1 LAW ON TAX PROCEDURE OF REPUBLIC OF SRPSKA Published in the Official Gazette of Republic of Srpska, no. 102/11 of 17 October 2011; corrections published in the Official Gazette of Republic of Srpska, no. 108/11 as of 2 November 2011; Changes and Amendments published in the Official Gazette of Republic of Srpska, no. 67/13 of 8 August 2013, and no. 31/14 as of 24 April 2014.
2 LAW ON TAX PROCEDURE OF REPUBLIC OF SRPSKA I GENERAL PROVISIONS Subject Matter Article 1 This Law shall govern the organization, competences, rights and obligations of Tax Administration of Republic of Srpska, rights and obligations of taxpayers, the tax procedure, payment of tax liabilities, regular and enforced collection of tax liabilities, as well as other forms of termination of tax liabilities, tax audit, legal remedy procedure, supervision, and tax related violations in Republic of Srpska. Definitions Article 2 Terms used in this Law shall have the following meaning: а) tax constitutes any payment obligation, the taxpayer is obliged to pay to the Budget of Republic of Srpska, to budgets of cities, municipalities, and funds, which is deemed irrecoverable, and shall include taxes, social contributions, fees, and charges, b) surtax constitutes any form of payment to the Budget of Republic of Srpska, municipality, city, and funds ensuing from obligation to pay tax, including tax related interest, costs of procedure, and other payments prescribed under tax legislation, as well as misdemeanor fines, c) tax liability constitutes an obligation of payment of due taxes within deadlines prescribed under tax legislation, d) taxpayer shall be the natural or legal person, part of legal person, or other entity obliged to pay tax in line with tax legislation in Republic of Srpska (hereinafter: the Republic), e) tax agent is a person who is required under tax legislation to collect any tax from any other person by withholding or any other method and to pay over such tax, f) taxpayer representative is a person who is authorized by law, general legal act or by contract to conduct some part or all of the affairs of the taxpayer connected with the taxpayer s compliance with tax legislation, g) tax legislation shall include legislative acts pertaining to taxes or to introduction of obligation to pay taxes and tax surcharges, as well as bylaws issued by means of tax laws, h) tax secret is any information about a taxpayer possessed by the Tax Administration of Republic of Srpska (hereinafter: the Tax Administration), and which may be issued to third parties only in cases foreseen under this Law, and i) books and records constitute documentation pertaining to the taxpayer s activities, transactions, payments, and income and expenditures, kept in accordance with tax laws and accounting regulations.
3 Application of the Law Article 3 Provisions of this Law shall apply to tax procedure, whereas in the case of issues not regulated hereunder, the provision of regulations governing general administrative procedure shall apply. Tax secret Article 4 (1) Tax Administration is obliged to provide security and confidentiality of tax information and data collected from taxpayers that may if relinquished damage the taxpayer. (2) A person employed in the Tax Administration is obliged to keep the data and information accessed and obtained in the course of performing work tasks as an official secret. (3) Notwithstanding Paragraph 2 of this Article, Tax Administration is obliged to issue data kept as tax secret to: а) the Ministry of Finance (hereinafter: the Ministry), to other bodies of administration and administrative organizations of the Republic, bodies of local self-governance units, and to institutions exercising public authority, which shall be obliged to keep the received data as an official secret, b) competent Court Institution, Public Prosecutor, and Ministry of Interior, for purpose of establishing tax violation liability and tax related crimes, c) foreign tax authorities in accordance with international agreements, d) other persons with the written consent of the taxpayer, and e) tax administrations in Bosnia and Herzegovina in line with specific agreement. (4) Tax Administration shall provide the Ministry undisturbed and continuous access o taxpayer cards, as well as to its other official records, and the Ministry shall treat such data as official secret. (5) A tax secret shall not include: а) information and data that the taxpayer has specifically stated in writing is not to be considered as a tax secret, b) information and data in a form that cannot be associated with an individual taxpayer, or otherwise identified, c) the name and Taxpayer s Identification Number, d) information and data that may be used in the investigation or procedure concerning tax crimes, e) data from the Unified system used for purposes of system users and pertaining to the scope of work thereof, f) data from the Annual Certificate issued by Tax Administration, if issued to a competent trade union, upon request thereof, for the purpose of protection of rights of workers, and g) data on due but unpaid liability of taxpayers, if issued to the public media or published on the Tax Administration web page in the form of work report. (6) Notwithstanding the Paragraph 3 of this Article, Tax Administration shall, upon written request, issue information pertaining to status of tax liabilities of a taxpayer, to an entity demonstrating legal interest. (7) Legal interest exists in case of an entity engaged in legal relation with tax debtor and having certain receivables in relation to the tax debtor, which is the result of the legal relation thereof.
