Corporate income tax is calculated on the tax base in accordance with the provisions of the Law on Corporate Income Tax of the Federation of Bosnia and Herzegovina (“Official Gazette of the Federation of Bosnia and Herzegovina,” No. 15/2016 and 15/2020) for a tax period equal to the calendar year. Exceptionally, the tax period may differ from the calendar year in cases of:
- a) Commencement of the legal entity’s business during the calendar year
- b) Termination of the legal entity’s business before the end of the calendar year
- c) Status changes of the legal entity
- d) Determination of another tax period based on the decision of the Federal Minister of Finance, which will apply for at least three consecutive tax periods.
A taxpayer with a determined tax period based on the decision of the Federal Minister of Finance is obliged to submit a tax return within 30 days for:
- a) The period from January 1 of the current year to the day when, according to the decision, a business year different from the calendar year begins, or
- b) The period from the day when, according to the decision, a business year ends to December 31.
Article 47, paragraph (2), point (d) of the Law on Corporate Income Tax stipulates that exceptionally, the tax period may differ from the calendar year in cases of determining another tax period based on the decision of the Federal Ministry of Finance, which will apply for at least three consecutive tax periods.
On April 23rd, 2021, the Federal Ministry of Finance, based on Article 200 of the Law on Administrative Procedure (“Official Gazette of the Federation of Bosnia and Herzegovina” 2/98 and 48/99) and Article 47, paragraph 2, point d) of the Law on Corporate Income Tax (Official Gazette of the Federation of Bosnia and Herzegovina 15/16 and 15/20), issued decision number: 05-02-04-3286/21 approving the use of a modified tax period that differs from the calendar year. The approved tax period starts on September 1 of the current year and lasts until August 31 of the next year for the taxpayer represented by this law firm.
Additionally, on April 28, 2021, the Federal Ministry of Finance, based on Article 200 of the Law on Administrative Procedure (“Official Gazette of the Federation of Bosnia and Herzegovina” 2/98 and 48/99) and Article 47, paragraph 2, point (d) of the Law on Corporate Income Tax (Official Gazette of the Federation of Bosnia and Herzegovina 15/16 and 15/20), issued decision number: 05-02-04-355321, approving the use of a modified tax period that differs from the calendar year. The approved tax period starts on September 1 of the current year and lasts until August 31 of the next year for the taxpayer in the process of determining the second tax period for a legal entity in Bosnia and Herzegovina.
In both cases mentioned above, the use of a modified tax period was approved to align the tax period with the tax period of the founder of the legal entity based in the Republic of Austria.
If you need legal advice on determining the second tax period for a legal entity in Bosnia and Herzegovina for your company, you are in the right place with us. You can contact our corporate law attorneys directly via phone (+387 62 342 463), WhatsApp, Viber, or email (rasid@haracic.ba).
