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10. INCENTIVES AND SPECIAL REGIMES

FBiH

Investment incentive

Taxpayers investing their own resources in production equipment, worth more than 50% of realized profit in a tax period are eligible for tax relief of 30% of CIT in the year of the investment.

A taxpayer investing minimum BAM 20 million in production facilities (property, plant and machinery) within the territory of FBiH for 5 consecutive years will be eligible for 50% CIT exemption for a period of 5 years, provided it invests minimum BAM 4 million in the first year.

Employment incentive

A taxpayer employing new employees is entitled to a deduction of double the amount of gross salary paid to such new employees, if the following conditions are fulfilled:

  • Duration of employment contract is for a minimum period of 12 months on a full-time basis; and
  • New employees have not been employed by the taxpayer or by any related party in the past 5 years.

RS

Investment incentive for Production Companies

Taxpayers investing in property, plant and equipment, for the purposes of its own production activity, in an amount more than 50% of realized profit in a tax period, are eligible for tax relief of 30% of CIT in the year of the investment.

If the company disposes of the investments within 3 years of the year for which the tax incentive was used, the company is required to pay the additional tax and penalty, as if the incentive was never used.

Employment incentive

If a company employs 30 new employees (for an indefinite period of time during the tax period, a deduction to the extent of personal income tax and social security contributions of those employees is allowed to the company.

If the employees leave within 3 years in respect of whom the tax incentive was allowed, the company is required to pay the additional tax and penalty as if, the incentive was never used.

BD

Investment incentive

A legal entity registered in BD invests in machinery and equipment for its own business activity / production is eligible for a deduction of the amount of investment made by such entity.

Employment incentive

If a company employs new employees for an indefinite period of time in a tax period, deduction is allowed to the extent of paid gross salaries for the new employees.