Tax Overview in Bosnia and Herzegovina

The Bosnian tax system at a glance

Bosnia and Herzegovina splits its taxes between levels. VAT, customs and excise are state taxes run by the Indirect Taxation Authority (Uprava za indirektno oporezivanje, UIO). Profit tax, income tax and social contributions are set and collected separately by the Federation of BiH (FBiH), Republika Srpska (RS) and Brčko District (BD). Rates are low and mostly flat, but bases, allowances and contributions differ, so always establish first where the business has its seat and where the person works.

• Standard tax year: the calendar year (1 January to 31 December) for profit tax in all three parts of the country (FBiH Zakon o porezu na dobit art. 47(1); RS Zakon o porezu na dobit art. 37(1); BD Zakon o porezu na dobit art. 21(1))
• Currency: the convertible mark (KM, BAM). The official rate is KM 1.95583 for one euro (KM 1 = EUR 0.51129), set to match the Deutsche Mark conversion rate (Central Bank of BiH, notice on the official exchange rate of the convertible mark against the euro)
• Tax authorities: UIO for VAT registration, returns and payment across BiH (Zakon o porezu na dodanu vrijednost arts. 39, 57). For direct taxes: Porezna uprava FBiH, Poreska uprava RS and the Porezna uprava of the Direkcija za finansije BD (FBiH Zakon o porezu na dobit art. 4(3); RS Zakon o porezu na dobit art. 24(2); BD Zakon o Poreznoj upravi art. 1)
• Residence basis, companies: a company resident in the FBiH, the RS or BD is taxed on profit from all sources, in BiH and abroad. A non-resident company is taxed on the profit of a permanent establishment and by withholding tax on other income from that part of BiH. A branch of a company from another part of BiH is taxed where it is registered (FBiH arts. 3, 5; RS art. 3 as replaced by 1/17, art. 3a; BD art. 3). Detail: ba-corporate-income-tax.
• Residence basis, individuals: an FBiH resident is taxed on income earned in and outside the FBiH. A non-resident is taxed on FBiH income from a permanent establishment, employment, property, rights or capital (FBiH Zakon o porezu na dohodak art. 2(1)). RS and BD rules: bosnia-income-tax.
• Profit tax rate: 10% in the FBiH, the RS and BD (FBiH art. 31; RS art. 36(1); BD art. 20(1))
• Income tax on salary, FBiH: 10% (FBiH Zakon o porezu na dohodak art. 9), after employee contributions and a basic personal allowance of KM 3,600 a year (KM 300 a month) (art. 24(1))
• Income tax on salary, RS: 8% of gross pay less the monthly allowance of KM 1,000 (KM 12,000 a year, RS Zakon o porezu na dohodak art. 10(3)(1), as amended by 119/21); contributions are not deducted from the tax base. For jobs that need at most three-year secondary schooling, KM 50 a month is also left out of both bases. The RS Tax Administration's 2026 example for such a job: gross KM 1,800, contributions KM 542.50, tax KM 60, net KM 1,197.50 (Poreska uprava RS, notice on Form 1002 from 1 January 2026). Other RS income types have their own rates: see bosnia-income-tax.
• Income tax on salary, BD: 10% (BD Zakon o porezu na dohodak art. 10), with a basic allowance of KM 1,200 a month (KM 14,400 a year) (art. 25(1), as amended by 21/22)
• Social contributions, FBiH: employee 31% of gross (pension 17%, health 12.5%, unemployment 1.5%); employer 5% on top (pension 2.5%, health 2%, unemployment 0.5%) for pay from 1 July 2025 (FBiH Zakon o doprinosima art. 10, as amended by 33/25)
• Social contributions, RS: 31% of gross, all withheld from the employee's pay: pension 18.5%, health 10.2%, unemployment 0.6%, child protection 1.7% (RS Zakon o doprinosima art. 22(1), 114/17, as amended by 112/19 and 119/21). Detail and BD: bosnia-payroll and bosnia-social-contributions.
• Withholding tax on payments to non-residents: FBiH 5% on dividends and 10% on interest, royalties, listed services and rent; RS 10% on dividends, interest, royalties and listed services; BD 10% on interest, royalties and listed services, with no withholding on dividends. Treaties can lower the rates (FBiH art. 38(7); RS art. 44 as amended by 1/17; BD arts. 29(2), 30(1))
• Dividends received by individuals: in the FBiH, dividends and profit shares are not income for income tax (FBiH Zakon o porezu na dohodak art. 5(1)(1)). In the RS, income tax is not paid on dividends and profit shares of a company (RS Zakon o porezu na dohodak art. 8(4)(14): art. 8(3)(13) of 60/15, renumbered by 105/19 and 112/23). In BD, dividends and profit shares, and gains on disposing of financial instruments, are not income (BD Zakon o porezu na dohodak art. 6(a))
• Does VAT exist? Yes. A single state VAT at 17%, with no reduced rate (Zakon o PDV art. 23). Registration is compulsory when taxable supplies in the previous year exceed, or are likely to exceed, KM 100,000 (art. 57(1), as amended by 80/23). Below that, a business can register voluntarily for at least 60 months (art. 44). Detail: bosnia-vat.
• VAT return frequency: monthly. The tax period is the calendar month, and the return is filed by the 10th of the following month, even with nothing to pay (Zakon o PDV arts. 38, 39)
• Annual profit tax return: by 31 March for a calendar year in all three. In the FBiH the law ties it to 30 days after the financial statements deadline, and the rulebook sets 31 March. Monthly advances are paid during the year (FBiH by the end of each month, RS and BD by the 10th) (FBiH Zakon art. 49(1), Pravilnik art. 101(1), arts. 52, 53; RS arts. 38, 39; BD arts. 22, 24)
• Annual financial statements: FBiH and RS companies file them by the last day of February for the previous year (FBiH Zakon o računovodstvu i reviziji art. 44(1); RS Zakon o računovodstvu i reviziji 115/25 art. 42(2)). Detail: ba-company-formation.
• Late-payment interest: FBiH 0.04% a day; RS 0.03% a day; BD 0.03% a day, capped at the principal (FBiH Zakon o visini stope zatezne kamate art. 2; RS Zakon o poreskom postupku art. 60(1); BD Zakon o Poreznoj upravi art. 68)