4 II ORGANIZATION, COMPETENCE, RIGHTS, AND OBLIGATIONS OF THE TAX ADMINISTRATION Organization of Tax Administration Article 5 (1) Tax Administration is an administrative body of the Republic, a constituent part of the Ministry. (2) Tax Administration is seated in Banja Luka. (3) Tax Administration organization includes the Central Office, Regional Centers, Local Offices, and temporary offices, as well as other organizational units as prescribed under bylaw pertaining to internal organization and systematization of positions in Tax Administration. (4) Tax Administration shall be managed by a Director, appointed and suspended by the Government of Republic of Srpska (hereinafter: the Government). Special provisions pertaining to responsibilities of Tax Administration employees Article 6 (1) Labor-legal status, as well as salaries of appointees and employees in Tax Administration shall be subject to regulations pertaining to employment and salaries in administrative bodies of the Republic. (2) In addition to severe violation of work duties established under regulation governing labor-legal status of civil servants and employees in administrative bodies of the Republic, civil servants and employees in Tax Administration shall be liable for severe violation of work duties if they: а) refuse to provide free-of-charge information to taxpayers, upon their request, b) fail to issue tax certificate within prescribed deadline, i.e. fail to issue decision document on denial without objectively justified reason thereto, c) fail to timely update the data entered into tax records, d) fail to timely undertake prescribed measures pertaining to collection of tax liabilities, e) fail to deliver to taxpayer a notice on overpaid taxes, within prescribed deadline, f) purposely or out of mere disregard make an incorrect record on taxpayer s liability in tax records. (3) Internal organization and systematization of workplaces in Tax Administration shall be prescribed by means of a Rulebook issued by the Director, with the consent of the Government. Tax Administration competence Article 7 Tax Administration shall be competent for the following: а) registration and identification of taxpayer, b) assessment of tax liability in line with the law, c) control of legality and regularity in application of tax legislation, including calculation and payment of taxes and interest, d) regular and enforced collection of taxes and tax surcharges, e) control of calculations of gross salaries of employees for the purpose of this Law and
5 provisions of the General Collective Agreement and other agreements concluded in reference thereto, f) detection and prevention of crimes and tax violations within the scope of its competences, and filing of reports to the competent Prosecutor, g) conduct of first instance tax procedures, h) sentencing of protective measures and penalties for tax violations, in line with this Law, i) tax records and tax accounting management, j)management of the fiscal real estate register and other prescribed registers, k) information dissemination and education of taxpayers, at the request thereof, and in reference to current taxes, procedures and tax payment requirements, their rights and obligations, as well as to tax legislation, l) issuance of certificates pertaining to data kept in its official records, m) preparation of work reports, and publishing thereof on the web page of Tax Administration, whereas the format, the contents, the method and requirements of publishing shall be prescribed by the Minister of Finance (hereinafter: the Minister), and n) other affairs in pursuance of the Law. Obligation to provide professional assistance Article 8 Administrative bodies of the Republic, organizations, public companies, institutions, and funds shall provide the necessary professional assistance to Tax Administration for the purpose of implementation of tax legislation. International legal assistance in reference to tax issues Article 9 (1) Tax Administration shall in its work be entitled to seek international legal assistance. (2) For the purpose of this Law, international legal assistance means the right of the Tax Administration to refer to a foreign tax body with a request for assistance in resolving a certain tax case, as well as to deliver to this body available information and documents pertaining to a specific taxpayer. (3) Provision of international legal assistance shall be based on international agreements. (4) If an international agreement is not signed, legal assistance shall be given under the following conditions: a) if there is reciprocity, or b) if the provision of information does not endanger public order and other vital interests of the Republic of Srpska, and if there is no danger of disclosing official, commercial, industrial, technological or professional secrets, as well as if the provision of information will not cause damage to taxpayer to the extent inconsistent with the purpose of the legal assistance. (5) Before submitting the information and documentation to a foreign country, the person to whom the information and documents relate shall be informed respectively.
6 Unified System of Registration, Control, and Collection of Contributions Article 10 (1) Tax Administration manages the Unified System of Registration, Control, and Collection of Contributions, which constitutes an administrative-technical system enabling the Tax Administration to perform registration, control, and collection of contributions and generation of data from contribution payers and beneficiaries. (2) The Unified System users are Health Insurance Fund of Republic of Srpska, Pension and Disability Insurance Fund of Republic of Srpska, Public Fund for Child Care of Republic of Srpska, and Employment Bureau of Republic of Srpska (hereinafter: the System users). (3) Contribution payers and beneficiaries shall be subject to registration with the Unified System. (4) The Unified System database is the unique register of all contribution payers and beneficiaries, of data necessary to enable control of payment of contributions, and data pertaining to implementation of rights ensuing from compulsory and voluntary insurance. (5) The Unified System produces reports on risky payers and identifies payers avoiding payment, payers who are paying or reporting lower amounts of contributions, i.e. those who fail to file the registration form to the Unified System. (6) Tax Administration shall provide to System users unrestricted access to System database, and transfer and use of data from their respective scope of competences. (7) Tax Administration shall