Amendments To The CIT Law Of The Republic Of Srpska Introduce Incentives For Investments

On July 17, 2019, the National Assembly of the Republic of Srpska adopted amendments to the Corporate Income Tax Lax.

The most significant changes relate to the different regulation of the tax deduction for investments in manufacturing. The main objective of the new regulation is to increase investments in production activities. Consequently, a taxpayer that invests in equipment for production activities will be entitled to decrease the tax base for the value of the investment made. The Minister of Finance will determine a list of industries eligible for taking advantage of these incentives based on the Regulation on the classification of activities.

As of January 1, 2020, the taxpayers will be able to decrease the tax base for the total amount of investment in a production plant and equipment.

The previous solution was less beneficial as taxpayers could reduce the amount of tax liability by 30% under the condition that they made an investment in an amount exceeding 50% of the profit of the current tax period.

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