For tax planning across these options, see bosnia-tax-optimization.

Sources

Source	URL	Read on
FBiH Zakon o porezu na dobit, 15/16 and 15/20 (consolidated, published by Porezna uprava FBiH): arts. 3, 4, 5, 31, 38, 47, 49, 52, 53	https://ik.imagekit.io/9qcwbg8wl/15-16_i_15-20-zakon-o-porezu-na-dobit-precisceni_07YP9wNd9.pdf	2026-10-30
FBiH Pravilnik o primjeni Zakona o porezu na dobit, consolidated to 39/26: art. 101	https://pufbih.ba/v1/public/upload/zakoni/03062026%20Pravilnik%20o%20primjeni%20Zakona%20o%20porezu%20na%20dobit%2039-26.pdf	2026-10-30
FBiH Zakon o porezu na dohodak, 10/08 to 65/13 (consolidated): arts. 2, 5, 9, 24	https://www.pufbih.ba/v1/public/upload/zakoni/d9bf6-zakon-o-porezu-na-dohodak-ispravan-tekst.pdf	2026-10-30
FBiH Zakon o doprinosima, consolidated to 33/25 (employer rates from 1 July 2025): art. 10	https://www.pufbih.ba/v1/public/upload/zakoni/2dcc6-zakon-o-doprinosima-precisceni-tekst-25.pdf	2026-10-30
FBiH Zakon o računovodstvu i reviziji, 15/21: art. 44	https://www.pufbih.ba/v1/public/upload/zakoni/4ffff-zak-o-racunovodstvu-i-reviziji-u-fbih-bos..pdf	2026-10-30
FBiH Zakon o visini stope zatezne kamate na javne prihode (consolidated): art. 2	https://pufbih.ba/v1/public/upload/zakoni/1%20Zakon%20o%20visini%20stope%20zatezne%20kamate%20na%20javne%20prihode%20-%20PRECISCEN%20TEKST.pdf	2026-10-30
RS Zakon o porezu na dobit 94/15: arts. 3, 24, 36 to 39, 44	https://www.poreskaupravars.org/dokumenti/zakoni/Zakon%20o%20porezu%20na%20dobit%20od%2001_01_2016.pdf	2026-10-30
RS amendment 1/17 to the profit tax law (arts. 3, 3a, 44)	https://www.poreskaupravars.org/dokumenti/zakoni/ZakonoizmdopDobit.pdf	2026-10-30
RS Zakon o porezu na dohodak 60/15: art. 8(3)(13)	https://www.poreskaupravars.org/dokumenti/zakoni/zakonoporezunadohodak6015.pdf	2026-10-30
RS amendment 119/21 to the income tax law (allowance KM 12,000 a year, art. 10(3)(1))	https://www.poreskaupravars.org/dokumenti/zakoni/Zakon%20o%20doprinosima.pdf	2026-10-30
RS amendment 105/19 to the income tax law (art. 8 paragraphs renumbered)	https://www.poreskaupravars.org/dokumenti/zakoni/sluzbeni%20glasnik%20105-zakon%20o%20izmjenama%20i%20dopuni%20zakona%20o%20porezu%20na%20dohodak.pdf	2026-10-30
RS amendment 123/20 to the income tax law (art. 8(4) points 15 to 17 added after the dividend point)	https://poreskaupravars.org/wp-content/uploads/2020/12/Dopuna-zakona-o-porezu-na-dohodak.pdf	2026-10-30
RS amendment 112/23 to the income tax law (art. 8(4) points renumbered)	https://poreskaupravars.org/wp-content/uploads/2023/12/Scan26122023.pdf	2026-10-30
RS amendment 114/25 to the income tax law (art. 8(2) and (4); dividend point untouched)	https://poreskaupravars.org/wp-content/uploads/2025/12/Dohodak.pdf	2026-10-30
