Companies and residency
Company taxes in Bosnia: the basics an investor needs
Corporate profit tax of 10%, VAT of 17% and when you must register, and the withholding on dividends paid abroad — in plain language, before you sit down with an accountant.
Alhosani Business Centre
·Sarajevo·0views
One of the first questions when forming a company in Bosnia is how much tax it pays. The short answer is that Bosnia’s tax system is among the lightest in Europe, but the details depend on which entity the company is registered in. This is a summary of the basics; your accountant applies them to your case.
First: Bosnia has two entities
Bosnia and Herzegovina consists of two entities, the Federation of Bosnia and Herzegovina and Republika Srpska, plus Brčko District. Direct taxes such as profit tax are set by each entity’s own law, while VAT is a state-level tax. Sarajevo, where our offices are, is in the Federation, so the examples here come from it.
Profit tax
The general corporate profit tax rate is 10% of taxable profit. The company files an annual return with the tax administration of its entity, and the accountant works out taxable profit after legally deductible expenses.
VAT (PDV)
- One rate of 17% nationwide, with no reduced rate. Exports are zero-rated.
- It is administered by the Indirect Taxation Authority (UIO) at state level.
- You must register once your taxable sales exceed, or are expected to exceed, 100,000 KM a year. The threshold was raised from 50,000 KM in December 2023, so do not rely on older sources.
- After registration you issue VAT invoices and file periodic returns.
Dividends paid to partners
When the company pays profits to a partner resident abroad, part is withheld at payment. In the Federation the rate is 5% on dividends and 10% on interest and royalties, and it may be lower if Bosnia has a double-taxation treaty with the partner’s country. In Republika Srpska the rate on dividends is 10%.
What this article does not cover
Salaries and their contributions, local taxes and transactions between related companies have detailed rules that change. Do not rely on any general figure for them; ask a licensed accountant to calculate them before you decide.
How we help
At Alhosani Business Centre we form the company and connect you with an accountant who handles its monthly and annual filings. Read company formation steps and what is really needed and the costs, or contact the Business Centre.
Written in October 2026 from published sources. Laws and rates change — consult a licensed accountant before any decision.
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