- New Law on Corporate Income Tax of FB&H

In the "Official Gazette of BiH", No. 15/16 of 02/26/2016. , a new Law on Corporate Income Tax Federation.


The law enters into force eight days after its publication in the "Official Gazette of BiH". On the day of the Law, the Law on Profit Tax ( "Official Gazette of BiH" no. No. 97/07, 14/08 and 39/09).

Some of the newspapers that the law brings are:


Taxpayer is a subsidiary of a legal entity from the RS and Brcko District, which is registered in the territory of the Federation, the profits realized in the Federation;

Abolish the form of tax incentives based on export and employment on the basis of more than 50% of disabled persons and persons with special needs. The provisions for impairment to income tax in respect of investments in production are set out in modified form in comparison to the previous law. The new Act imposes a tax incentive for newly employed staff;

Expenses incurred on behalf of revaluation to their net realizable value are recognized in the tax period in which these stocks sold or written off or destroyed;

 Changing recognized provisions - under certain conditions recognized provisions for future expenses related to the protection of the environment, and provisions that are formed for future expenses in warranty periods are recognized up to 4% of annual turnover;

Special provision for financial institutions - expenses from revaluation of receivables balance sheet assets, which are estimated on a group basis and based on the experience of historical cost (latent losses -IBNR) are not tax deductible expenses;

Amended rates of tax deductible depreciation and amortization;

Expenses from sponsorship is recognized as tax deductible expenses in the amount of up to 3% of total revenues;

Terms recognition of write-offs have been modified, so that the expenses are recognized when:

 claims in the previous tax period was included in the income of taxpayers and that are not collected within 12 months from the due date of payment or

claims under litigation or has started enforcement proceedings or that the claims reported in the liquidation or bankruptcy proceedings against the debtor;

Expanded the concept of related parties, and provides that a taxpayer who participates in transactions with related parties required at the time of filing your tax returns have documentation on transfer pricing, otherwise subject to fines. Also, the number of methods that can be used for analysis of transfer pricing;

Introduced a 'thin capitalization'. This rule financial expenses on behalf of the interest or its functional equivalent under financial contracts and instruments taken from related parties are tax deductible expenses proportional to the ratio of 4: 1, which refers to the components of total liabilities arising from financial contracts and authorized capital in the court register. This rule does not apply to banks and insurance companies.

The Act stipulates that the Federal Minister of Finance within six months make rules for the implementation of the Law on Income Tax and the Rules on transfer pricing.