Law on Value Added Tax applies in Bosnia and Herzegovina since 1st January 2006.
In the very short term ITA conducted a very successful introduction of the new tax system, which replaced the then valid sales tax, which was rated by the relevant international organizations as one of the key steps for the establishment of a uniform economic space, reducing the gray economy, encouraging foreign investment and reducing the trade deficit.
Local experts and officials of CAFAO (Customs and Fiscal Assistance Office), who came from the tax and customs administrations of the EU countries have been working on the Law on Value Added Tax of Bosnia and Herzegovina.
Law on Value Added Tax in Bosnia and Herzegovina has a unique tax rate in the amount of 17%, while the 0% VAT provided only for exports, by which country stimulates export oriented enterprises.
The introduction of Value Added Tax in Bosnia and Herzegovina resulted in a significant increase in revenue collected on the basis of VAT.