Bosnia Rental Income Guide 2026

Overview — Rental Income Tax in Bosnia

Rental income from letting or leasing of immovable property is chargeable to income tax in both entities. The tax treatment is consistent: rental income is added to the landlord's other income and taxed at the flat personal income tax rate (10% FBiH, 8% RS). For individual landlords, rental income is reported in the annual personal income tax return, and tax is paid by 30 April of the following year. For corporate landlords, rental income is included in the company's profits and taxed at 10% CIT. Withholding tax on rent paid to non-residents may apply at 10% (reduced under DTTs).

Rental Income Taxation — Rate & Calculation

Net rental income (gross rent minus allowable deductions) is taxed at the applicable flat rate. Key features:

• FBiH — rental income taxed at 10% on net profit
• RS — rental income taxed at 8% on net profit
• Standard deduction — 20-30% of gross rent may be deducted as a standard allowance without needing receipts
• Itemised deductions — actual expenses may be deducted if properly documented

Landlords may choose between the standard deduction (simpler, no receipts needed) and itemised deductions (more beneficial if expenses exceed the standard percentage). The tax is calculated on an annual basis and declared in the annual tax return.

Deductible Expenses

Landlords who opt for itemised deductions may claim the following expenses against rental income:

• Repairs & maintenance — not capital improvements
• Property management fees — paid to licensed agents
• Insurance premiums — building and fire insurance
• Mortgage interest — interest on loans used to acquire or improve the property
• Property tax — annual municipal property tax
• Utilities — if paid by the landlord rather than the tenant
• Depreciation — capital cost allowance on the building (not land)

Capital improvements that add value or extend the life of the property are not immediately deductible but may be added to the cost base for CGT purposes or depreciated over time.

Short-Term & Holiday Rentals

Short-term rentals (Airbnb, Booking.com, holiday homes) are subject to the same tax rules as long-term residential rentals. The rental income must be declared, and the same deduction options apply. Short-term rental hosts may need to register as self-employed if the activity is regular and substantial. Tourist tax (boravisna taksa) may also apply at the municipal level, typically BAM 1-3 per person per night, collected by the host and remitted to the tourist board.

FAQs

Do I need to register as a landlord for tax purposes?

You do not need to register separately as a landlord. Rental income is declared in your annual personal income tax return. However, if you operate multiple rental properties as a business, you may need to register as self-employed.

Can I deduct mortgage interest on my rental property?

Yes, mortgage interest on loans used to acquire or improve the rental property is a deductible expense against rental income.

What if I rent my property to a company?

The company may be required to withhold 10% tax on the rent payment and remit it to the tax authority. You can credit this withholding against your final tax liability.

Disclaimer

This guide provides general information about Bosnian rental income tax 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.