The Indirect Taxation Authority of Bosnia and Herzegovina has enacted the most comprehensive amendments to the VAT Rulebook since 2008. Here are the key updates that accountants, entrepreneurs, and all VAT payers should be aware of:
🏗️ Construction – Expanded Special Scheme
- The definition of construction works and subcontractor services has been expanded.
- VAT obligations and treatment for contractors and subcontractors are now more clearly defined.
💻 Electronic Services – More Precise Classification
- Services such as web hosting, software licenses, digital content, and online education now have a clear definition.
- If provided to foreign persons, they are not subject to taxation in BiH — provided documentation of the user’s residence is available.
🧾 Input VAT Deduction Before Registration
- A right to deduct input VAT for fixed assets acquired before registration in the VAT system is introduced.
- A major relief for companies in the registration process that are already investing in their business.
🔌 Renewable Energy Electricity
- Mutual exchange of electricity between VAT payers and individuals producing for their own needs is not considered taxable turnover.
🧰 Special Tools – New Treatment
- The transfer of special tools between domestic and foreign entities is treated as ancillary turnover, under conditions of use for export production processes.
📦 Inventory Write-Off – More Flexible Procedure
- The presence of a sanitary inspector is no longer mandatory during inventory destruction.
- Any competent authority is sufficient, with prior notification to the ITA.
🎁 Low-Value Gifts
- It is specified that gifts must not be from the regular assortment.
- A requirement to keep records of gifts during the tax period is introduced.
🌍 VAT Refund for Foreign Nationals
- The threshold for VAT refund has been increased from 100 KM to 200 KM.
- A unique identification number issued by the ITA must be entered in the PDV-SL-2 form.
🕊️ Diplomatic Missions and International Organizations
- The procedure for VAT refund is elaborated in detail, with new forms CD-PDV 1 and CD-PDV 1M.
- Refunds are not approved for certain items (tobacco, alcohol, restaurants, hotels).
