Сукоб пореских закона у погледу пореза на доходак Федерације БиХ, Републике Српске и Брчко Дистрикта БиХ
Domestic Personal Income Tax Law Conflict - Federation of Bosnia and Herzegovina, Republic of Srpska, Brčko District of Bosnia and Herzegovina

Author(s): Đorđe Marilović
Subject(s): Law on Economics, Public Finances, Fiscal Politics / Budgeting
Published by: Правни факултет Универзитета у Источном Сарајеву
Keywords: Domestic double taxation;Federation of Bosnia and Herzegovina;Republic of Srpska;Brčko District of Bosnia and Herzegovina;Personal income tax;Tax law conflict;
Summary/Abstract: In this paper, internal double taxation is analyzed in regard to income taxes in Federation of Bosnia and Herzegovina, Republic of Srpska and Brčко District of Bosnia and Herzegovina. Residency rules are compared, since it is an important principle on which jurisdiction to impose income tax is based. The lack of domestic tie-breaker rule is evident, which can be explained by constitutional status and competences of the entities (Federation of Bosnia and Herzegovina, Republic of Srpska) and the District to tax income of individuals in a sovereign manner. Therefore, existing unilateral measures are considered, such as providing for credit method. Although double taxation can lead to undesired effects in economy and individual behavior, there is a possibility of indirect harmonization of local legal systems. The fact that it is officially stated that the reason for excluding certain categories of income from taxation is tax competition (whereas those categories are already exempt in the competing jurisdiction) confirms the previous statement. This leads to the conclusion that harmonizing tax laws does not necessarily happen through local tie-breaker rule provisions, for local tax jurisdictions’ competition can bring about significant tax harmonization. The author concludes that signing trilateral convention for the prevention of the double taxation of income between the three tax jurisdictions could solve the existing problem of possible double taxation in Bosnia and Herzegovina.

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