In order to mitigate the negative economic consequences caused by the COVID-19 pandemic, Speaker of the House of Representatives of the Parliamentary Assembly of Bosnia and Herzegovina, Mr. Denis Zvizdić, submitted to the urgent parliamentary procedure the Amendments to the VAT Law, by which the deadline for filing applications and paying VAT would be shifted from the 10th to the last working day of the month.
In this regard, the FIC members submitted their comments to the competent institutions on the proposed amendments to the Law on VAT and proposed measures that would have a significant, positive impact on maintaining the financial stability of companies during theCOVID-19 pandemic.
The joint estimation of the FIC members is that, despite the undoubtedly good intention of the proponent, to shift the deadline for submitting VAT returns and paying VAT, in the current circumstances it would not have a positive effect on the economy and would not facilitate business or provide the necessary cash flow for companies.
As an example of its claims, FIC mentioned exporting companies – if the tax filing deadline shifts, it would mean that many exporters will have high VAT deductions on imports, which have not been paid back within the currently applicable deadlines. All of the above could have a negative effect on the current liquidity and performance of companies.
For this reason, investors believe that the reimbursement process must be accelerated and that the ITA must discontinue the practice of making tax returns itself conditional and delayed by initiating ITA controls. Alternatively, FIC proposed that, until the pandemic is terminated, a deadline for payment of import duties of 60 days should be prescribed.
Considering all of the above, FIC proposes that the Interim Decision, which validity is limited until the end of pandemic, prescribe the following:
1. VAT returns shall be submitted by the 15th day of the current month, for the previous month;
2. The deadline for payment of VAT due on the filed application is by the 30th day of the current month for the previous month;
3. VAT refunds are accelerating – Exporters who have made a valid VAT refund claim in the VAT return, must be paid by the 20th day in the month for the previous month.
4. VAT refunds should not be conditioned or delayed by a control process that takes an unreasonably long time;
5. Exempt from VAT the turnover of goods and services performed free of charge for the purpose of combating the COVID-19;
6. The excise duty on alcohol for the production of disinfectants and hygiene products shall be abolished.