Joint Audits from Bosnia and Herzegovina's Perspective: Should Domestic Relations Be Arranged First?
Joint Audits from Bosnia and Herzegovina's Perspective: Should Domestic Relations Be Arranged First?

Author(s): Đorđe Marilović
Subject(s): Law, Constitution, Jurisprudence, Fiscal Politics / Budgeting
Published by: Правни факултет Универзитета у Источном Сарајеву
Keywords: Joint audit; Bosnia and Herzegovina; Direct tax; Indirect tax; Tax administration;
Summary/Abstract: Joint audits from Bosnia and Herzegovina's perspective may impose significant challenges unless domestic fiscal relations are arranged prior to any international arrangements. However, present state of affairs concerning this matter shows surprising lack of respect for constitutional fiscal framework and distribution of powers. If not addressed, this problem may significantly impede future Bosnia and Herzegovina's harmonization of legal bases for joint audits in the Western Balkans region and beyond. Bosnia and Herzegovina consist of the two Entities, the Federation of Bosnia and Herzegovina and the Republic of Srpska, which, along with Brčko District of B&H, all have separate and exclusive responsibilities in the matters of direct taxes, while the institutions of Bosnia and Herzegovina assumed responsibility for indirect taxes. Therefore, the institutions of Bosnia and Herzegovina have no control or higher instance power over tax administrations of the Entities.Furthermore, distinction between direct and indirect taxes in certain cases is not clear, which may result in conflicts of jurisdiction. The author examines how these challenges could be overcome, and suggests that existing internal tax competition and race to the bottom could be facilitated to reconsider Bosnia and Herzegovina's hesitation to support and join certain regional economic and tax initiatives.

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