Poreska uprava RS, notice on Form 1002 from 1 January 2026 (salary example: 31% contributions, KM 1,000 allowance, 8% tax)	https://poreskaupravars.org/izmjene-u-podnosenju-obrasca-1002-od-01-01-2026-godine-3/	2026-10-30
RS Zakon o doprinosima 114/17: art. 22	https://www.poreskaupravars.org/dokumenti/zakoni/Zakon-o-doprinosima-SLGL-114_17.pdf	2026-10-30
RS amendment 112/19 to the contributions law (unemployment 0.6%)	https://www.poreskaupravars.org/dokumenti/zakoni/Zakon-o-izmjenama-Zakona-o-doprinosima-SLGL-112_19.pdf	2026-10-30
RS amendment 119/21 to the contributions law (health 10.2%)	https://www.poreskaupravars.org/dokumenti/zakoni/Zakon%20o%20doprinosima.pdf	2026-10-30
RS Zakon o računovodstvu i reviziji 115/25: art. 42	https://poreskaupravars.org/wp-content/uploads/2026/01/Zakon.pdf	2026-10-30
RS Zakon o poreskom postupku 78/20: art. 60	https://poreskaupravars.org/wp-content/uploads/2020/11/Zakon-o-poreskom-postupku.pdf	2026-10-30
BD Zakon o porezu na dobit, consolidated 17/22: arts. 3, 20, 21, 22, 24, 29, 30	https://skupstinabd.ba/3-zakon/ba/Zakon%20o%20porezu%20na%20dobit/05B17-22%20Zakon%20o%20porezu%20na%20dobit%20-%20prec--is--eni%20tekst.pdf	2026-10-30
BD Zakon o porezu na dohodak, unofficial consolidated text: arts. 6, 10	https://skupstinabd.ba/3-zakon/ba/Zakon%20o%20porezu%20na%20dohodak/Nesluz--bena%20prec--is--c-ena%20verzija%20Zakona%20o%20porezu%20na%20dohodak%20B.pdf	2026-10-30
BD amendment 21/22 to the income tax law (allowance KM 1,200 a month): art. 25(1)	https://skupstinabd.ba/3-zakon/ba/Zakon%20o%20porezu%20na%20dohodak/04B21-22%20Zakon%20o%20izmjenama%20i%20dopuni%20Zakona%20o%20porezu%20na%20dohodak.pdf	2026-10-30
BD Zakon o Poreznoj upravi (2020): arts. 1, 68	https://skupstinabd.ba/3-zakon/ba/Zakon%20o%20Poreznoj%20upravi%20Brc--ko%20Distrikta%20BiH/011B11-20%20Zakon%20%20o%20poreznoj%20upravi%20Brcko%20distrikta%20BiH.pdf	2026-10-30
Zakon o porezu na dodanu vrijednost, Sl. glasnik BiH 9/05: arts. 23, 38, 39, 44, 57	https://www.uino.gov.ba/portal/wp-content/uploads/PROPISI/2_Porezi/1_PDV/1_Zakon_o_PDV/B/B-1-Zakon_o_PDV-b.pdf	2026-10-30
VAT amendment 80/23 (threshold KM 100,000)	https://www.uino.gov.ba/portal/wp-content/uploads/PROPISI/2_Porezi/1_PDV/1_Zakon_o_PDV/B/B-H-S-1-5-Z-o-PDV-sl-list-80-23-24-11-23.pdf	2026-10-30
Central Bank of BiH, notice on the official exchange rate of the convertible mark against the euro	https://cbbh.ba/press/ShowNews/321?lang=en	2026-10-30

Not yet confirmed: Brčko District contribution rates (not read; see bosnia-payroll); the RS 8% salary rate in the text of the law itself (RS income tax law art. 4(1) after 119/21 was not on the scanned page; the 8% is taken from the RS Tax Administration's 2026 example); the BD financial statements deadline; treaty withholding rates.