In the “Official Gazette of Bosnia and Herzegovina” No. 47/22 of 19.07.2022, a new Instruction on how to complete a VAT return was published. You can find out what each field should contain in the Instruction, which we are publishing in its entirety:
Instructions for completing a VAT return with an explanation of how to complete the final consumption field
In field 1, enter the twelve-digit identification number, i.e. the number stated on the certificate or decision for VAT registration.
In field 2, enter the tax period, in accordance with the VAT Law – this is one calendar month. The period is entered in this field as follows: example, March 2021: 01.03.2021-31.03.2021. or 2103, etc.
In field 3, enter the name of the taxpayer, i.e. the name stated on the certificate or decision for VAT registration. Example: “Čelik” d.o.o..
In field 4, the address of the taxpayer is entered, more specifically, the information stated on the certificate or the decision on the registration of the taxpayer for VAT. Example: Sarajevska 13.
In field 5, information on the postal code and the place where the taxpayer operates, as well as information from the certificate or decision on VAT registration, is entered. Example: 78000 Banja Luka.
In field 11, information is entered on the value of taxable supplies made in the given tax period, i.e. all supplies for which, according to Article 17 of the VAT Law, an obligation to calculate VAT has arisen. This field also includes the value of deliveries made for non-business purposes, as regulated by Article 5 of the VAT Law. This refers to goods that form part of the taxpayer’s business property, and he uses it for private purposes or for the private purposes of his employees, that is, when he disposes of the goods, free of charge or with a reduced fee, or uses the goods for purposes that are not related to the taxpayer’s business activity. In field 11, enter the value of deliveries made in accordance with Article 6 of the VAT Law. This article regulates the following types of goods traffic:
- putting into personal use goods that the taxpayer produces, builds, processes, buys or imports within the scope of his business activities;
- the use of goods for which the input tax is fully or partially deducted, and which the taxpayer uses fully or partially for the purposes of performing activities that are exempt from paying VAT;
- retention of goods after cessation of activities or after cessation of registration, for which input tax is fully or partially deducted.
In addition to the above, the value of turnover is also entered in accordance with Article 9 of the VAT Law, more precisely the value of the following types of turnover: - use of goods, which form part of business assets, for non-business use by the taxpayer, employees or other persons, when VAT on such goods is fully or partially deductible;
- provision of services that the taxpayer performs free of charge or with a reduced fee for non-business purposes of the founder, employees and other persons or for purposes that are not related to his business;
- provision of services that the taxpayer performs for the purposes of his business, when VAT on such a service, if provided by another taxpayer, would not be fully deductible;
In addition, field 11 is entered:
– value of deliveries made to EUFOR and NATO Headquarters;
– value of services during import;
– amount of the VAT calculation base contained in advance invoices;
– value of deliveries and services performed for which the place of turnover is outside BiH (re-export of goods and services for which, in accordance with Article 15 of the Law, the place of turnover is outside BiH) and
– turnover of goods and services regulated by Articles 7, 8, 28, 29 and 30 of the Law on VAT.
It is necessary to pay attention that the values in this field are expressed without VAT, and that the values from fields 12 and 13 are not entered in this field.
In field 12, the value of exports for a given tax period, which is taxed at a “zero rate” in accordance with Article 27 of the Law on VAT, except for services related to the import of goods into BiH, is entered.
More precisely, this field is entered as follows:
– the statistical value of exports from field 46 of the customs declaration for permanent export EXA
– the invoiced value from field 22 of the export customs declaration EXC, which discharges the customs procedure for inward processing on the basis of inward transactions, provided that this value consists only of the value of the service and domestically incorporated material, and which data must be visible from the invoice attached to this declaration. Proof that this is an inward processing approval on the basis of inward transactions is code 30.2 from point 10 of the Inward Processing Approval.
- the value of the service and domestic incorporated material from the invoice attached to the EXC customs declaration for other internal processing approvals, provided that the invoice (issued by a person who performed services on goods that were imported to BiH and exported by the same persons, to a person who does not have a seat in BiH) which is attached to the EXC customs declaration, specifically stated the value of imported goods for internal processing on the day of acceptance of the customs declaration for internal processing IMI, the value of the services, the value of the domestic incorporated material, and the value other costs incurred in the customs area of BiH.
In field 13, enter the value of deliveries on which the VAT payer is not obliged to calculate VAT in accordance with Articles 24 and 25 of the VAT Law.
Fields 11, 12 and 13 refer to all output values that the taxpayer had in the given tax period.
Below are explanations for fields 21, 22 and 23, which refer to the value of inputs that the taxpayer had in a given tax period.
In field 21, the value of all purchases in a given tax period is entered, from persons registered for VAT as well as from persons not registered for VAT.
In addition to the above, this field also includes the value of purchases without the right to deduct input tax, purchases for which the place of turnover is outside BiH (re-export), the value of purchases of capital goods and fixed assets, the value of services received from persons with headquarters abroad and the value of goods and services received with advance invoices.
The value in this field is entered excluding VAT. The values listed in fields 22 and 23 are not entered in this field.
In field 22, the value of imported goods imported by the taxpayer in a given tax period pursuant to Article 11, paragraph (1) of the VAT Law is entered. This value is entered in accordance with Article 21 of the VAT Law, according to which the basis for imported goods is the value of the goods in accordance with customs regulations (statistical value from the SAD), excise duty, customs and other import taxes, as well as other public revenues, all ancillary costs (commission, packaging, transport and insurance costs, etc.).
More precisely, this field is entered with the value of imports (determined in accordance with the provisions of Article 21 of the VAT Law) carried out under customs declarations IMH (procedure “02” – internal processing under the duty drawback system) and IMH (release for free circulation – procedure “40” and procedure “42”). The value in this field is entered without VAT.
