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Registration in the VAT system in Bosnia and Herzegovina

How to become a Taxpayer of Value Added Tax (VAT) in BiH?

The complexity of the tax system in Bosnia and Herzegovina (BiH) from the standpoint of direct taxes is reflected in the fact that the territory of BiH is divided into two entities: the Federation of Bosnia and Herzegovina (FBiH) and Republika Srpska (RS), and Brčko Distrikt (BD).

However, indirect taxes are regulated on state level and they comprise:

  • Value added tax;
  • Excise and;
  • Customs.

The institution competent for the implementation of the legislation and indirect taxation policy, as well as for the collection and allocation of indirect tax revenues is the Indirect Tax Authority of BiH (ITA).

Registration of VAT payers

Regular registration

The ITA encompasses the registration of taxpayers, whose taxable turnover of goods or services in the previous year exceeds, or is likely to exceed, the amount of BAM 50,000.00. According to the Value Added Tax Act in BiH, all entities that are for the first time obligated or may become obligated to pay VAT, must fill an application to ITA by the 20th calendar day at the latest following the month for which they realized or are likely to realize revenues exceeding BAM 50,000.00. The deadline for the registration of a taxpayer at ITA is 15 days after the receipt of the registration request. However, in practice the registration of VAT payers lasts longer than 15 days.

Voluntary registration

An entity that is not obligated to register for VAT can file a Request for voluntary registration. In that case, the VAT payment liability for such entities is at least 60 months.

Registration through the tax representative

Payers with no registered office in BiH that perform trade of goods and services in BiH are obligated to register through the tax representative with registered office in BiH, whereby the taxpayer and tax representative are jointly and individually responsible for VAT in BiH.

 

Documentation required for the registration of VAT payers

During the regular and voluntary VAT registration, along with the request, a taxpayer is obligated to provide, in a verified copy or original, the following documents:

  • Decision on registration with the court registry;
  • Certificate of registration, issued by the competent Tax Authority of an entity or Brčko District of BiH;
  • Personal ID card of the owner and responsible persons of a legal entity that files the request;
  • Work permit and certificate of residence, issued by the competent authorities of an entity or Brčko District of BiH, for the responsible person – foreign citizen;
  • Power of attorney for a BiH citizen to represent the taxpayer in proceedings with the ITA in case of absence of a responsible person – foreign citizen;
  • Passport of the owner and the responsible person – foreign citizen and
  • Authorized signatories list certified by the commercial bank with which the entity has a current account (for all open current accounts).

In case of registration of the tax representative, taxpayers are obligated to provide the following documentation:

  • Engagement letter for the representative services concluded with the tax representative and a power of attorney with name data, ID number and residence, or a place of business of the tax representative with permanent residence in BiH;
  • Contract or other document as a proof that taxable turnover is performed on the territory of B&H;
  • Documents on the registration with the register of a domicile competent authority, officially translated to one of the official languages in BiH;
  • Authorized signatories list verified by foreign commercial banks with opened special transaction account for the tax representative of the entity without residence in BiH, through which transactions will be made related to business transactions (for all open current accounts) and notification about main transaction account determined by the authorised payment organisation pursuant to legislation which regulates

In case of registration of the tax representative, taxpayers are obligated to provide the following documentation:

  • Engagement letter for the representative services concluded with the tax representative and a power of attorney with name data, ID number and residence, or a place of business of the tax representative with permanent residence in BiH;
  • Contract or other document as a proof that taxable turnover is performed on the territory of B&H;
  • Documents on the registration with the register of a domicile competent authority, officially translated to one of the official languages in BiH;
  • Authorized signatories list verified by foreign commercial banks with opened special transaction account for the tax representative of the entity without residence in BiH, through which transactions will be made related to business transactions (for all open current accounts) and notification about main transaction account determined by the authorised payment organisation pursuant to legislation which regulates the internal payment transactions in both entities' (FBiH and RS) jurisdiction.

Besides the aforementioned documentation, taxpayers are obliged to pay the following charges to the bank account of the BiH treasury:

  1. Tax for Registration Request and registration in the Unique Indirect Taxpayers Registry in the amount of BAM 10.00;
  2. Tax for issuing the Registration Certificate registration in the Unique Indirect Taxpayers Registry in the amount of BAM 10.00;
  3. Administrative fee in the amount of KM 20.00.

Security means for registration purposes

ITA, in certain cases, for the purpose of VAT registration can require security means.

Deloitte can provide you support in the process of VAT registration. In case you are interested in such service, please feel free to address our below contact persons.

Contact

Emir Ibišević
Senior Manager
Tel: + 387 33 277 560
Mob: + 387 61 396 047
Email: eibisevic@deloittece.com

Samir Hadžić
Manager
Tel: + 387 33 277 560
Mob: + 387 61 796 067
Email: shadzic@deloittece.com