Taxes and Contributions

The tax policy of the Republic of Srpska is among the most stimulating in the region, with low rates of income tax, profit tax and total contributions. Value added tax rate is also very stimulating.

 

2020

RS

FBIH

Serbia

Croatia

Montenegro

North Macedonia

Personal income tax rate

 10% 10% 10%,

15%,

20%

 24% on tax base up to 360,000 kuna, 36% on tax base portion which exceeds 360,000 kuna

9% and

11% on income exceeding the average monthly gross income generated last year

 18% to tax base exceeding 90,000 denars monthly

10% to the amount up to 90,000 denars

Non-taxable part of income (in euro)

 255 153 129 513 0 123

Dividend tax rate

 – – 20% 12% 9% 10%

Profit tax rate

 10% 10% 15% 12% (income up to 3,000,000 kuna) and 18% (income equal to or higher than 3,000,000 kuna) 9% 10%

VAT rate

 17% 17% 20% and 10% 25%, 13%
and 5%		 21%, 7% and 0% 18% and 5%

Total contributions rate on gross salary

 32,8% 41.5% 37.05% 36.5% 34.5% 27%

Direct taxes

Direct taxes fall under the exclusive jurisdiction of the Entities and Brcko District.

A single income tax rate of 10% is applied in the Republic of Srpska.

All foreigners with a permanent residence in the Republic of Srpska must pay income tax for the income generated in the territory of the Republic of Srpska during a calendar year. Equally so, all foreigners who do not have a permanent residence in the RS, but generate income in the RS are considered taxpayers.

Profit Tax

Profit tax in the Republic of Srpska is calculated at 10% rate.

The profit tax is harmonized with the EU standards. Foreign legal entities must pay profit tax:

  • if they conduct business and have a permanent place of business in the Republic of Srpska, for the profit concerning that permanent place of business
  • if they generate revenues from the real estate located in the Republic of Srpska, for the profit concerning that real estate

Taxation of foreign legal entities is regulated in detail by Articles 40 through 43 of the Law on Profit Tax.

Relevant laws:

Contributions

Total contributions rate is 32,8% on gross income, of which:

  • 18,5% goes for pension-disability insurance, 
  • 12% for health insurance,
  • 1,7% for child protection and
  • 0.6% for insurance from unemployment.

Relevant laws: