COVID-19 Bosnia and Herzegovina Update

Draft Law on Mitigating the Negative Economic Consequences presented in Bosnia and Herzegovina

Last Updated on 10 April 2020, 9:00 CET

Following the outbreak of COVID-19, authorities at all levels in the Federation of Bosnia and Herzegovina (“FBH”) and in the Republic of Srpska (“RS”) have imposed a broad spectrum of measures from quarantines to restricted travel and outdoor activities.

Both governments in FBH and RS are currently considering measures to mitigate economic consequences of COVID-19 outbreak and are already preparing a set of measures aimed at preserving jobs and liquidity, especially for companies with working capital.

On 6 April 2020, the Government of RS adopted a Decision determining that the payment of income tax and contributions for employees and income tax on self-employed earnings will be paid from the Solidarity Fund of RS.

The payment of income tax and contributions/income tax on self-employed earnings for the month of March will apply to those employers/self-employed whose business activities have ceased due to the state measures introduced in preventing further spread of coronavirus.

In order for the employers and self-employed to exercise the aforementioned right, following requirements will have to be met:

  • The employers have to pay the net amount of salaries to employees;
  • The registered business activities of employers will have to be on the list of “affected business activities”, to be drafted by the Ministry of Economy and Entrepreneurship together with the Ministry of Finance.

Also on 6 April 2020, the Government of the Federation of Bosnia and Herzegovina endorsed a Draft Law on Mitigating the Negative Economic Consequences (“Draft Law”), to be adopted in the FBH Parliament under the urgent procedure. If adopted it will provide the following measures:

  • contributions to minimum salary will be paid from the budget of FBH;
  • additional funding will be provided for cantons and municipalities;
  • businesses will be freed from the obligation to pay income tax advances;
  • default interest rates on public revenue and debts will be abolished;

The proposed Law, however, comes with uncertainty with regard to suspension of all administrative and judicial proceedings during the state of emergency. All administrative and judicial proceedings are to be suspended, but within the proposed scope, predominantly referring to the regulation of tax aspects during the state of natural disaster. It remains unclear for now if the suspension applies to all administrative and judicial proceedings or only those related to tax matters.



The information in this document does not constitute legal advice on any particular matter and is provided for general informational purposes only.