The Federal Government has adopted and sent to the FBiH Parliament by urgent procedure the Proposal of the Law on Amendments to the Law on Profit Tax.
One of the novelties is the abolition of a provision in the current Law that required legal entities to submit a hard copy financial statement, which they submitted to the FBiH Tax Administration and the Financial Information Agency, with the aim of reducing the administration for taxpayers. Namely, the FBiH Tax Administration has access to the FIA database, so no additional documentation is required.
It is also proposed to amend Article 19 of the current Law, which regulates depreciation costs in order to prevent higher costs for legal entities and that the costs of renting or depreciating assets with the right to use would still be tax deductible expenses.
The current Law on Profit Tax regulates the tax recognition of interest expenses through the “thin-capitalization” rule, which excludes financial institutions that at the time of proposing the current Law were under the supervision of the FBiH Banking Agency and the FBiH Insurance Supervision Agency, therefore leasing companies were not included in the text of the law at the time. Since these companies are now under the supervision of the FBIH Banking Agency, an exemption from this tax rule has been proposed, as the agencies control capital adequacy.