Banja Luka

Salary from a foreign employer or fees from foreign clients

Taxed10% flat (Federation and Brčko); 8% on salary and 10% on self-employment profit (Republika Srpska); plus social contributions of about 31%

Federation residents are taxed on income earned anywhere, and a non-resident who works on Federation territory is also taxed on that pay (Article 2). Salary from a foreign employer is taxed at 10% on gross pay minus employee contributions and a personal allowance of KM 3,600 a year (KM 300 a month); no local payer withholds it, so you calculate and pay the advance tax yourself within five days of being paid and file an annual return (Articles 9, 11, 24 and 27). A Federation resident working there for a non-resident employer also owes contributions of 31% from pay (17% pension, 12.5% health, 1.5% unemployment) plus 5% on top, unless a treaty or social-security agreement says otherwise, and for work for a foreign employer the base cannot be lower than the average Federation salary (Contributions Law, Articles 5, 6 and 10). Freelancers register a self-employed activity and pay 10% on profit, plus 31% contributions on a deemed monthly base of KM 2,710 for liberal professions in 2026. In Republika Srpska, salary is taxed at 8% of gross pay minus a KM 12,000 annual allowance, self-assessed within seven days of receipt if the payer does not withhold (Article 66), and contributions total 31% of gross. Self-employment profit pays 10%, or a small entrepreneur can pay 2% of turnover (see regimes). Tax paid abroad or in another part of Bosnia and Herzegovina is credited up to the local tax on that income in both entities.

On the nomad visa

Bosnia and Herzegovina has no digital nomad or remote-work permit. Citizens of listed countries, including EU and Schengen states, can stay visa-free up to 90 days in six months; longer stays need a long-stay visa D, issued only exceptionally, or an ordinary temporary residence permit. Tax follows the general rules: work done while in the country is taxable locally even before you become resident, and at 183 days or with a domicile you are taxed on worldwide income.

Dividends, interest, gains, rent and pensions from abroad

Reduced rateDividends, bank interest and pensions exempt; rent 10% after a 30% cost deduction (Federation) or 13% after 20% (Republika Srpska); share gains untaxed in the Federation, 13% in Republika Srpska

In the Federation, dividends and profit shares and a resident's pension, whether earned abroad or at home, are not income at all, and interest on bank savings and accounts and on government bonds is exempt (Articles 5 and 6). The law lists as taxable capital income only interest on loans you make and certain insurance payouts, taxed at 10% with no deductions (Article 22), and it has no category for gains on shares or crypto. This profile found no provision taxing them, so confirm before relying on it. Rent pays 10% after actual costs or a flat 30% deduction (50% for tourist lets), and a gain on selling property pays 10% unless it was your home or you held it more than three years (Article 20). In Republika Srpska, dividends, bank interest and pensions are also exempt (Article 8); the wording is not limited to local payers. Rent, interest on loans and capital gains pay 13%, with a 20% flat cost deduction on rent (Article 34). From 2026 the seven-year holding exemption covers only real estate, so gains on shares and other investment assets pay 13% however long you held them. Also from 2026 you must report exempt income on a return (Article 61b). Republika Srpska charges health contributions on pensions received from abroad.

Net wealth and inheritance

No wealth taxInheritance tax applies

There is no net wealth tax. Inheritance and gift tax is cantonal in the Federation. In Sarajevo Canton, inheritances pay 8% and gifts 10% of assessed value, on real estate in the canton and on movable items such as cash, receivables and securities worth over KM 5,000 each. First-order heirs (children and spouse), parents, and gifts to children, spouse or parents are exempt. A proposal sent to the cantonal assembly in September 2025 would widen the movable-property rules and exemptions; it had not been confirmed as adopted. Buyers of real estate in Sarajevo Canton pay a 5% transfer tax. Other cantons set their own rates. Republika Srpska has no separate inheritance tax: inheritances, gifts between lineal relatives, spouses and siblings, and gifts up to KM 10,000 a year are exempt from income tax, which suggests larger gifts from others are taxed as income; this profile did not confirm the rate. Republika Srpska levies an annual real estate tax on assessed market value.

Tax resident after

183 days a year

Top income tax rate

10%

When you become tax resident

You are taxed by the entity where you live. In the Federation you are resident if you have your registered domicile (prebivalište) there or stay there 183 days or more, with or without breaks, in a calendar year (Income Tax Law, Article 2). In Republika Srpska you are resident if you have your domicile there, stay 183 days or more in any 12-month period that starts or ends in the tax year, or have a permanent home there plus a centre of vital interests, such as property worth over KM 300,000, a company stake over KM 100,000, marriage to a citizen, a work permit or studies (RS Income Tax Law, Article 6). A flat or house you own or rent that is not for short stays counts as a permanent home. Brčko District also uses 183 days. A visa-free stay of up to 90 days in six months will not reach 183 days on its own, but both entities tax pay for work done on their territory even for non-residents.

Top income tax rate

Sarajevo is in the Federation, which taxes all income at a flat 10% with no cantonal or municipal income tax. For salary it applies from the first mark of taxable income, after deducting employee contributions (31%) and the KM 3,600 annual personal allowance. Contributions are not included in the 10%. Brčko District also charges 10%. In Republika Srpska salary pays 8%, self-employment profit 10% and investment and other income 13%, so the range across the country is 8%–13% depending on entity and income type.