Economic Overview
Following the economy’s strong performance in the final quarter of 2018, monetary energy likely decelerated in the principal quarter of this current year. Mechanical creation kept on declining in March subsequent to contracting in both January and February, on a sharp decrease in power supply and wavering assembling yield.
The economy ought to develop at a moderately relentless pace this year, conveyed by more grounded private use. Headwinds from slower EU development could burden the outer segment and speculation, in any case, while the deferred government arrangement and divided positions on key changes could likewise impede development.
Main sectors of economy
Agricultural sector
Among this Prijedor has a natural product developing generation, planting creation, crop cultivating creation, factory and pastry kitchen businesses, stock cultivating generation, preparing ventures and a milk industry.
Service sector
The administration area in Prijedor is developing quickly and this reflects in the development of lodgings, stores, streets, instructive offices and shoppings focuses that are being worked in the city. Making it a developing business center point in Bosnia and Hercegovina.
Tourism
The travel industry segment has been recuperating and helping the economy through and through all the while, with famous winter skiing goals just as summer wide open the travel industry. Bosnia and Herzegovina has been a top entertainer as of late regarding the travel industry improvement; traveler entries have developed by a normal of 24% every year from 1995 to 2000.
As per a gauge of the World Tourism Organization, Bosnia and Herzegovina will have the third most elevated the travel industry development rate on the planet somewhere in the range of 1995 and 2020.
Of specific note is the diaspora populace which frequently returns home amid the late spring months, acquiring an expansion in retail deals and nourishment administration industry.
Taxes in Bosnia and Herzegovina
- The single state level VAT system replaces the entity level sale tax
- Indirect Taxation Authority is the single institution responsible for calculation and collection of VAT
- VAT is paid to the Single Account open at the BiH Central bank
- BiH VAT Law is in accordance with the EU 6th Directive on VAT
Taxable and non-taxable activities and deductions
Most of the goods and services are taxable. The taxpayers are obliged to charge VAT when supplying the goods and services. VAT must be calculated if the goods and services are used in non-business purposes.
Exemptions
Taxpayers selling VAT exempt goods or providing VAT exempt services neither can charge VAT nor can deduct the VAT paid on their purchases. In such cases input VAT is considered the cost of a taxpayer.
VAT on import and export
A taxpayer who purchases goods from abroad must pay VAT when the goods are imported.
A taxpayer that exports goods and services shall not charge VAT on those sales, but is entitled to request refund of VAT paid on his purchases.
Corporate income tax rate in B&H
• Federation B&H – 10%
• Republic of Srpska – 10%
• Brko District – 10%
Profits transferred from abroad are not taxed in BiH
Profits transferred from abroad are not taxed if they were previously subject to taxation abroad.
Corporate taxable basis
Profits are calculated in accordance with applicable laws, by deducting (real) expenses from revenues. The tax base includes profit gained through revenues and capital gains, according to the accounting regulations. The expenditures must conform to the accounting standards.
Investing in Bosnia and Herzegovina
In 2018, the economy of Bosnia and Herzegovina grew by three per cent, according to Focus Economics.
Here are 10 reasons to invest in Bosnia and Herzegovina:
- Strategic location
- Available natural resources and beauties
- Long tradition in different industry branches
- Abundance of industrial zone, attractive sites and available production facilities
- Favorable legal environment
- Low tax rates
- Highly educated and price competitive labor force
- Stable domestic currency BAM pegged to EURO
- Regional and bilateral Free Trade Agreements
- EU perspective