Page 11 - Central and Eastern European Transfer Pricing Review

Bosnia and Herzegovina | 11

Bosnia and

Herzegovina

KPMG's Views on Transfer Pricing in Bosnia
and Herzegovina

Bosnia and Herzegovina (BiH) consists of two territorial and administrative
entities: the Federation of Bosnia and Herzegovina (FBiH) and the Republic of
Srpska (RS), as well as the District of Brcko (BD). Corporate Proft Tax legislation
is enacted on the level of the FBiH, the RS and the BD. Given that the BD
represents approximately 1 percent of BiH, it will be given no further consideration
in information presented here.
Companies doing business in BiH should be aware that different transfer pricing rules
apply in the FBiH and in the RS.

Federation of Bosnia and What is the statute of limitations length. There is no guidance on how
Herzegovina (FBiH) on assessment of transfer pricing market prices should be determined
adjustments? (information on available methods
Basic information Statute of limitations is 5 years and it follows), and there is no developed
commences from the date when the tax practice on which to rely.
Tax authority name return was submitted or from the date Apart from disclosures on the tax return,
Federalno Ministarstvo fnansija, Porezna when the tax liability arose, counting no other requirements to disclose are
uprava FBiH (Federal Ministry of Finance, from the date that comes later (e.g. for prescribed.
tax authority of the FBiH). the 2012 year, the statute of limitations
expires at the end of 2018). What types of transfer pricing
Citation for transfer pricing rules information must be disclosed?
Articles 45 to 48 of the FBiH Corporate Transfer pricing See Transfer pricing disclosure overview.
Proft Tax Law (CPT Law). Arms length
principle applies. disclosure overview What are the consequences
Are disclosures related to transfer of failure to prepare or submit
Effective date of transfer pricing pricing required to be prepared or disclosures?
rules submitted to the revenue authority See Transfer pricing disclosure overview.
1 January 2008. on an annual basis (e.g. with the
tax return)?
What is the relationship threshold The FBiH CPT Law requires a taxpayer Transfer pricing study
for transfer pricing rules to apply to disclose on the annual tax return its overview
between parties?
transactions with related parties and Is preparation of a transfer pricing
The defnition of related parties is very market prices. Even though there is no study required i.e. can the
broad and includes a physical or legal offcial guidance on this subject, we taxpayer be penalized for mere
entity which has signifcant infuence or are of the view that this applies only to failure to prepare a study?
control on business decisions (no specifc transfer prices which are not at arms
thresholds). Applies to transactions length. The tax base should be adjusted Not explicitly stated in the CPT Laws.
between residents and non-residents. for the difference between market and However, the tax authority have recently
transfer prices which are not at arms started requesting that transfer price
studies be prepared.

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