SINGLE INCOME TAX RATE IN FBIH ENTITY FROM 2009

SARAJEVO, Bosnia (January 13,2008) - The FBIH Entity House of Representatives adopted two tax policy laws this week – the Bill on Amendments to the Contributions Act and the Income Tax Bill.

The FBIH entity government has given up on the initial idea to have a two-tier income tax rate (10 per cent and 15 per cent), and eventually proposed a flat rate of 10 per cent. Under the adopted document, the non-taxable amount of personal income is 3,600 Bosnian Marks a year, and 300 Bosnian Marks a month. Income tax will not be paid on dividend payments, prizes (quiz shows) of up to 1,000 Bosnian Marks, pensions, child allowances,etc..

The overall rate of contributions on salaries was reduced from 32 per cent to 31 per cent.The FBIH Entity Prime Minister Nedzad Brankovic announced that the government would look into possibilities of further decreasing the rate by three per cent next year. On the condition that these bills are adopted by the House of Peoples, the laws will come into effect on January 1, 2009