issue to contribution beneficiaries a certificate, from the Unified System, containing data on period of insurance, amount of paid, i.e. unpaid contributions and salaries, no later than by 30 June of the current year for the previous year, or as per request of the contribution beneficiary. (8) Tax Administration shall maintain the information system enabling storage, use, and reconstruction of data from the Unified System database even in case of consequences of a Force Major, and shall maintain an information system meeting the minimum requirements for the functioning of the Unified System at a different location, which is at least 50 kilometers air distance away from the primary database location at the territory of the Republic. (9) The method of establishment of database and that of risk categorization of contribution payers, as well as methods, requirements, and procedure of registration with the Unified System shall be prescribed under a Rulebook issued by the Minister of Finance (hereinafter: the Minister), upon proposal of the Tax Administration Director. Unified register on reported and paid taxes Article 11 (1) Tax Administration shall manage the Unified register of reported and paid taxes. (2) Unified register of reported and paid taxes constitutes a supporting record providing for establishment and maintenance of analytical data on taxpayer liabilities. (3) Individual records on taxpayer s total liabilities and payments shall be provided by means of a taxpayer card. (4) Document issued by means of data from the Unified register of reported and paid taxes constitutes a public document. (5) Tax Administration records are managed by means of an integrated information
7 system. (6) Tax Administration shall, by means of its information system, regulate and provide for processing, coding, transfer, and rendering of data. (7) Accounting entries of taxpayer liabilities, in the General Ledger of the Treasury of Republic of Srpska, shall be made on the day of balance of accounts performed by means of the Unified register reports pertaining to reported and paid taxes. Tax certificate Article 12 (1) Tax Administration shall issue a written or electronic certificate on facts kept in its official records using the data contained in the taxpayer s card. (2) Tax certificate shall be issued upon verbal or written request of the taxpayer, his/her legal representative or proxy, immediately, and no later than within five days from the day of request. (3) In case the Tax Administration denies the request for tax certificate, it shall issue a special decision document thereabout, which is subject to an appeal to be stated before the Ministry, within 15 days from the day of delivery of the decision document. (4) In case the Tax Administration fails to issue the certificate within deadline referred to in Paragraph 2 of this Article, and fails to issue a decision document pertaining to denial of the request, taxpayer shall be entitled to an appeal to be stated before the Ministry within 15 days, as if the request had been denied. Tax Board Article 13 (1) Tax Board shall be in charge of coordination of activities and processes between the competent representatives of business community (representatives of Chamber of Commerce, Employers Union) in the Republic, the representative trade union, representatives of pensioners, and representatives of the Government, in regards to all significant issues pertaining to application of tax legislation and improvement of economic environment in the Republic. (2) Tax Board, as an advisory body, shall be appointed by the Government and shall include one representative of the business community, one representative of a representative trade union in the Republic, one representative of pensioners in the Republic, and two representatives of the Government, namely professionals from the field of taxes and tax system. (3) Tax Board shall examine significant issues in regards to tax treatment and taxation of businesses and other taxpayers in the Republic, and provide expert opinions and proposals for resolution of issues referred to in Paragraph 1 of this Article. (4) Tax Board members shall be appointed for a two-year term, whereas requirements, method, and procedure of the work thereof shall be prescribed under Rules of Procedures issued by the Tax Board and published in the Official Gazette of Republic of Srpska. Rights and obligations of taxpayers Article 14 Taxpayer shall have the right and the obligation to: а) register with the Tax Administration and report to the respective office of registration any changes of address, ownership, or company organisation as well as any changes to other data subject to registration with the Tax Administration,
8 b) obtain free copies of tax forms, c) file tax declarations in the format, in the place and at the time prescribed by tax legislation, d) settle tax obligations in the manner and under the terms laid down by tax legislation, e) obtain from Tax Administration free information pertaining to taxes, as well as to tax legislation and related regulatory acts governing the procedures for payment and the terms of payment of tax liabilities, f) elect the bookkeeping method in line with tax legislation for the purpose of calculation and payment of taxes, keep books and records as prescribed by tax legislation, and ensure the maintenance of such books and records, including associated computerized records and files, for five years from the due date of the tax declaration for the tax to which the books and records relate, g) as a legal entity or organization seated in the Republic, i.e. as foreign legal entity or organization producing income in the Republic to inform the Tax Administration, within five days from the day of registration, about opening or closing any bank account in the country or abroad, h) represent own interests in a tax procedure, personally or through a representative, i) provide explanation to Tax Administration with regards to calculation and payment of taxes, j) conduct properly during audits, in line with the law, k) make available or submit to Tax Administration all documents required for audit procedure, l) not hinder any officials of the Tax Administration in the legal conduct of their duties, and m) other rights and obligations established by law. III TAX PROCEDURE Tax procedure concept Article 15 (1) Tax Procedure constitutes an administrative procedure managed by the Tax Administration in the first instance, and by the Ministry in the second instance. (2) Tax Procedure shall include: (a) registration, (b) filing and assessment of tax liabilities, (c) issuing of tax certificate, (d) regular collection of tax liabilities, (e) enforced collection of tax liabilities, (f) tax audit, and (g) second-instance tax procedure. (3) In addition to tax procedure refereed to in Paragraphs 1 and 2 of this article Tax Administration shall manage the tax related minor offense procedure. Initiation of tax procedure and documents Article 16 (1) Tax Procedure shall be initiated ex officio, i.e. as per request of a client. (2) Tax document shall be the tax decision document, conclusion, tax declaration, tax bill, tax audit order, tax audit minutes, and other documents used to initiate, amend, change, or complete an action in tax procedure. (3) First-instance decision document and conclusion shall be subject to an appeal
