Tax
State-level indirect taxes with entity-level income taxes
Indirect taxation is unified at state level: a single VAT and customs regime administered by the Indirect Taxation Authority. Direct taxes on income and profits, by contrast, are set and collected by each entity.
Key rules
- VAT is a single state-level tax administered by the Indirect Taxation Authority.
- Personal and corporate income taxes are legislated and collected by the entities.
- Social contributions differ significantly between the two entities.
Governing law
- Value Added Tax Act of BiH
- Entity Income Tax and Profit Tax Acts
In practice
The split means one VAT return but two possible direct-tax regimes, so establishment location has a material tax effect.