VAT and invoicing in Bosnia and Herzegovina (2026): 17% PDV

VAT in Bosnia and Herzegovina is refreshingly simple on paper: one rate, one tax authority for the whole country, one monthly return. What makes it tricky is the layer underneath: fiscalization of sales is run by the entities, so a shop in Banja Luka and a shop in Sarajevo work with different systems. This guide covers the state-level VAT rules, invoice content and the entity fiscalization systems, with a worked example in convertible marks (BAM, KM). Rules are as of October 2026.

PDV at a glance: one rate, one authority

The tax is porez na dodanu vrijednost (PDV), governed by the state-level Law on VAT (Zakon o porezu na dodanu vrijednost) and administered by the Indirect Taxation Authority (Uprava za indirektno oporezivanje, UIO), based in Banja Luka. It applies equally throughout the country.

There is no reduced rate: food, medicines and books are taxed at 17% like everything else.

One newer feature: since 2025 the law lets residents buying their first newly built home claim a refund of the VAT, under conditions set in a rulebook that has applied since 8 July 2026.

Who must register for VAT

• Threshold: you must register when your taxable turnover in the previous year exceeded, or is likely to exceed, BAM 100,000. The threshold was raised from BAM 50,000 by an amendment published in November 2023. Turnover of related or commonly controlled businesses is added together.
• Deadlines: apply by the 20th of the month after the month you crossed the threshold; a new business that expects to exceed it applies at least eight days before it starts trading. UIO decides within 15 days.
• Voluntary registration: possible at any time below the threshold, but it binds you for at least 60 months.
• Leaving the system: you can deregister if your turnover in the previous calendar year did not exceed the threshold.
• Foreign businesses: foreign providers of electronically supplied services, such as software, hosting and digital content, must appoint a tax representative and register, under rules adopted in 2025.

Every business has a 13-digit identification number (JIB/PIB) issued by the entity or Brčko District tax administration. The 12-digit VAT number (PDV broj) that UIO assigns is derived from it by dropping the leading digit 4.

VAT returns and payment

In April 2025 the House of Representatives adopted a proposal to move the deadline to the 20th, but it did not complete the parliamentary procedure: as of October 2026 the deadline is still the 10th.

What an invoice must show

The Law on VAT (Article 55) requires a tax invoice for every taxable supply and for advance payments, and the VAT Rulebook lists its contents:

1. 1Your name, address and VAT number
2. 2Place and date of issue
3. 3Invoice number
4. 4Date of supply
5. 5The customer's name, address and VAT number (where the customer has one)
6. 6Trade name, type, quantity and price of the goods or services
7. 7Unit value without VAT
8. 8Total without VAT
9. 9The VAT rate and the total VAT
10. 10Total including VAT
11. 11For supplies without VAT, the article of the law under which no VAT is charged

Other rules:

• Copies: invoices are issued in at least two copies.
• Advances: an advance invoice is marked “faktura-avans” and is cancelled when the final invoice is issued.
• Corrections: returns, discounts given after the invoice and additional payments are documented with a credit or debit notice (knjižno obavještenje).
• Non-registered suppliers must not show VAT on their invoices; VAT shown in error must still be paid to UIO.
• Receipts: under the VAT Rulebook a fiscal receipt supports input VAT deduction only up to KM 100 in total, so ask for a tax invoice for larger business purchases.
• Ledgers: you keep a book of issued invoices (KIF) and a book of received invoices (KUF).
• Foreign currency: amounts in a foreign currency are converted at the Central Bank of Bosnia and Herzegovina's middle rate on the day the tax liability arises.
• Record keeping: keep invoices and records at least until the limitation period runs out: five years for assessment and collection, extendable to ten.

Fiscalization and e-invoicing

No state-level e-invoicing

There is no state-level law making structured e-invoices mandatory, and none is listed among UIO's regulations. Electronic invoices are used by agreement between the parties.

Fiscalization is run by the entities

If you sell in both entities, you need a fiscal solution that is approved in each. Clientlly does not connect to the entity fiscalization systems, so you need an approved fiscal device or service for that part.

Worked example in convertible marks

A small software company in Sarajevo sells to local clients and exports equipment. In September:

It buys computers for KM 5,000 plus KM 850 PDV and software licences for KM 3,000 plus KM 510 PDV. Input VAT is KM 1,360.

PDV payable = KM 3,400 − KM 1,360 = KM 2,040, filed and paid by 10 October 2026. To find the VAT inside a gross price, multiply by 17 and divide by 117: KM 117 × 17 ÷ 117 = KM 17.

Common mistakes

1. 1Applying a reduced rate that does not exist. Food, medicines and books are all at 17%.
2. 2Paying on the 20th because of the 2025 news. The proposal never became law; the deadline is the 10th.
3. 3Measuring the threshold on the wrong period. The test is turnover in the previous year, including related businesses.
4. 4Registering voluntarily without a plan: you are bound for 60 months.
5. 5Claiming input VAT on a fiscal receipt for a large purchase, instead of asking for a tax invoice.
6. 6Assuming the Federation and Republika Srpska fiscalize the same way. They do not.

How Clientlly helps

Clientlly takes care of the invoicing and bookkeeping work around your monthly PDV return. Invoices are numbered sequentially per series and carry the 17% rate; credit notes are linked to the original invoice; and the PDF is produced in your client's language, with a card payment link. You see when an invoice was opened, automatic reminders go out 3, 14 and 30 days after the due date, and recurring invoices and multiple currencies are supported. Scanned receipts have their VAT read automatically, sales and purchase VAT books are kept per rate, including exports, and tax reports with Excel and PDF exports are ready for you and your accountant. Import clients, suppliers, products and opening balances from Excel or CSV, and work from the mobile app. Clientlly is not connected to the entity fiscalization systems, so keep an approved fiscal solution for your retail sales. See invoicing, accounting and how to get paid faster.