Bosnia Investment Income Guide 2026

Overview — Investment Income Taxation

Bosnia taxes investment income through a combination of final withholding taxes and assessed income. The tax treatment depends on the type of investment and the investor's status (individual, corporate, resident, non-resident). For resident individuals, certain investment income is subject to final withholding tax, meaning no further tax reporting is required. For companies, investment income is included in taxable profits and taxed at 10% CIT. For non-residents, withholding tax rates may be reduced under applicable double tax treaties. Bosnia has a growing financial market with the Sarajevo Stock Exchange (SASE) and Banja Luka Stock Exchange (BLSE).

Dividends — 10% WHT

Dividends distributed by Bosnian-resident companies are subject to withholding tax at 10%. For resident individuals, this is generally a final tax, meaning the dividend income is not subject to further income tax. For resident corporate shareholders, the 10% WHT is a creditable advance payment against their CIT liability, and inter-company dividends may be exempt from CIT under the participation exemption. For non-residents, the dividend WHT is 10%, which may be reduced under applicable double tax treaties (typically to 5% for substantial shareholdings). Dividends from shares listed on Bosnian stock exchanges may qualify for certain exemptions.

Interest Income

Interest income in Bosnia is typically taxed as ordinary income at the individual's flat rate (10% FBiH, 8% RS). Key types of interest include:

• Bank deposit interest — taxed as ordinary income, subject to withholding at source at 10% (final for residents)
• Government bonds — interest taxed at standard rates, may be exempt for certain bonds
• Corporate bonds — interest taxed at standard rates, subject to 10% WHT to non-residents
• Interest on loans — subject to income tax at standard rates

Interest paid to non-residents is generally subject to 10% WHT, reduced under applicable DTTs. Certain government securities may offer tax-exempt interest to promote the domestic capital market.

Mutual Funds & Collective Investments

Mutual fund distributions in Bosnia are generally treated as capital gains or investment income for tax purposes. The fund itself is typically tax-transparent, meaning income is taxed at the investor level rather than at the fund level. Distributions from open-ended investment funds may be exempt from withholding tax if certain conditions are met. Capital gains from the sale of mutual fund units are taxed as ordinary income. The holding period exemption (2-3 years) may apply to gains on fund units held long-term.

FAQs

Do I need to report dividend income on my tax return?

For resident individuals, the 10% WHT on dividends is generally final, so no further reporting is needed. Non-residents and corporate shareholders should report and claim treaty relief where applicable.

Are foreign investment income and capital gains taxable in Bosnia?

Yes, tax residents are taxed on worldwide investment income. Foreign dividends, interest, and capital gains should be declared in the annual tax return. Foreign tax credits may be available under DTTs.

Is there a participation exemption for corporate dividends?

Yes, dividends received by a resident company from another resident company are generally exempt from CIT. Dividends from foreign companies may qualify for exemption if certain holding thresholds are met.

Disclaimer

This guide provides general information about Bosnian investment income taxation for the 2026 tax year. Tax laws and rates may change. Always consult with a qualified Bosnian tax advisor or the relevant tax authority for advice specific to your situation. InvestmentKit does not provide tax advice.