Taxes and contributions

Direct taxes and contributions

Tax policy in the Republic of Srpska is among the most stimulating in the region.

Year of 2020 RS FBiH Serbia Croatia Montenegro North Macedonia
Income tax rate 10% 10% 10%, 20%, 30% 24% on the tax base up to HRK 360 000, 36% on the part of the tax base that exceeds HRK 360 000 9% and 11% on the amount of income above the average monthly gross earnings realised in the previous year 18% on the tax base over MKD 90 000 per month, 10% on the part up to 90 000 MKD
Non-taxable part of income (in euros) 255 153 129 513 0 123
Dividend tax rate 20% 12% 9% 10%
Income tax rate 10% 10% 15% 12% (for revenues up to HRK 3 000 000) and 18% (for revenues equal to or greater than HRK 3 000 000.01) 9% 10%
Cumulative contribution rate to gross salary 32,8% 41,5% 37,05% 36,5 34,5 27%

Direct taxes are the sole responsibility of the Entities and the Brčko District.

  • free trade area
    The uniform income tax rate is 10%.
  • free trade area
    Income tax in the Republic of Srpska is calculated at a rate of 10%.
  • free trade area
    Real estate tax - Each local self-government unit determines the real estate tax rate on its territory and it can amount to a maximum of 0.20%. Exceptionally, the tax rate for real estate in which the production activity is directly performed is up to 0.10%.

Detailed information on taxes and tax legislation in the Republic of Srpska is available on the website of the Tax Administration of the Republic of Srpska

The cumulative contribution rate in the Republic of Srpska is 32.8% of gross salary, of which: 18.5% is allocated for pension and disability insurance, 12% for health insurance, 1.7% for child protection and 0.6% for unemployment insurance.

Indirect taxes

The VAT rate of 17% is among the lowest in Europe.

Indirect taxes include value added tax (VAT), excises (special taxes paid on petroleum products, tobacco and tobacco products, soft drinks, alcohol, alcoholic beverages and natural fruit brandy, beer and wine, coffee), tolls, customs duties.

Customs

Customs regulations are implemented uniformly in BiH. The customs tariff contains a rate range of 0-15%. The Indirect Taxation Authority of BiH is responsible for collecting all customs duties. There are 4 main regional centers for customs clearance of goods in BiH: Customs Office Banja Luka, Customs Office Sarajevo, Customs Office Tuzla and Customs Office Mostar. Border crossings: Novi Grad, Kostajnica, Kozarska Dubica, Gradiška, Brod, Šamac, Rača, Popovi (Pavlovića most), Karakaj, Klobuk, Deleuša, Vardište, Zupci, Uvac, Ivanica, Bratunac, Donja Gradina. Customs crossings: Novi Grad, Kozarska Dubica, Gradiška, Brod, Rača, Popovi (Pavlovića most), Karakaj, Klobuk, Deleuša, Vardište.

The signing of the Stabilisation and Association Agreement enabled the free export of almost all goods to the EU that meet the standards, and at the same time gradually opened the BiH market for EU goods according to the dynamics agreed in the annexes and protocols that are part of this Agreement.

BiH is also a signatory to the CEFTA Free Trade Agreement with the countries: Albania, Montenegro, Macedonia, Moldova, Serbia and UNMIK / Kosovo. The CEFTA agreement replaces, but also supplements the existing free trade agreements with individual countries in the region. This enables greater transparency and rules of the game closer to EU standards, as well as access to a market of around 30 million people. Also, the Free Trade Agreement with Turkey, the Preferential Trade Agreement with Iran, and the Free Trade Agreement with the EFTA countries (Switzerland, Liechtenstein, Norway and Iceland) were signed.

Indirect taxes as well as customs policy are the responsibility of the joint institutions of BiH. More information is available on the website of the Indirect Taxation Authority of BiH.