- Amendments to the Law on Income Tax RS

On 01.01.2017. year, came into force amendments to the Law on Income Tax RS, which deal with the following:


The amendments specify the term of the taxpayer of income tax, so the tax liability is determined on the basis of residence of the taxpayer and the sources from which the income is realized.

According to the amendments, the interest on bank deposits is included in taxable income but are excluded expenses arising from the impairment of goodwill, and changing the rules on the recognition of amortization expense for tax purposes.

The part of the law governing tax relief, reduce the tax base by the amount of investment in real estate, plant and equipment for production activities, is limited so that the reduction can be achieved by 30% if the amount of the investment exceeds 50% of the tax base.

In addition, there is an exception, and in relation to the deadline for filing a tax return for withholding tax, due to the need that arose in practice, relating to the issuance of the tax certificate on paid withholding tax, which need non-residents. Exceptionally, the annual report of the withholding tax shall be submitted not later than 30 days after the end of the tax year.

Deleted a provision which finds a lower rate of withholding tax on income from dividends and share in profits of non-resident.

Specifies the services the value of which non-resident pays withholding tax, and the amendment was adopted, at which withholding tax is paid on all the services that a non-resident performs to residents of the Republic of Srpska, if they are residents of countries with which Bosnia and Herzegovina is not signed an agreement on avoidance of double taxation as well as in case that the payment for services by residents of the Republic of Srpska perform otherwise than paying in cash.

In the section of the Act which relates to the elimination of double taxation, specified the standard related to the rule of double taxation for residents of the Republic of Serbian in respect of tax paid abroad. Also updated is the provision requiring proof of residency. Income payer - a resident of the Republic of Srpska is required to obtain a certificate of residence for user revenues - non-resident, which is issued by the competent authority from the country of user revenues, as well as certified statement of income and User's revenue, if the non-resident's income generated in the Republic of Srpska applied lower or the same tax rate as compared to the rates prescribed in this law.