Bosnia & Herzegovina: Complicated Fiscal Federalism

Bosnia & Herzegovina’s fiscal landscape is shaped by a uniquely complex and fragmented system of governance, with separate tax administrations operating at the entity and cantonal levels. This structure results in inconsistent tax policies, duplicated reporting requirements, and administrative inefficiencies that burden both local businesses and foreign investors.

Corporate and personal tax rules can vary between the Federation of Bosnia and Herzegovina, Republika Srpska, and the Brčko District, creating legal uncertainty and compliance challenges. At the same time, the VAT system is unique throughout the entire territory of Bosnia & Herzegovina. While efforts have been made to harmonize aspects of the tax system, political fragmentation continues to stall meaningful reform. For tailored advice on navigating Bosnia & Herzegovina’s tax system, don’t hesitate to contact us.