Notice to foreign providers for services provided in B&H electronically!
The Indirect Tax Administration (ITA) has published an information for all foreign entities that they are obliged to register with the ITA, if they provide digital services in Bosnia and Herzegovina or offer services that are performed electronically, based on the applicable value added tax (VAT) provisions. After registration, they are required to calculate and pay VAT at the standard rate of 17% for services provided to individuals (consumers) in the territory of Bosnia and Herzegovina (BiH).
Pursuant to the applicable legislation, for services provided electronically to individuals who are not registered for VAT in BiH and have a permanent address, i.e., residence in BiH, the place of provision of these services is considered to be BiH and VAT should be calculated and paid in BiH at the standard rate of 17%.
The ITA hereby informs foreign providers of electronic services that the settlement of tax obligations must be performed by registering an organizational presence through which the activity is carried out in BiH or by appointing a tax representative in BiH. The obligation to register arises from the very moment of carrying out an economic activity in BiH that exceeds the VAT threshold of 50,000.00 BAM, since suppliers of such services are legally obliged to register for VAT if they perform taxable turnover in BiH exceeding the threshold.
Failure to comply with tax obligations pursuant to current legislation and conducting economic activities in BiH without adequate tax registration is subject to monetary fines. Therefore, we encourage all service providers, who provide their services electronically, to register with the ITA for VAT and fulfill tax obligations in accordance with applicable legislation.
We especially point out that the ITA is currently, in accordance with their powers, reviewing and identifying all foreign entities that provide the services on the territory of BiH, and upon completion of these actions, ITA will publish data on entities and types of services that these entities perform without being entered/registered in the Unified register of indirect taxpayers.
T: +387 (0)33 277 560
M: +387 (0)61 796 067