Bosnia and Herzegovina Freelancer — Porez na Dohodak & PDV Return

Bosnia and Herzegovina has three separate income-tax systems — Federation of BiH (FBiH, 10% PIT), Republika Srpska (RS, 8% PIT), and Brčko District (BD, 10% PIT) — with different rates, allowances, and contribution structures. Before any computation can begin the AI agent must establish which entity the taxpayer is registered and/or resident in, because the wrong entity produces a completely different liability. No computation is valid until this is resolved.

For RS taxpayers only, a 2%-of-revenue lump-sum regime (paušal) may be available as an alternative to the standard 8% net-profit basis. The agent must confirm eligibility — the qualifying turnover threshold is set by the RS tax authority and must be verified — and model both options to identify the lower liability. For FBiH and BD taxpayers there is no paušal option; the standard flat rate applies on taxable profit.

Compile all business receipts and payments for the tax year, classify each line as deductible or non-deductible, and produce a clean profit-and-loss schedule. Only expenses incurred wholly and exclusively for business qualify; mixed-use items (home office, phone, vehicle) must be apportioned. Entertainment, personal drawings, fines, income-tax payments, and loan repayments are excluded. This phase produces the taxable profit figure used in Phase 4.

Self-employed individuals in BiH pay mandatory social contributions (doprinosi) on a contribution base set by reference to coefficient multiples of the published average salary — not simply on profit. FBiH uses coefficients published annually by the Federal Minister of Finance (e.g. ~1.1 for liberal professions, 0.65 for crafts); RS employees bear the full 32.8% themselves with no employer share. Contributions are deductible from the PIT base (FBiH 31% employee rate; RS 32.8%), so they must be calculated before PIT. The agent must confirm the applicable coefficient and the 2025 monthly base BAM figure from the official Službene novine.

Apply the flat PIT rate to taxable income (gross profit minus deductible contributions minus personal and dependent allowances). FBiH: 10% on (profit − contributions − personal allowance BAM 300/month − dependent additions); RS: 8% on (profit − contributions − BAM 6,000/year personal allowance − dependent family member additions of BAM 900/year each, plus mortgage interest and qualifying insurance deductions up to BAM 1,200 each). For RS paušal taxpayers: 2% of revenue replaces this entire calculation.

VAT in Bosnia and Herzegovina is state-level, administered by the Indirect Taxation Authority (UINO) at a single 17% rate. The registration threshold is BAM 100,000 of annual taxable turnover (raised from BAM 50,000 on 2 December 2023). If the taxpayer is registered or crosses the threshold during the year, periodic PDV returns must be filed with UINO. For non-resident digital-service suppliers (ESS), a VAT representative is required at the same threshold. VAT collected and input VAT recovered are not income or expenses.

Prepare and lodge the annual personal income tax return by the statutory deadline — 31 March for both FBiH (Porezna uprava FBiH, form GPD-1051) and RS (Poreska uprava RS, godišnja poreska prijava), or 28 February for Brčko District taxpayers. Settle any balance of PIT and contributions due. For FBiH, the monthly salary-tax specification (MIP-1023) must have been filed on the same day as each salary/drawing payment during the year. Retain all supporting documentation for the statutory retention period.