Bosnia and Herzegovina: Business Environment

Accounting Rules

Tax Year: From 1st January to December 31st.
Accounting Standards: Bosnia and Herzegovina applies the international accounting standards (IAS/IFRS).
Accounting Regulation Bodies: Coordination Board of the Audit Institutions - ensures harmonized audit standards of all the public auditing institutions in the country
The Supreme Office for the Republic of Srbska Public Sector Auditing
Audit Office for the Institutions of the Federation of Bosnia and Herzegovina
Accounting Reports: Annual financial reports include:
-Balance sheet
-Income statement
-Cash flow statement
-Statement on changes in equity and
-Notes to financial reports.
Publication Requirements: Legal entities have the obligation of storing into the register and disclosing financial reports. Legal subject submits its accounting statements semi-annually and annually. Semi-annual balance statement has to be turned in by the end of July, while the annual balance statement has to be submitted by the end of February.
Professional Accountancy Bodies: Association of accountants, auditors and financial workers in Federation of BiH , (in local languages only) - a professional association of accountants and auditors of the Bosnian-Croat part of the country.
Association of accountants and auditors in Republika Srpska , (in local language only) - a professional association of accountants and auditors of the Serbian part of the country.
Certification and Auditing: Auditing of financial statements shall be performed by persons with professional title of authorised auditor, who possess a licence for work on financial statements auditing tasks and who are employed in or engaged by an auditing company.

Office for Auditing of the financial operations of the institutions of BiH - is an independent body responsible for government and public sector auditing in all the country. For a list of private licenced auditing companies in the Bosnian-Croat part of the country (Federation of Bosnia and Herzegovina - FBiH) see the left-side panel link called "Drustva za reviziju" at the Federal Ministry of Finance. See the following link for a list of licenced auditors in the Serbian part of the country. One of the leading domestic private companies for auditing (with a website in English as well) is called Revsar. You can also contact an external auditor: PricewaterhouseCoopers, KPMG, Deloitte.
Accounting News: Einnews Bosnia and Herzegovina

Tax Rates

Consumption Taxes

Nature of the Tax: Value Added Tax (VAT) or in local language: Porez na dodatu vrijednost (PDV).
Tax Rate: 17%
Reduced Tax Rate: Certain transactions are exempt, including certain public services, health and medical services and financial services. Other transactions (mainly exports of goods) are zero rated.
Other Consumption Taxes: There are excise taxes on oil products, tobacco products, soft drinks, alcohol drinks and coffee.

Learn more about Service Providers in Bosnia and Herzegovina on Globaltrade.net, the Directory for International Trade Services.

Corporate Taxes

Company Tax: 10%
Capital Gains Taxation: Capital gains are taxed as profit at the usual rate.
Main Allowable Deductions and Tax Credit: In the Federation of Bosnia and Herzegovina: deductions for depreciation, for expenses related to the realized revenue (representations costs; humanitarian, cultural, educational, scientific costs; for membership fees to the chambers; sponsorship), for expenditures of reservation for risks and expenditures.
In Republika Srpska: deductions for depreciation; cost of entertainment, meals etc. linked to the economic activity; contributions to Public Institutions, humanitarian, cultural and educational organizations; sponsorship expenses; scholarships to students; bad debts and reserves; payment of foreign profit tax.
Other Corporate Taxes: Real property tax, social security contributions, real estate transfer tax.

Individual Taxes

Tax Rate

Income tax (Federation of Bosnia and Herzegovina and BrÄko District)	10% from BAM 3,600 annually.
Income tax (Republika Srpska)	8%

Allowable Deductions and Tax Credit: In Republika Srpska: personal deduction, deductions for dependant familly members, for interest paid on mortgage loan, and for additional pension insurance.

In the Federation of Bosnia and Herzegovina: Personal deduction, deductions for dependant familly member, for interest paid on mortgage loan, and for premium paid on life insurance.
Special Expatriate Tax Regime: There is no special tax regime for expatriates.

Double Taxation Treaties

Countries With Whom a Double Taxation Treaty Have Been Signed: See the list of double Taxation Agreements signed by Bosnia and Herzegovina (Bosian language only).
Withholding Taxes: Dividends: 10%, Interest:10%, Royalties: 10%
Bilateral Agreement: Bosnia and Herzegovina and Egypt are not bound by a Double Taxation Agreement.

Sources of Fiscal Information

Tax Authorities: Indirect Taxation Authority of Bosnia and Herzegovina
Tax Administration of Federation of BiH
The Tax Administration of the Republic of Srpska
Other Domestic Resources: Tax information on the Foreign Investment Promotion Agency (FIPA) website

Learn more about Taxes and Accounting in Bosnia and Herzegovina on Globaltrade.net, the Directory for International Trade Services.

Intellectual Property

National Organizations: The Institute for Intellectual Property.

National Regulation and International Agreements

Type of property and law	Validity	International Agreements Signed
Patent Industrial Property Law, 2002	20 years or 10 years (short-term), may be extended in some cases for up to additional 5 years
Trademark Industrial Property Law, 2002	10 years (renewable for indefinite number of times)	Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks
Design IIndustrial Designs.	10 years
Copyright Law on copyright and related rights, 2002	70 years after author's death	WIPO Copyright Treaty

Legal Framework

Independence of Justice: The legal system of Bosnia and Herzegovina is not very independent.
Equal Treatment of Nationals and Foreigners: Since the Constitution is based on the peace agreement signed in 1995 with a great help of international community (especially USA and EU), citizens of Bosnia and Herzegovina enjoy the greatest human rights protection standards - in theory. In practice, in a survey made among local experts from different areas (justice, economy, society, media etc.) in late 2005, more than three quarters of respondents had confidence in the legal system . In the same survey, more than half of the respondents evaluated the equality of citizens to justice and fair court procedure as being low .
The Language of Justice: Any of the official languages: Bosnian, Srbian or Croat.
Checking National Laws Online: Legislation Database

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Standards

National Standards Organizations: BAS, Institute for Standardization of Bosnia and Herzegovina.
Integration in the International Standards Network: The Institute for Standardization of Bosnia and Herzegovina is a full member of International Organization for Standardization (ISO) since 1997 and European Institute for Standards in Telecommunications (ETSI). It is also an associate member of International Electrotechnics Commission (IEC), European Committee for Standardization (CEN), and of European Committee for Standardization in Electrotechnics (CENELEC) .
Classification of Standards: BAS + an acronym of appropriate international standard (ISO, IEC, CEN etc.).
Online Consultation of Standards: For the list of published standards in Bosnia and Herzegovina see the catalogue.
Certification Organizations: BATA Institute for Accreditation of Bosnia and Herzegovina

Business Practices

General Information: USA Commercial Service
Opening Hours and Days: The most usual working hours in offices are from 8h to 16h from Monday to Friday and in production plants from 7h to 15h. However, shops and banks are usually open either from 7h or 8h until 19h or 20h from Monday to Friday and from 8h to 13h on Saturdays.

Public Holidays

New Year	1st and 2nd January
Republic Day - in Republic Srpska only	9th January
International Labor Day	1st and 2nd May
Victory over fascism Day - in Republic Srpska only	9th May
Bosnia Peace Treaty Day - in Republic Srbska only	21st November
Catholic Christmas	25th and 26th December
Orthodox Christmas	7th and 8th January
Catholic Easter	Good Friday
Orthodox Easter	Good Friday
Muslim Kurban Bairam	2 days
Muslim Ramadan Bairam	2 days
Independence Day - in Muslim-Croat Federation only	1st March
National Holiday - in Muslim-Croat Federation only	25th November

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