VAT- Value Added Tax
Just recently, January 2006, Bosnia and Herzegovina has introduced Value added tax. The VAT rate in BIH is unique and the rate is 17%. It is applied equally to both entities in BIH. Entities are eligible taxpayer of VAT if they are a legal entity and have turnover in goods and services equal or expected to exceed the amount of BAM 50,000,00 (app. EUR 25,000,00) in 2005.
No VAT rate (0%) is applied to the turnover of goods and services in:
Ø Post services,
Ø Medical services and social insurance,
Ø Education services,
Ø Financial and cash services,
Ø Lease of apartments or business property,
Ø Insurance and reinsurance,
Ø Trading of securities, management of Investment Funds, banking services
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Foreign (Non-resident)
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BIH(Resident)
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Interest income:
|
Legal Entities
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Private individual
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Legal Entities
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Private individual
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RS
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FBiH
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RS
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FBiH
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RS
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FBiH
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RS
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FBiH
|
|
Government Bonds/T-Bills
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N/A
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N/A
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N/A
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N/A
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Corporate Bonds
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N/A
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N/A
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N/A
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N/A
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Dividend income:
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Cash
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0%
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15%
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0%
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15%
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0%
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15%
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0%
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15%
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May be reduced by double tax treaty (see table)
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May be reduced by double tax treaty (see table)
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In form of shares
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Ratios are decided by the issuer
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Not practiced in the market
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Ratios are decided by the issuer
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Not practiced in the market
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Ratios are decided by the issuer
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Not practiced in the market
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Ratios are decided by the issuer
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Not practiced in the market
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Country
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Dividends
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Interest
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Royalties
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Croatia
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5 / 10
|
10
|
10
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Serbia and Montenegro
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5 / 10
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10
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10
|
|
Slovenia
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5 / 10
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7
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5
|
|
Moldavia
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5 / 10
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10
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10
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Pakistan
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10
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20
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15
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United Kingdom; North Ireland
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5 / 15
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10
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10
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Netherlands
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|
|
|
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Sweden
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5 / 15
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|
|
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Finland
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5 / 15
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|
10
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Cyprus
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|
|
|
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Italy
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10
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10
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10
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|
Germany
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|
|
|
|
Norway
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15
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10
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Hungary
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|
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Egypt
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|
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Belgium
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|
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Poland
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Slovakia
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|
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Romania
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|
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France
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|
|
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Denmark
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5 / 15
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10
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Iran
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|
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*If the recipient company holds at least 25% of the paying company, the lower of two rates shown applies.
Countries with double taxation treaties at different stages of parliament procedures:
|
Country
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Dividends
|
Interest
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Royalties
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Greece
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5 / 15
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10
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10
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Czech Republic
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5
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10
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UAE **
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5 / 10
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5
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Jordan
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5 / 10
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10
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10
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Malaysia***
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5 / 10
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10
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8
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Macedonia
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5 / 15
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10
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10
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Spain***
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5 / 10
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7
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7
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Russia
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5 / 15
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10
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10
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Austria
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5 / 10
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5
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5
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Katar
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5 / 15
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7
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5
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Turkey
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5 / 15
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10
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10
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Kuwait
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|
|
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Byelorussia
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|
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There are no taxes on capital gain in Federation of BIH.
Tax rate for dividend payments in FBIH is 15 %. This rate applies to residents and non residents (private and legal entities). Residents receive gross dividend and they are obliged to file for taxes with tax authorities in FBIH. Non residents receive net dividend and they are responsible for declaring themselves for reclaiming the tax.