bosnia-tax-optimization

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# Bosnia and Herzegovina Tax Optimization

## Bosnia and Herzegovina Tax Optimization Skill v0.1

**Tier 2 — research-verified. Sources: PwC Bosnia, Eurofast Tax Card 2025, IMF. Figures must agree with `bosnia-income-tax.md` / `bosnia-social-contributions.md` / `bosnia-payroll.md`. NOT yet signed off by a Bosnian tax adviser. Aggressive positions are never advised; every suggestion must be reviewed.**

## Section 1 -- Quick Reference

**Quick Reference**

| Field | Value |
| --- | --- |
| Country | Bosnia and Herzegovina (two entities: FBiH & RS) |
| Currency | BAM (convertible mark) |
| Headline levers | Flat low PIT; small-entrepreneur **2% of revenue** option; **0% dividends**; entity/region choice |
| PIT | **10% (FBiH)** / **8% (RS)** flat |
| Corporate tax | 10% (both entities) |
| Dividends | **0%** |
| Personal allowance | FBiH BAM 300/mo; RS BAM 500/mo |

> **One of Europe's simplest, lowest systems:** flat **10%/8%** PIT, **10%** CIT, and **0% dividend tax**. The optimisation is mostly about regime choice (2%-of-revenue small entrepreneur) and the FBiH-vs-RS entity/region differences.

## Section 2 -- Regime Choice (sole proprietor)

**Regime Choice (sole proprietor)**

| Route | Treatment | Best when |
| --- | --- | --- |
| **Small entrepreneur — 2% of revenue** | Flat **2% of total revenue**, no expense deductions | Low real expenses, small turnover |
| **Net-profit basis** | 10% (FBiH) / 8% (RS) on (revenue − expenses) | Real expenses high relative to revenue |

When real margins are high, the **2%-of-revenue** option is usually far cheaper. **[RESEARCH GAP — reviewer to confirm the small-entrepreneur turnover cap and eligibility.]**

## Section 3 -- Entity / Region (FBiH vs RS)

- **RS PIT and allowance advantage** — RS has a lower PIT (8% vs 10%) and a larger personal allowance (BAM 500/mo vs BAM 300/mo).
- **Social contributions comparison** — RS social contributions are entirely employee-borne (~32.8%); FBiH splits employee/employer and the employer rate was cut to 5% from 1 Jul 2025 (combined 41.5% → 36%) — see bosnia-payroll.md.  _(bosnia-payroll.md)_
- **Region of registration materiality** — Where genuinely free to choose, the region of registration/residence materially affects net pay. AUDIT FLASH POINT — registering in a region without genuine presence is challengeable.

## Section 4 -- Company Extraction (doo)

- **CIT and dividend extraction** — 10% CIT on profit; 0% dividend tax on distribution → a very efficient extraction once profit justifies a company.
- **Salary vs dividends balance** — Owner balances a (contribution-bearing) salary against tax-free dividends — salary must be genuine.

## Section 5 -- Red Lines (do not cross)

- **Disguised employment** — Disguised employment: single-client sole proprietor under employer-like control → reclassification. AUDIT FLASH POINT.
- **Region shopping** — Region shopping without genuine presence/substance is challengeable.
- **No double-counting of expenses** — The 2%-of-revenue option excludes real-expense deductions — don't double-count.

## PROHIBITIONS

- **Prohibition 1** — NEVER combine the 2%-of-revenue regime with real-expense deductions.
- **Prohibition 2** — NEVER register in RS/FBiH purely for the rate without genuine presence.
- **Prohibition 3** — NEVER present single-client work as safe self-employment.
- **Prohibition 4** — NEVER contradict the rates in bosnia-income-tax.md / bosnia-social-contributions.md / bosnia-payroll.md (RS employee total 32.8%; FBiH 1 Jul 2025 reform).  _(bosnia-income-tax.md; bosnia-social-contributions.md; bosnia-payroll.md)_
- **Prohibition 5** — NEVER present [RESEARCH GAP] figures as confirmed, nor optimisation as definitive advice — route to a licensed Bosnian tax adviser.

## Disclaimer

This skill and its outputs are provided for informational and computational purposes only and do not constitute tax, legal, or financial advice. Open Accountants and its contributors accept no liability for any errors, omissions, or outcomes arising from the use of this skill. All outputs must be reviewed and signed off by a qualified professional (such as a licensed tax adviser in Bosnia and Herzegovina) before acting upon.

The most up-to-date, verified version of this skill is maintained at [openaccountants.com](https://openaccountants.com). Log in to access the latest version, request a professional review from a licensed accountant, and track updates as tax law changes.

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## Talk to a verified accountant

This guide is maintained by the OpenAccountants network — accountants who put
their name behind the tax answers AI gives people. The live, always-current
version (and the professional behind it) is at
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> **General reference only.** This document does not constitute tax, legal, or
> financial advice. Verify figures against the cited primary sources or with a
> licensed professional before relying on them.

## Today's figures and who stands behind this skill

This file is an AI skill (tax rules your AI follows) from OpenAccountants, copied on 2026-07-13. Rates, thresholds and deadlines change. For the current version of this skill, its official sources and the named accountant (if any) who stands behind it, call `get_skill` with slug `bosnia-tax-optimization` on the OpenAccountants connector (https://www.openaccountants.com/connect), or read https://www.openaccountants.com/skills/bosnia-tax-optimization. If neither is available, confirm every figure against the official source pages cited above before relying on it.

From openaccountants/openaccountants, AGPL-3.0.

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