UIO to start controls of short-term residential unit renters from June: Here's how to avoid fines

(Patria) - The Indirect Taxation Authority (UIO) has conducted an analysis showing that there is a significant number of short-term residential unit renters in Bosnia and Herzegovina who are not registered for VAT, although available data indicates that they achieve turnover above the legally prescribed threshold for mandatory registration.

Therefore, the UIO will begin intensified controls of taxpayers engaged in short-term rental of residential units, and field activities will be carried out twice during 2026, with the first cycle starting in June of this year. The controls will cover all taxpayers in the territory of Bosnia and Herzegovina, regardless of their group affiliation.

The Authority hereby invites individuals who are not registered for VAT, but are engaged in short-term rental of residential units and achieve an annual turnover exceeding KM 100,000, to submit a request for registration in the VAT system as soon as possible, and thus avoid penalties for registration by default.

Furthermore, the UIO hereby invites all already registered VAT payers to review their accounting records and VAT returns once again, and if they notice any irregularities, to possibly amend their VAT returns before the start of the announced control activities, in order to issue as few penalty orders as possible during the controls.

In addition to the above, we draw the attention of individuals who use platforms of foreign entities (such as Booking, Locktrip, Airbnb, etc.) when renting residential units for short terms to the obligation to calculate and pay VAT on received services in accordance with the Instruction on Procedures for Submitting VAT Returns by Recipients of Services from Entities Not Having Headquarters in BiH and Entities in a Special Construction Scheme ("Official Gazette of BiH", No. 24/07), regardless of the amount of turnover achieved during the calendar year.

We remind you that the Strategy for Improving Compliance with Regulations of the UIO for the period 2025–2027 identified risk areas, including short-term rental of residential units, which is why a special focus of the Authority's inspectors' control activities in 2026 will be directed at individuals engaged in this activity.