Bosnia and Herzegovina (“BH”) recently declared a state of emergency due to the coronavirus pandemic, believing this to be the adequate response to the current situation and the best foot forward in helping people cope. As a part of initiatives to mitigate the ramifications of the coronavirus crisis, both the Government of the Federation of Bosnia and Herzegovina (“FBIH”) as well as the Government of the Republic of Srpska (“RS”) announced tax reliefs and similar economic measures to ease the fallout on businesses and the public.
Measures
Some measures adopted in FBIH and RS are identical. For example, both entities have granted deadline extensions for filing corporation tax returns i.e. to April 15, 2020 in FBH and to April 30, 2020 in RS.
On the other hand, some measures are particular to FBIH. In FBIH, the Government recommended that taxpayers to file applications for a reduction of payments on account in respect of corporation tax, whereby the monthly amount payable on account in respect of corporation tax to be reduced at the request of the taxpayer where a natural or other disaster is significantly affecting a taxpayer’s business.
In addition, the FBIH Tax Administration has instructions to accept debt rescheduling applications from taxpayers.
In both entities, owing to the numerous public health measures in place, the tax administrations are accepting tax returns by post or e-mail.
Corporate sector
Having regard to entrepreneurs, lump-sum tax applicable to entrepreneurs should be reduced.
In BIH, there have been several proposed initiatives concerning VAT payment deferrals, as well as deferrals in respect of statutory contributions; however, it has yet to be decided what measures will be introduced to mitigate the consequences of COVID-19 outbreak and stabilize BH economy.
Finally, the FBIH Government announced that the Ministry of Finance is working on a plan to reduce the corporation tax rate by up to 50% in light of the circumstances. Also announced was a scheme where taxpayers may file applications for a reduction of payments on account in respect of income tax.
The tax administration has urged all its employees to donate part of their March salaries to help the private sector. This would serve to stabilize the financial position of employers in the private sector, i.e., to help pay the taxes of employers who did not lay off their workers.
For more information, please contact us via covid19@geciclaw.com
