Republic Of Srpska: Tax On Savings And Dividends

• Published date: 21 July 2021
• Subject Matter: Tax, Income Tax, Sales Taxes: VAT, GST
• Law Firm: Eurofast
• Author: Ms Slavica Zeljkovic

The Government of the Republic of Srpska plans to tax dividends and income from the share in the company's profit, rather than income based on interest on citizen's savings, and taxation of the total gross salary.

They stated that the goal of the measure is to relieve the burden of the economy and create more favorable conditions for the business of economic entities of the Republic of Srpska. This will lead to a rise in the competitiveness of the economy, higher employment in the population, an increase in the salaries of employees and better collection of public revenues.

To achieve that, the Government plans to carry out several activities:

Reduction of the cumulative contribution rate

Which is now 32,8 percent of the gross salary, and they have planned to further decrease that rate and reduce the total workload to the level of 2008, i.e., 30,6 percent. To achieve this, they must change Law on Contributions which would be finalised by 2025.

Expansion of the Tax base and the Base of Income Tax and Profit Tax

The goal of the RS Government is to introduce Income tax and Profit tax on all dividends and income from the share of profit of the legal entities, instead of taxation of income based on interest on citizen's savings , and taxation of total gross salary. The goal for this activity is also to be completed by 2025, and to...