Taxation of international executives
Are there social security/social insurance taxes in Bosnia and Herzegovina? If so, what are the rates for employers and employees?
Employer and employee
As an expatriate must have an employment agreement with an FBiH or an RS legal entity for immigration purposes in order to perform services in the FBiH or the RS, the legal entity needs to withhold compulsory social security contributions. A legal entity refers to all legal entities incorporated in the FBiH or the RS.
Current social security rates on gross salary in the FBiH (applicable for the year 2012 onwards) are as follows:
|Type of insurance||Paid by employer||Paid by employee||Total|
*Withheld from salary
**Paid in addition to salary
Current social security rates on gross salary in the RS are as follows:
|Category||Paid by employee*|
*Withheld from salary
BiH has signed totalization agreements with a number of countries which override BiH legislation on matters related to health and social security.
Are there any gift, wealth, estate, and/or inheritance taxes in Bosnia and Herzegovina?
There are no wealth taxes imposed in BiH.
In the FBiH, inheritance and gift taxes are regulated at the cantonal level. Tax rate is 5 percent. Family members are exempt (subject to certain conditions).
As of 1 January 2012 in the RS inheritance and gifts taxes with respect to real estate have been abolished.
Are there real estate taxes in Bosnia and Herzegovina?
In the FBiH, Real Estate Transfer Tax (RETT) is regulated at the cantonal level and is applicable to transfer of property (land and buildings) with or without compensation.
The taxpayer is either the buyer or seller of the property (varies across the cantons). Taxable base is the agreed price, if not lower than the market price. Tax rates are from 5 percent to 8 percent (varies across the Cantons, 5 percent in Sarajevo Canton).
In the RS there is no RETT, but RS imposes Real Estate Tax (RET), whereby RET is generally payable in respect of real estate used for commercial purposes.
RET is in the range from 0.05 percent to 0.5 percent of the estimated value of real estate in question. It is within local government’s jurisdiction to determine specific tax rate which has to fall within the aforementioned range.
Are there sales and/or value-added taxes in Bosnia and Herzegovina?
The standard VAT rate is 17 percent. There are no reduced rates.Value-added tax exemption with input VAT recovery (zero VAT rate) generally applies to export and related services.
Value-added tax exemptions (no input VAT recovery) include inter alia, financial services, medical services, services and deliveries of goods performed by social welfare organizations, and so on.
Services are generally taxable in BiH if they are deemed to be supplied in BiH. The place of supply rules are similar to those in the EU. The self-charge mechanism applies for certain services supplied from abroad.
Are there unemployment taxes in Bosnia and Herzegovina?
Unemployment contributions are paid as a part of social security insurance contributions. For details please refer to section social security tax.
Are there additional taxes in Bosnia and Herzegovina that may be relevant to the general assignee? For example, customs tax, excise tax, stamp tax, etc.
Assignees might be liable to pay custom duties and excise duties on goods imported into BiH. Customs and excise duties are regulated at the level of BiH.