Key takeaways
- Bosnia and Herzegovina has three separate personal income tax systems – the Federation of BiH (FBiH), Republika Srpska (RS) and Brčko District (BD) – so your tax residence is determined by entity, not just at state level.
- In each entity you are resident if you have residence/permanent residence there or stay 183 days or more (FBiH: in a calendar year; RS: in any 12-month period starting or ending in the tax year; BD: in any tax period).
- Flat rates make Bosnia attractive: 10% in FBiH and Brčko, 8% in Republika Srpska (with a 2%-of-revenue option for small entrepreneurs in RS); FBiH residents are taxed on worldwide income.
Last reviewed: October 2026
Bosnia and Herzegovina combines low flat income tax rates with a low cost of living and proximity to the EU. But its constitutional structure means you deal with entity-level tax administrations. This guide explains how residence works in each entity, how to obtain residence as a foreigner and what location-independent professionals should plan for in 2026.
Bosnia and Herzegovina tax residency – key figures (2026)
| Item | FBiH | Republika Srpska | Brčko District |
|---|---|---|---|
| Residence test | Residency in FBiH or ≥ 183 days in a calendar year | Permanent residence, ≥ 183 days in a 12-month period, or permanent home + centre of vital interests | Residence in BD or ≥ 183 days in a tax period (+ special employment cases) |
| Personal income tax | Flat 10% | Flat 8% (small entrepreneurs: 2% of revenue) | Flat 10% |
| Scope for residents | Worldwide income | Worldwide income for residents | Worldwide income for residents |
| Social contributions | About 31% employee + 10.5% employer | About 31% of gross (employee) | Separate Brčko rates |
| VAT (state level) | 17% | 17% | 17% |
How tax residence works in each entity
Federation of Bosnia and Herzegovina (Sarajevo, Mostar, Tuzla): you are resident if you have residency in FBiH or reside there continuously or in intervals for 183 days or more in a calendar year. Residents are taxed on worldwide income at 10%.
Republika Srpska (Banja Luka, East Sarajevo): you are resident with permanent residence in RS, a stay of 183 days or more in any 12-month period beginning or ending in the tax year, or a permanent place of living and centre of vital interests in RS. The rate is 8%; small entrepreneurs can pay 2% of total annual revenue.
Brčko District: residence in BD or 183+ days in a tax period, plus special rules for people employed by BD institutions or BD-based employers.
How to become resident as a foreigner
- Obtain a temporary residence permit from the Service for Foreigners' Affairs – grounds include employment (with a work permit), business ownership, family reunification, property ownership or other justified reasons.
- Register your address with the police within the deadline after arrival.
- Obtain a tax identification number from the entity tax administration (individuals are identified by their personal identification number, JMB; JIB is the number issued to businesses).
- Register for health insurance and social contributions where applicable.
- After five years of continuous temporary residence, apply for permanent residence.
Example: A Croatian-born product manager working remotely for a Dutch company moves to Banja Luka and stays 250 days in 2026. She is resident in Republika Srpska and taxed there at 8% on her income (subject to the Netherlands–BiH treaty and the RS rules on foreign income). If she had moved to Sarajevo instead, FBiH would tax her worldwide income at 10%.
Points for location-independent professionals
- Remote workers and freelancers: choose your entity deliberately – rates, social contributions and administrative practice differ.
- Small entrepreneur status in RS (2% of revenue) can be attractive for freelancers with low costs, within turnover limits.
- Home-country exit: Bosnia's low rates only help if you cease residence at home; EU countries may apply exit or continued-residence rules.
- Treaties: Bosnia and Herzegovina has treaties with many European countries (often inherited from former Yugoslavia).
Frequently asked questions
How do I become a tax resident in Bosnia and Herzegovina?
Obtain a residence permit, register your address and either have residence in an entity or stay there 183 days or more (calendar year in FBiH, any 12-month period in RS). Residence is determined at entity level – FBiH, Republika Srpska or Brčko District.
What is the income tax rate in Bosnia?
A flat 10% in the Federation of BiH and Brčko District, and 8% in Republika Srpska, where small entrepreneurs can pay 2% of annual revenue instead.
Is foreign income taxed in Bosnia and Herzegovina?
FBiH residents are taxed on worldwide income. Republika Srpska also brings foreign-source income into scope under its own rules. Tax treaties can relieve double taxation.
Can I get a residence permit in Bosnia as a remote worker?
There is no specific digital nomad visa; foreigners need a temporary residence permit on recognised grounds such as employment, business, family or property. Check the current grounds with the Service for Foreigners' Affairs.
Related guides
- How to obtain tax residency in Serbia
- How to obtain tax residency in Croatia
- Leaving Bosnia: ending your tax residency
Sources
- PwC Worldwide Tax Summaries – Bosnia and Herzegovina: Residence
- PwC Worldwide Tax Summaries – Bosnia and Herzegovina: Taxes on personal income
- Tax Administration of FBiH; Tax Administration of Republika Srpska; Service for Foreigners' Affairs
This guide is general information, not personalised tax or immigration advice.
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