9 before the Ministry, to be filed within 15 days from the day of delivery of the decision document, i.e. conclusion, to the taxpayer. Summons Article 17 (1) In conduct of tax procedure the Tax Administration shall have the right to issue summons to any person for the purpose of making a statement or producing documents or other books and records necessary for the implementation and execution of tax legislation, respectively so in the capacity of a client in a procedure, of an interested party or any other party for whom the Tax Administration believes to possess information or documentation relevant to the respective tax procedure. (2) The summons shall contain the mark of tax case, the mark of procedure in process, the time and place of the testimony or production of documents, as well as rights and obligations of the summoned party, indication of capacity of the person summoned, consequences of contempt to summons, and accurate list of documentation in case a person is summoned for the purpose of producing documentation. (3) The summons shall be served on the person at least five days before the date pertaining to taking of action in reference to procedure that is the subject of the summons. (4) Under-aged persons or commercially incapacitated persons shall be summoned via legal proxies. (5) A summoned person is entitled to the participation of his/her representative during the procedure of giving statement and to tape record the whole course of giving the statement using the adequate media. (6) A written report of the statement shall be drawn up and signed and dated by the person conducting the procedure. A video or audio tape recorded during the procedure shall be attached to the report. (7) If a duly summoned person does not follow the summons, and does not justify his/her absence, or if the summons cannot be duly served for the reason that the taxpayer is avoiding to receive the summons, the person shall be detained with the assistance of the Ministry of Interior. Service of documents Article 18 (1) Tax documents shall be considered served when handed over to the taxpayer, his/her legal representative, his/her proxy for tax affairs or his/her ex officio representative, and in the case of state bodies, enterprises, and other legal persons even when handed over to a person in charge of admission of documents, or in his/her absence, to another person who is in any way whatsoever authorized for receiving documents. (2) In case a taxpayer is a physical person, i.e. an entrepreneur, tax documents shall be considered served even if handed over to a member of the household who is of age, or to a person employed with the respective entrepreneur. (3) Persons referred to in Paragraph 1 of this Article shall be served, in person, via postal services or a courier service using a delivery note. (4) Service of documents shall also be deemed regular, for the purpose of this Law, in case the persons referred to in Paragraph 1 of this Article refuse to receive or sign tax documents, if the person serving the documents prepares and official note thereabout. (5) Notwithstanding Paragraph 3 of this Article, tax documents can be served to the taxpayer electronically, accordingly to regulations governing e-business.
10 Evidence Article 19 (1) Facts pertaining to tax procedure shall be established by the means of evidence. (2) Evidence shall include tax declaration, business books and records, accounting statements, business documentation and other documents and information the Tax Administration disposes with and which are collected from the taxpayer or from third parties, testimonies, findings and opinions of court experts, inspections, and any other means of evidence, which can serve to establish facts. (3) An official in charge of tax procedure shall independently decide which facts in the procedure shall be established and by which means of evidence, taking into account the cost-effectiveness and efficiency of the procedure. (4) Minutes shall be produced pertaining to presentation of evidence and shall make an integral part of the tax audit report. Tax Base Estimation Article 19a (1) In case the facts used as basis to determine tax base cannot be ascertained through evidence referred to in Article 19 of this Law, Tax Administration can use estimation to determine the tax base. (2) At own discretion and keeping in mind efficiency and effectiveness of the procedure, Tax Administration shall decide which method or methods would be used to estimate the tax base. (3) Upon Tax Administration s proposal, the Minister shall issue a book of rules to establish the terms, the methods, and the procedure for estimation of tax base. Tax Base Estimation Method Article 19b (1) Tax base estimation shall be made through: (a) estimation based on available and proper business documentation pertaining to a specific period of time shorter than the taxation period (daily, weekly, or monthly), by way of using the data on the particular portion of business operations as basis for tax base estimation for the period subject to tax assessment, (b) estimation based on data and facts on turnover (daily, weekly, or monthly), established through inspection or audit, by way of using such data and facts as basis for tax base estimation for the period subject to tax assessment, (c) comparison against data of other taxpayers engaged in the same or similar line of business, at the same or similar location, under relatively equal conditions, and (d) based on available and proper business documentation, if it is in place, and is not entered into accounting records. Estimation of Personal Income Tax Base Article 19c (1) Notwithstanding Article 19b of this Law, tax base estimation shall be used to determine the personal income tax base, as the difference between the value of taxpayer s property at the end and at the beginning of a calendar year, minus the amount of declared
