Foreign citizens or legal entities that bought certain goods or services in Bosnia and Herzegovina, have the legal right to a VAT refund for those goods or services provided that certain conditions are met.
According to the Law on VAT refunds, the manner and conditions of exercising the rights of foreign legal entities for returns were insufficiently defined. With the entry of the Rulebook on the Application of the Law on Value Added Tax (“Official Gazette of BiH”, No. 44/20) into force this has changed.
Legal entities registered abroad are entitled to a VAT refund when the following conditions apply:
- A foreign legal entity must be registered as VAT taxpayer in the country it has established business
- A foreign legal entity is not registered and has no obligation to register for VAT in BiH
- It does not have a residence, business unit or other form of permanent of business in BiH
- A foreign legal entity must appoint a registered VAT payer in BiH, representative before the ITA for the purposes of exercising the right to a VAT refund.
- A foreign legal entity must be previously registered in the ITA records and have a record number for the purposes of return
- VAT refund can be requested only for purchases for which (if it were a domestic taxpayer operating in BiH) there would be a right to deduct input tax
- A foreign legal entity must have original copies of invoices for the procurement of goods and services in BiH, issued in accordance with Article 55 of the Law.
The request for a VAT refund must be submitted by the legal entity no later than June 30th of the current year for any procurement from the previous year, and the same cannot be submitted for a period shorter than three months and longer than 12 months during one calendar year.
When it comes to refunds, the minimum amount to be refunded is 800,00 BAM, except in cases where the application is submitted for the entire calendar year. In that case, a lower amount of VAT refund can be realized, but not lower than 100,00 BAM.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.