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9.1. Unilateral and Treaty Based Methods Available for the Elimination or Mitigation of Double Taxation

Tax residents are allowed to credit foreign taxes paid on income received abroad against their tax liabilities in FBiH / RS. The amount of foreign tax credit is limited to the amount of corporate tax payable in FBiH / RS on such income.

The tax residents in BD are allowed to either credit the foreign taxes against the tax liability in BD or claim such foreign taxes as deductible expense while determining their CIT for the relevant tax year.

Below is a summary of the available methods for various income tax streams based on domestic law.

Royalty Copyright OC
Capital Gains OC
Dividends OC
Interest OC
Royalty Patent OC
Sales OC
Service Management OC
Service Technical OC
Royalty Trademark OC

The credit column shows the type of foreign tax credit granted when the receiving country receives a payment.  Four abbreviations are used for the type of foreign tax credit available:

  • NC means no credit but foreign withholding taxes can be deducted.
  • OC means ordinary credit, i.e., credit for foreign withholding taxes (e.g., withholding taxes).
  • IC means indirect credit, i.e., credit for underlying corporate taxes as well as foreign withholding taxes.
  • ND means no credit and no deduction for any foreign withholding taxes incurred.