11 income, and/or the value of property obtained as inheritance, gift, or in another legal and free-of-charge manner, and/or the amount of income subject to annual personal income taxation, for which the taxpayer, i.e., another person declares and provides adequate material evidence. (2) Property referred to in Paragraph 1 of this Article shall include: (a) real estate (house, apartment, commercial building and premises, garage, land, and such like), (b) stocks and shares in a legal person, (c) equipment used for business, (d) motor vehicles, vessels, and aircrafts, (e) savings deposits and cash, and (f) other property rights. (3) Value of property at the beginning of a calendar year shall be the sum of total value of property as of 01 January of the calendar year. (4) Value of property at the end of calendar year shall be the sum of total value of property as of 31 December of the calendar year, plus the value of property assessed by Tax Administration, which has been obtained or abominated throughout the calendar year, subject to charges or free-of-charge, and plus the funds the taxpayer used to purchase the property on behalf of third parties throughout the calendar year. (5) If the taxpayer, i.e. another person points out that certain property, i.e., assets have been obtained by way of inheritance, gift, or in another legal and free-of-charge manner, they shall provide adequate material evidence thereof. (6) Tax base assessed in line with this Article shall constitute undeclared income. (7) Undeclared income shall be taxed as other income, accordingly to the law governing personal income tax, not admitting the standard expenses. IV REGISTRATION OF TAXPAYERS Place and manner of registration Article 20 (1) Tax Administration shall register taxpayers. (2) Taxpayers are required to register with the Tax Administration in the place, at the time, and in the manner laid down in this Law, and other regulations governing the procedure of registration of businesses in Republic of Srpska. (3) Registration with the Tax Administration shall, at the same time, constitute registration with the Unified system for contribution payers. (4) The registration application shall include the Taxpayer s Identification Number, the taxpayer s principal place of business, the location of the taxpayer s books and records, as well as other relevant information supplied in the registration form, unless stipulated otherwise under specific regulations. (5) Taxpayer legal person and organization shall, in the attachment to the application for registration, submit to the tax authority a decision on court registration with attachments, and the taxpayer entrepreneur shall submit a decision on registration issued by an authorized body, as well as other documents prescribed under the law and bylaw, unless stipulated otherwise under specific regulations. (6) The contribution payers shall during registration submit along with the registration form the evidence pertaining to the origin of obligation for payment of contributions. (7) Deregistration of the Taxpayer Identification Number (TIN) shall be performed up-
12 on taxpayer s request, following the payment of all tax liabilities. Taxpayer Identification Number Article 21 For the purpose of identification of taxpayers, the Tax Administration shall, in registration procedure, issue to taxpayers the Taxpayer Identification Number (TIN). Persons obliged to hold the TIN Article 22 (1) The following persons shall be required to have the Taxpayer s Identification Number: а) legal person or another entity seated in the Republic, b) foreign legal person or organization producing income in Republic of Srpska, c) natural person who does not have permanent or temporary place of residence in Bosnia and Herzegovina, but produces income in the Republic, d) natural person entrepreneur, e) branch office of a foreign legal person in the Republic, and f) branch offices of legal persons seated in the Federation of Bosnia and Herzegovina and Brcko District. (2) Business unit of a foreign legal person shall mean a business unit as defined under provisions of regulations governing corporate income tax. (3) Business unit referred to in Paragraph 2 of this Article shall be subject to the provisions of this law pertaining to legal persons, unless prescribed otherwise by this law. (4) Natural person, i.e. taxpayer with permanent place of residence in the Republic shall register with the Tax Administration using the citizen s personal identification number, or the Tax Administration shall assign to him/her the Personal Identification Number (hereinafter: the PIN). Obligation to enter TIN Article 23 (1) The person required under tax legislation to submit a declaration, statement or other document to tax bodies shall include in the declaration, statement or other documents the Taxpayer Identification Number. (2) Unless otherwise provided in tax legislation, a Taxpayer Identification Number shall be the unique and sole number of the respective taxpayer for all taxes and all tax surcharges. Business units, representation offices, principal places of business Article 24 (1) A Republic of Srpska legal person, an organization or an entrepreneur whose principal place of business is in the Republic shall register with the Tax Administration organizational unit within whose jurisdiction such principal place of business is located. (2) Principal place of business, within the meaning of Paragraph 1 of this Article, shall be the place of business designated by the respective taxpayer as the principal place of business. (3) A Republic of Srpska legal person or an organization whose principal place of business is outside the Republic of Srpska shall register with the Head Office of the Tax
