VAT refund to foreign legal entities – Tax

Bosnia and Herzegovina: Refund of VAT to foreign legal persons

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Foreign citizens or legal persons who have purchased certain goods or services in Bosnia and Herzegovina are legally entitled to a VAT refund for such goods or services provided certain conditions are met.

According to the law on VAT reimbursement, the terms and conditions for exercising the rights of foreign legal persons in matters of declarations were insufficiently defined. With the entry into force of the Regulation on the Application of the Law on Value Added Tax (“Official Gazette of Bosnia and Herzegovina”, No. 44/20) this has changed.

Legal persons registered abroad are entitled to a refund of VAT when the following conditions apply:

  • A foreign legal person must be registered as subject to VAT in the country where it has established its activity
  • A foreign legal person is not registered and has no obligation to register for VAT in Bosnia and Herzegovina
  • It does not have a permanent residence, business unit or other form of business in Bosnia and Herzegovina
  • A foreign legal person must appoint a VAT taxable person registered in Bosnia and Herzegovina, representative to the ITA for the purpose of exercising the right to VAT refund.
  • A foreign legal entity must be previously registered in the ITA records and have a registration number for the purpose of return
  • The VAT refund can only be claimed for purchases for which (if it was a domestic taxpayer operating in Bosnia and Herzegovina) there would be a right to deduct input tax
  • A foreign legal person must have original copies of invoices for the purchase of goods and services in Bosnia and Herzegovina, issued in accordance with Article 55 of the Law.

The request for VAT refund must be submitted by the legal person no later than June 30e of the current year for any contract of the previous year, and it cannot be submitted for a period of less than three months and more than 12 months during a calendar year.

Regarding reimbursements, the minimum amount to be reimbursed is 800.00 BAM, except in cases where the request is made for the entire calendar year. In this case, a lower amount of VAT refund can be made, but not lower than 100.00 BAM.

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.

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