Igor Vujasinovic
Eurofast Global, Banja Luka Office /B&H
Tel.: +387 51 961 610
+387 51 961 610