13 Administration. (4) A separate organizational unit of a Republic of Srpska legal person or an organization shall register with the organizational unit of the Tax Administration within whose jurisdiction the principal place of business and the separate organizational unit is located. (5) A representation office of a foreign legal person or an organization in the Republic shall register with the organizational unit of the Tax Administration within whose jurisdiction the principal place of business of the representation office is located. (6) Provisions of Paragraphs 1, 2, 3, 4, and 5 of this article shall apply unless stipulated otherwise under specific regulations The registration application Article 25 (1) The application for taxpayer s registration referred to in Article 20 of this Law shall be submitted to the Tax Administration within eight days from the date of registration with appropriate bodies in charge of registration of legal persons and other entities, i.e. entrepreneurs. (2) If the taxpayer fails to file the registration application within the period stipulated under Paragraph 1, the Tax Administration will conduct an ex officio registration, if it possesses information pertaining to effective obligation to register. (3) If the taxpayer referred to in Article 24 of this Law changes its principal place of business, ownership structure, or company organisational or legal form, that taxpayer shall be obliged to notify the Tax Administration respectively, in writing, within eight days. (4) If a taxpayer referred to in Article 24 of this Law changes its principal place of business and the new principal place of business is within the jurisdiction of a different organizational unit of Tax Administration, then the taxpayer shall notify the Tax Administration respectively within eight days, and the tax Administration s organisational unit shall, ex officio, conduct the registration with the organisational unit located at the territory of the new principal place of business of the taxpayer. Registration of Real Estate with the Fiscal Register Article 25a (1) Tax Administration organizes and manages the fiscal register of real estate in line with this Law and regulations governing the taxation of real estate. (2) Taxpayers shall register their real estate with the fiscal register based on real estate registration forms. (3) In case a taxpayer fails to register his/her real estate, Tax Administration shall register it ex officio. The Unified System registration application Article 26 (1) Application for registration with the Unified System shall be filed by the employer, within eight days from the date of start of employment. (2) Voluntary payer of contributions shall register with the Tax Administration in line with the place of residence, within eight days from the date of start of insurance. (3) Contribution payers not listed under Paragraphs 1 and 2 of this Article shall register with the Unified System within eight days following the day of accrual of obligation to pay
14 contributions. (4) Notwithstanding Paragraph 1 of this Article, the application for registration with the Unified System may be filed by the contributor if the payer of contributions fails to do so upon expiry of deadline referred to in Paragraph 1 of this Article, in manner and under conditions set under this Law. Deregistration of taxpayer Article 27 (1) Tax Administration shall deregister the taxpayer, upon the taxpayer s request, following a tax audit and after establishing the fact that the respective taxpayer has paid all his/her tax liabilities. (2) The tax audit procedure referred to in Paragraph 1 of this Article shall commence no later than ten days from the day of receipt of taxpayer s deregistration request. (3) The Tax Administration shall deregister a contributor in line with the declaration of the contribution payer, after it establishes that all liabilities in reference to contributions have been paid for the respective contributor. (4) Notwithstanding Paragraph 3 of this Article, the Tax Administration shall conduct an ex officio deregistration of a contributor from the Unified System, or upon the contributor s request in the following cases: a) when the contribution payer has ceased its business operations based on a decision document issued by the competent body, and has failed to submit the deregistration declaration, and b) upon the contributor s personal request if he/she holds a legally justified interest in doing so in line with the law, regardless of the fact whether the contribution payer has paid all the liabilities pertaining to contribution for the respective contributor. Obligation to provide data Article 28 (1) Agency competent for registration of businesses, local self-governance body, or another body performing registration of entities engaged in business activities shall provide to the Tax Administration, within five days following the date of registration, entry of change, or re-registration, an information pertaining to registration, deletion, i.e. entry of any change into respective register. (2) An administrative body keeping the data on permanent or temporary place of residence, or birth or death of natural person shall inform the Tax Administration respectively within five days from the date of registration of permanent or temporary residence, or birth or death of a natural person. (3) Conditions and manner used in the procedure of identification and registration of taxpayers, as well as forms used for registration, shall be prescribed by the Minister by means of a rulebook, upon the proposal of the Tax Administration Director. Opening of an account for the taxpayer Article 29 Bank or another organization performing payment transactions (hereinafter: the bank) may open an account for the taxpayer, i.e. legal person, part of a legal person, or an entrepreneur, only if the taxpayer provides the proof of registration of the taxpayer.
15 V PROCEDURE FOR FILING AND ASSESSMENT OF TAX LIABILITIES Tax Declaration definition and filing Article 30 (1) Tax declaration constitutes the taxpayer s report to the Tax Administration pertaining to income produced, expenditures incurred, profit, property, and other facts and documents relevant to establish the tax liability. (2) A taxpayer shall file a tax declaration, on a prescribed form within legally established deadline in line with regulations prescribing the obligation to pay a specific type of tax, to the organizational unit of the Tax Administration with which the taxpayer is registered. (3) A taxpayer, or the taxpayer's legal representative or proxy, shall sign the tax declaration. If the declaration or a part of it was prepared by some other qualified person, then the qualified person shall also sign and enter his/her Identification Number. (4) Tax declaration shall be filed within a prescribed deadline, directly, by mail or in an electronic format, in manner prescribed under a rulebook issued by the Tax Administration Director, with the consent of the Minister. (5) The tax declaration shall be deemed received by the Tax Administration on the date the declaration was sent by registered mail. Extension of deadline for filing of tax declaration Article 31 (1) At a taxpayer s request filed before expiration of filing deadline, the Tax Administration may extend the period for the submission of a tax declaration for justifiable reasons (sickness, absence abroad, an accident, Force Major, and such like), until such reasons stay in effect, and no longer than up to three months from the day of expiry of legal deadline for filing. (2) The Tax Administration shall decide on the request for extension of filing period within five days from the day of filing of the request. (3) The extension of filing period shall not affect the due date for payment of the tax liability. Amended tax declaration Article 32 (1) A taxpayer may amend a previously filed tax declaration in order to correct an error or omission made in the original tax declaration, no later than three months following the expiration of the year in which the declaration is filed. (2) Filed tax declaration cannot be amended once the tax audit procedure has been completed for the period to which the tax declaration pertains. Specific declarations Article 33 (1) An information declaration is a report that a taxpayer is required to file with the Tax Administration in which he/she provides information related to the payment of tax or other information necessary for the execution of tax legislation, and conditions and manner of
16 filing shall be prescribed under tax legislation. (2) Withholding tax declaration is a report that a tax agent is required to file with the Tax Administration providing information related to liabilities withheld and paid. (3) Tax agent shall deliver a copy of the declaration referred to in Paragraph 2 of this Article to the person for whom the taxes have been withheld and paid. (4) A taxpayer may also amend the declarations referred to in Paragraphs 1 upon expiry of the respective filing deadline in order to correct errors or omissions in the originally filed declaration. Due date and payment of tax liability Article 34 (1) The liability shall be considered due on the date determined by tax legislation. (2) Tax liability shall be paid directly by the taxpayer, except in cases where this law or another piece of tax legislation prescribes that another person shall be responsible for payment of tax liability of the respective taxpayer. (3) Tax liability shall be paid in line with manner and procedure prescribed under this law, and with the payment of tax liability a person shall be relieved of the responsibility for that liability. (4) Provisions pertaining to tax liability shall apply to other surcharges as well, except if provided otherwise under his law. (5) A third party may also pay the tax liability on behalf of the taxpayer. Payment of liability by tax agent Article 35 The liability, which, in accordance with tax legislation, the tax agent is obliged to pay, shall be the tax agent s liability from the moment he/she collects it from the taxpayer Responsibility of a legal successor Article 36 (1) Tax liability of a legal person or another entity liquidated due to status changes shall be settled by its legal successor in line with regulations governing the operations of enterprises. (2) Deadline for payment of tax liability of a legal person liquidated due to status changes shall not change once the settlement of the liability has been transferred to its legal successor. (3) Changes to legal form of a legal person shall not affect the payment of tax liability. Responsibility of an heir Article 37 (1) The liability of a deceased individual (testator) shall be paid by each of his/her heirs proportionally to the amount of his/her share in inherited property. (2) In case there are several heirs, they shall be jointly liable for the debts of the testator, namely each proportionally to the amount of his/her share in inherited property. (3) If the inherited property is insufficient for payment of the total amount of tax liability of the testator, the unpaid amount of the tax liability shall be written off.
17 Related persons Article 38 (1)The following persons shall be considered as related persons: (a) members of the taxpayer s family; and (b) the person that controls, is controlled by, or is under common control with the taxpayer. (2) A taxpayer s family referred to in Paragraph 1, Item (a) of this Article includes the taxpayer s spouse, relatives in direct ascending and descending family line, brothers and sisters, adopted persons and their descendants that live in a common household with the taxpayer. (3) Control referred to in Paragraph 1, Item (b) of this Article means the ownership, either directly or through one or more legal persons of at least 50% in value of property or at least 50% voting power of shareholders in the legal person concerned. During the control, the person shall be considered as owning all shares owned directly or indirectly by members of his/her family. (4) Related person shall be liable for the obligations of the respective taxpayer in cases where it is established that tax liability cannot be collected from the taxpayer in any of the legally prescribed methods. Assessment of tax liability Article 39 (1) An assessment of liability constitutes the entering, into the Tax Administration records, of the amount of tax obligation of a taxpayer stated in his/her tax declaration. (2) The tax declaration referred to in Paragraph 1 above shall become an enforceable document upon expiration of a legal deadline for payment of tax liability reported herein. (3) Assessment of tax liability shall constitute an operation referring to establishment of an individual tax liability, of a taxpayer, a tax base, and the amount of tax liability. (4) Notwithstanding the provisions of Paragraph 1 of this Article the Tax Administration shall record the tax liability following the issuance of a decision document pertaining to payment of tax liability. (5) In pursuance of the enforceable document referred to in Paragraph 2 of this Article the Tax Administration shall initiate and conduct an ex officio enforced collection procedure in line with the provisions of this law. Decision document for payment of tax obligation Article 40 (1) By means of a decision document for payment of tax obligation, the Tax Administration shall order the taxpayer to pay the assessed tax liability, within 30 days following the enforceability of the decision document. (2) The decision document referred to in Paragraph 1 of this Article shall not be issued for liabilities reported in pursuance of Article 39, Paragraphs 1 and 2 of this law. (3) If two or more taxpayers are jointly and severally liable for the payment of the liability, then a decision document for payment of the tax obligation shall be issued to each of these taxpayers, whereas the payment of the entire obligation may be executed by either of them.
