Magazinović's Initiative: Introduce Tax in BiH for Facebook, Google...

(Patria) - SDP MP in the House of Representatives of the Parliamentary Assembly of BiH Saša Magazinović today submitted an initiative for the adoption of the Law on Digital Services Tax, which would enable BiH to collect taxes from large technology companies such as Facebook and Google.

"If our small companies pay taxes, there is no reason why Facebook and Google should not pay taxes," Magazinović wrote on social networks, along with the initiative document sent to the Council of Ministers.

The initiative states that large global technology and digital companies have significantly increased advertising, intermediation, and sale of user interface data in BiH in recent years, but that according to all available information, they do not pay taxes in BiH for the services they provide.

"The current legal framework and taxation principles are outdated and based on 20th-century business models. The right of the state, in this case BiH, to collect taxes is currently linked to the physical presence of the company (or branch/representative office) in a particular country," the document states.

Magazinović requested an opinion from the Indirect Taxation Authority of BiH, which stated that the largest technology companies on whose platforms advertising for the BiH market is conducted have no registration in BiH, nor do they have an authorized representative with whom communication and agreements could be made regarding compliance with the country's legal system.

The ITA also says that, according to the law, the obligations towards the state for these services, in cases where large platforms do not pay taxes, should be paid by the natural or legal person ordering the advertisements, but they could not determine if this is happening in practice.

"The current position of the ITA of BiH, according to which the person paying for advertising on Facebook should pay taxes, not the company, is unsustainable and unenforceable. In addition, large technology companies earn not only from advertising but also from selling information about their users," says Magazinović in the initiative.