Tuesday, January 11 2022

Bosnia and Herzegovina: New tax model in the Republic of Srpska

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From January 2022, a a new tax model will come into force in the Republic of Srpska. This will allow the removal of the gray economy and will benefit both employers and citizens, as the same conditions will be created for all business entities and citizens who use budget funds.

The RS Ministry of Finance said the transition to the new tax system will close loopholes in practice and provide more funds for better wages, pensions and social benefits.

The existing system in RS was introduced in August 2007 with the adoption of the Tax Cash Registers Act, and since then it has been noticed that, in practice, some taxpayers have found a way around the strict requirements of the old tax system and trade in goods and services by issuing fictitious tax invoices, which do not even appear to deviate from the prescribed form.

For this reason, the working group for taxation also analyzed several similar models, such as those of Serbia, Croatia and Belgium, and on the basis of these, recommended a modification of the model of taxation. of RS.

The proposed system should ensure that all transactions arrive securely and encrypted at the tax administration and are located there in the same way, but at the same time remain selectively readable and accessible to taxpayers or authorized persons.

The basis for this template should be a digital certificate issued by a certification body independent of tax equipment manufacturers and taxpayers, and invoice verification should be available to customers upon receipt of the invoice.

In addition, it is expected to bring multiple savings to employers, such as reducing paper consumption and printer maintenance costs, as well as internet costs, as this new system has a completely different way of transmitting data. .

It is also planned to improve the direct communication of the economic entities with the tax administration of RS and the indirect tax authority of Bosnia and Herzegovina, where no extra time will be spent and the transfer will be carried out more quickly.

Finally, it should be mentioned that if set at a higher level, it will crack down on tax evasion.

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.

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