UIO BiH: Aesthetic surgery providers under scrutiny, not paying VAT on services despite obligation

(Patria) - The Indirect Taxation Authority of Bosnia and Herzegovina has informed business entities that in the coming period, special attention will be paid to VAT controls of entities providing Botox, liposuction, and hyaluronic filler injection services.

As stated, there has been a noticeable increase in the demand for these services in Bosnia and Herzegovina recently.

"We hereby inform all taxpayers that the UIO, in order to improve compliance with regulations, is developing dedicated programs to enhance tax discipline in certain risk areas. Given the noticeable increase in demand for aesthetic surgery and beautification services in BiH, such as hair transplantation, eyelid correction, Botox and hyaluronic filler injections, liposuction, silicone implant placement, etc., the targeted segment for VAT controls in 2025 will be individuals providing the aforementioned services," they stated.

They also explained that these services are subject to VAT.

"Considering that according to the healthcare laws in BiH, aesthetic procedures and beautification of the human body are not classified as preventive, diagnostic-therapeutic, and rehabilitation services that are exempt from VAT, aesthetic surgery and beautification services are subject to VAT taxation, regardless of whether they are provided by medical doctors or whether they are provided by legal entities in private or public ownership," the UIO BiH announced.

Analysis has determined that the number of individuals in BiH providing aesthetic surgery and beautification services aimed at correcting aesthetic defects and beautifying the human body has increased.

"These individuals generate turnovers that exceed the prescribed threshold for mandatory VAT registration, and they are not registered in the Unified Register of Indirect Tax Payers of the UIO, nor have they submitted an application for VAT registration to the UIO. In this regard, we hereby invite individuals who are not registered for VAT, but are engaged in providing aesthetic services, and on that basis generate a turnover exceeding BAM 100,000.00 in a calendar year, to submit an application for VAT registration to the Indirect Taxation Authority," they explained.

Furthermore, it is also necessary for VAT payers providing aesthetic procedures to once again review their accounting records and VAT returns, and if they have not calculated VAT on the services in question, to rectify these irregularities and submit amended VAT returns before the start of the announced control activities," the UIO BiH announced.