18 Suspension of tax obligation Article 41 (1) Suspension of tax obligation shall be subject to: а) payment or substitute for payment in line with the law, b) collection of tax, c) statute of limitation on assessment and collection of tax liability, d) tax write-off, and e) in other manner prescribed under law. (2) Payment of taxes and surtaxes shall be made to prescribed accounts in line with the Minister s regulations. VI PAYMENT OF TAX OBLIGATION 1. Regular Collection of Taxes Article 42 (1) Tax collection, for the purpose of this law, shall be the regular and the enforced collection. (2) Regular tax collection implies payment of tax liability in the prescribed deadline or deadline established under the decision document for payment. (3) Enforced collection shall be undertaken upon expiration of the legal deadline for payment of reported tax liabilities or upon expiration of the payment deadline established under an enforceable decision document referred to in Article 40 of this law. (4) Provisions pertaining to tax collection shall also apply to collection of tax surcharges. Payment modalities Article 43 (1) Payment of tax obligation shall be made via bank through transfer of funds to the prescribed public revenue accounts in line with deadlines established under tax legislation. (2) Notwithstanding the provisions of Paragraph 1 of this Article, tax obligation can be paid for the purpose of reconciliation by means of the following: а) purchase of fee stamps or other securities containing the tax obligation, b) barter, in line with tax legislation, c) conversion of tax debt into share in ownership, in line with special law, d) transfer of seized property to the Republic following enforced collection, and e) other prescribed modalities. Day of payment of tax obligations Article 44 (1) Day of payment of a tax obligation shall be the day on which a payment of the tax obligation was received in the appropriate account. (2) A day is considered to be a day of payment if on that day a bank received a transfer order from the taxpayer to transfer funds from the taxpayer s account to the
19 appropriate account, provided there are sufficient funds in the taxpayer s account and the bank shall be authorized to transfer the funds to the appropriate accounts. (3) In line with its legal authority a bank shall execute the funds transfer order for the purpose of payment of tax obligation for as long as there are sufficient funds in the account of the respective person. (4) Transfer order for payment of obligation shall be executed by the bank within one business day from the day of receipt of the transfer order. Order of payment of tax obligations Article 45 (1) A taxpayer shall designate, for the purpose of payment, the type of tax obligation or surcharge to be paid, without making a notation as to which period the payment refers. (2) Designated payments shall be applied in the following order: firstly, amount of tax as per due date starting from the earliest obligation due, followed by amount of interest to the liability. (3) For enforced collection procedure, the order of allocation of collected amount shall be the following: costs of procedure, contributions, principal debt, and amount of interest. Temporary assurance for collection of tax obligations Article 46 (1) For the purpose of assurance of collection of tax obligation, the existence of which is belike, and where danger exists that the taxpayer will elude, i.e. procrastinate the collection, the Tax Administration may establish temporary measures to secure the collection by means of a Conclusion. (2) The Conclusion referred to in Paragraph 1 of this Article becomes enforceable upon delivery to the taxpayer and shall also include a rationale as to the Tax Administration s reasons for believing that a danger exists that the taxpayer might elude the collection of due tax obligation. (3) The measures of assurance for the purpose of this law shall include: а) injunction of disposal over movable property, effectuated by means of delivery of the Conclusion on measure of assurance to a body in charge of register of movable property, for the purpose of registration of the injunction with the adequate register of movable property, b) injunction of disposal over immovable property, effectuated by means of delivery of the Conclusion on measure of assurance to a body in charge of register of immovable property, for the purpose of registration of the record with the adequate register of immovable property, and c) blocking the taxpayer s account by means of delivery of the Conclusion on measure of assurance to a bank, which is enforced as prescribed under the Conclusion. VII REGULAR COLLECTION OF TAX OBLIGATION deleted as per Changes and Amendments published in the Official Gazette of Republic of Srpska, no. 67/13 of 8 August Payment notice Article 47
20 (1) Taxpayer failing to fully or partly file or pay the tax obligation following the due date shall receive from the Tax Administration a notice pertaining to type and amount of due tax liability or surcharge, serving as caution to file or settle due tax obligation. (2) Notice referred to in Paragraph 1 of this Article shall be sent via regular mail, or telephone, and if sent via telephone, the official of the Tax Administration shall make an ex officio note thereabout and enclose in the case file. Deferred payment of due taxes Article 48 deleted as per Changes and Amendments published in the Official Gazette of Republic of Srpska, no. 67/13 of 8 August Guarantee for deferred payment of due taxes Article 49 deleted as per Changes and Amendments published in the Official Gazette of Republic of Srpska, no. 67/13 of 8 August Repeal of deferral of payment of due taxes Article 50 deleted as per Changes and Amendments published in the Official Gazette of Republic of Srpska, no. 67/13 of 8 August Tax interest Article 51 (1) For the amount of tax obligation, which has not been paid by due date, the taxpayer shall pay an interest calculated at the daily rate of 0,03%, including other obligations subject to deferral in line with the provision of a special Law. (2) The interest is charged starting with the next day, as of the due date, until the day of payment of tax obligation, and for the overpayment, as of the day of expiration of refund deadline. (3) Tax Administration shall calculate interest in all documents ordering payment of tax obligations, including the interest calculated until the final due date for payment subject to decision document on deferral. Positive interest Article 52 (1) In case the Tax Administration has to refund the overpaid obligation, it shall calculate and pay an interest to the taxpayer in line with Article 51, Paragraph 1 of this Law, for the period starting from expiry of 30 days as of the date of refund claim until the day of payment of refund. (2) Advance tax payments, as well as obligations withheld by tax agents, shall not be considered paid before the due date of the obligation subject to payment. (3) Overpayment of an obligation used to offset another obligation shall be considered refunded on due date of the obligation subject to offset. Guarantee for receivables legal mortgage Article 53 (1) In case a taxpayer fails to pay the tax obligation by the legally due date or the due date established under enforceable decision document on assessment, the Tax Administration shall initiate the procedure for imposing legal mortgage over taxpayer s real-estate in favor of