Rental Income Tax in Bosnia and Herzegovina
Rental income from property in Bosnia and Herzegovina is taxed at entity level. The Federation of BiH and the Republika Srpska have separate personal income tax laws governing the taxation of rental income.
Rental taxation in the Federation of BiH
In the Federation of BiH, rental income is taxed as property income at a rate of 10%. The tax base is reduced by notional expenses as prescribed by cantonal law (generally up to 20-30% of income). Taxpayers must file an annual return with the cantonal tax authority. Short-term tourist accommodation rentals are governed by special cantonal-level regulations.
Rental taxation in the Republika Srpska
In the Republika Srpska, rental income is taxed at a rate of 10%. The taxpayer is entitled to deduct actual costs or notional expenses (up to 25% of income under RS law). The tax return is submitted to the RS Tax Administration by 31 March for the previous year. Short-term tourist rental income must also be declared and is subject to the same rates.
Registration obligations and common aspects
Landlords in BiH must declare rental income to the relevant tax authority (FBiH or RS depending on the entity where the property is located). It is advisable to have the lease agreement notarised for legal certainty. If rental income is the only source of income and is below a certain threshold, tax relief may be available. Properties in the Brčko District are subject to Brčko District rules.
Frequently Asked Questions
Do I need to declare rental income from an apartment in the FBiH?
Yes. Rental income must be declared to the cantonal tax authority in the FBiH. The tax rate is 10% and notional expenses reduce the tax base. Procedures vary between cantons; consultation with a local tax advisor is recommended.
What is the difference between rental taxation in the FBiH and the RS?
Both entities apply a 10% rate, but differ in the level of notional expense deductions and filing procedures. The FBiH has cantonal decentralisation, while the RS has a more unified centralised system. Checking local implementing regulations is advised.
Does a rental agreement need to be notarised in BiH?
It is not legally required, but it is recommended for legal certainty and proof of the terms of the rental in the event of a dispute. Notarisation of the agreement is common practice in BiH.