Bosnia and Herzegovina : VAT recovery before the EU accession

An official candidate country since December 2022, Bosnia and Herzegovina moved one step closer to the EU accession in March 2024.

Based on the reported progress in meeting the membership criteria,  the Commission has recently recommended to the European Council to open EU accession negotiations with Bosnia and Herzegovina and to adopt the negotiating framework after the achievement of further steps in line with the Commission’s report.

VAT Recovery requirements

Despite its non-EU status, Bosnia and Herzegovina is applying the VAT recovery process similar to the 13^th European Directive.

It consists in granting VAT refunds to foreign non-registered companies incurring business expenses within the country.

For claiming back the VAT in Bosnia and Herzegovina (BiH), foreign companies must fulfil following requirements:

• having no establishment, nor residence, nor registered office within BiH
• having no VAT registration and conducting no taxable operations in BiH
• being registered as full VAT payer in the country of establishment
• appointing a local tax representative in BiH
• obtaining the local ITA identification number for VAT refund purposes

VAT reclaim rules

The standard VAT rate in Bosnia and Herzegovina being of 17%, it can be claimed back quarterly (≥BAM 800) or yearly (≥100 BAM) on most business expenses, except for:

• Accommodation
• Entertainment and representation expenses
• Expenses related to passenger means of transport

The deadline for claiming back the VAT being of 6 months following the achieved calendar year, the 2023 claims must be filed by June 30, 2024.

BtoBnice will be happy to help your company with VAT reclaim in Bosnia and Herzegovina.

For more information, feel free to contact our VAT expert at: contact@btobnice.com