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VAT Registration of established Branch Offices of foreign legal entities

Tax Alert, June 2013

The recent changes in the Republika Srpska tax and company act provisions have enabled the establishment of branch offices of foreign legal entities.

This means that a foreign legal entity can establish a branch office within the territory of Republika Srpska, enter the branch office into the competent commercial court registry and obtain a tax ID for that branch office.

Please note that the obtained tax ID is issued directly to a branch office by the Tax Authority of Republika Srpska and can be used only for direct tax reporting purposes (e.g. corporate income tax, personal income tax, etc.).

Based on the opinion of the Indirect Tax Authority of BiH (ITA), registration for VAT purposes (i.e. obtaining VAT ID) cannot be granted directly to a branch office, but it can be obtained only via an appointed fiscal representative i.e. a VAT Representative. In other words, even though the court registration of a branch office in the Republika Srpska is now possible, a VAT registration is still done via a VAT representative in Bosnia and Herzegovina i.e. a local VAT payer.

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