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5.1. Tax Base for Resident Entities

Resident companies are subject to corporation tax on their worldwide income received from sources within and outside Bosnia and Herzegovina.

Dividends (including share in profits) received from resident companies and on participation in the capital of other taxable entities located in the same tax jurisdiction are exempt from tax. Dividends received from foreign sources are taxed at corporation tax rate and expenses related to such incomes may be set off against total tax liability in the country.

Capital gains are taxed as ordinary income.