Employer in FBiH to file withholding tax for employee residing in RS

SARAJEVO, (Patra) - The Tax Administration of the Federation of BiH has received a significant number of inquiries from taxpayers in the Federation of BiH who employ workers residing in the Republika Srpska (RS), regarding the legal basis for imposing misdemeanor sanctions for failure to submit Monthly Withholding Tax Returns - Form MOP-1002, according to the regulations of Republika Srpska.

In accordance with the above, we point out that the provisions of Article 23, Paragraph 1 of the Law on Contributions of RS ("Official Gazette of RS" No. 114/17) stipulate that contributors of contributions are obliged to submit a calculation of contributions to the Tax Administration of RS no later than the end of the month for the previous month. This calculation must be submitted by contributors on Form MOP-1002, which is an integral part of the Rulebook on the Application of the Law on Income Tax.

The employer - a resident of the Federation of BiH is obliged to file a withholding tax return for their employee who resides in the territory of RS. The legal basis for imposing a fine by a misdemeanor order is Article 14, point v) of the Law on Tax Procedure of RS, which, among other things, stipulates that the taxpayer has the right and obligation to submit tax returns in the form, place, and at the time prescribed by law. The Tax Administration of the Federation of BiH calls on employers - residents of the Federation of BiH who employ workers residing in Republika Srpska, to, in accordance with the aforementioned laws, submit the prescribed tax returns and thus avoid the monetary sanctions prescribed by the Law on Tax Procedure of RS and the Law on Contributions of RS.

"The aforementioned laws prescribe fines from 1,000 KM to 3,000 KM for taxpayers, legal entities or other entities, if they do not submit a tax return or do not submit a tax return in the manner and within the deadline prescribed by tax regulations," the Tax Administration announced.