Field 23 is entered with the value of purchases from farmers who have received a decision from the ITA that they are entitled to a flat-rate compensation. We note that only the net value paid to the farmer is entered in this field.
In field 51, enter the amount of VAT calculated on the supply of goods and services. In this field, enter the calculated VAT for the given tax period on the supply of goods and services in accordance with Articles 5, 6, 7, 8 and 9 of the VAT Act (VAT on goods and services used for non-business purposes and for personal use).
In the case where the VAT payer makes a VAT refund based on Article 54 of the VAT Law, in this field, he reduces the amount he returned as a VAT refund on this basis, that is, he reduces his liability for VAT in the tax period in which he made a VAT refund on this basis.
In field 41, the value of VAT calculated on goods and services received by persons registered for VAT, and in a given tax period, in addition to the above, this field shall also include VAT only if it was paid by recipients of services provided by persons established abroad in a given tax period and the proportional part of VAT that can be deducted in accordance with the provisions of Article 33 of the VAT Law. In addition to the above, a subcontractor in a special scheme in construction, after receiving confirmation that the contractor has paid VAT on the subcontractor’s outgoing invoices, shall enter in this field the value of VAT from the received proof of payment submitted to him by the contractor, with reference to the subcontractor’s ID number. This field shall not include the value of VAT on imports, i.e. the amount specified in field 42 and the amount paid as a lump sum compensation to the farmer, the amount specified in field 43.
In field 42, enter the value of the VAT paid by the taxpayer when importing goods into BiH for the given tax period, and only for those imports whose value is entered in field 22, i.e. for paid VAT on imports made according to customs declarations, except for VAT that the taxpayer cannot deduct according to the VAT Law. The term paid means that the payment was made in the tax period, i.e. from the 1st to the last day of the month, or tax period.
In field 43, enter the value of the paid lump-sum compensation paid to farmers in a given tax period by the taxpayer for the goods and services supplied. A farmer is a person who has received a decision from the ITA that he is entitled to a flat-rate compensation.
In field 61, a value representing the sum of the values from fields 41, 42 and 43 is entered.
In field 71, the difference of the values specified in fields 51 and 61 is entered. The value in this field can be positive or negative. If this value is positive, i.e. the value from field 51 is greater than the value from field 61, then the value shown in field 71 represents the VAT liability that the VAT payer is obliged to pay to the Single Account no later than the 10th of the month after the end of the tax period. If the difference is negative, i.e. the value from field 51 is less than the value from field 61, the VAT payer has the option to use the amount from field 71 (in this case, the “-” (minus) sign must be entered in front of the amount) as tax credits in the next tax period or to request a refund VAT from the Indirect Tax Administration.
In field 80, the mark “X” is entered in case there is an overpaid VAT amount, i.e. if the amount in field 71 is negative. To be precise, if field 80 is marked with an “X”, it is considered that the taxpayer has submitted a request. for VAT refund to his transaction account that he stated in the VAT registration application. All deadlines related to refunds run from the day when the VAT return with marked field 80 is received in the tax subsystem of the ITA Information System, (eTaxes).
In the fields 32, 33 and 34 are used to enter data on the calculated VAT for persons who are not registered for VAT, and the turnover was carried out in the Federation of BiH, the Republika Srpska or the Brčko District of BiH. Let us emphasize once again that it is the legal obligation of taxpayers to fill in correctly and accurately these fields because they are used for analysis and distribution of revenues from the Single Account to the entities and the Brčko District. Also, the provisions of Article 13 of the Law on Payments to the Single Account and Distribution of Revenues prescribe the obligation to report final consumption by VAT payers in VAT returns.
The final consumption data reported in the VAT return is defined as:
a) VAT for which the taxpayer is not entitled to a deduction,
b) VAT calculated on the supply of goods and services to persons who are not registered in the Single Register of Indirect Tax Payers and persons from abroad who do not have a registered office in BiH or a tax representative,
c) VAT calculated on all supplies of goods and services for non-business purposes, including VAT on shortages of goods, use of personally produced goods, changes in purpose and retention of goods after cessation of business and
d) Corrected input VAT within the meaning of the provisions of Article 36 of the Law on Value Added Tax.
The amount of VAT calculated on final consumption is entered in fields 32, 33 and 34 of the VAT return.
The following shall be recorded in fields 32, 33 and 34 of the VAT return:
a) Data on calculated VAT on the supply of goods to persons not registered for VAT, taking into account the seat of the taxpayer who carried out the supply of goods, i.e. where the seat of the taxpayer who carried out the supply is (in the Federation of BiH, Republika Srpska or Brčko District of BiH),
b) Data on calculated VAT on the supply of services to persons not registered for VAT, by entering the values of the calculated VAT in the aforementioned fields according to the place where the service was performed, except for the supply of services related to real estate, which place of supply is determined according to the place where the real estate is located,
c) Data on VAT from all internal invoices and VAT calculated on all supplies of goods and services for non-business purposes, including VAT on shortages of goods, use of personally produced goods, changes in purpose and retention of goods after cessation of business,
d) Input VAT from tax invoices for which the taxpayer is not entitled to deduct,
e) For points c) and d) the place of final consumption is determined according to points a) and b) of this paragraph, depending on whether the supply is of goods or services and
f) the amount of corrected input VAT in accordance with the provisions of Article 36 of the Law on Value Added Tax, whereby the place of supply is determined according to the place of use of the equipment or facilities for which the correction of the input tax deduction is made.
The data on the calculated VAT specified in points a) and b) also include the VAT stated in the issued and cancelled advance invoices.
Final consumption of a business unit – In the event that the taxpayer has one or more business units, when determining final consumption, it is necessary to be guided by what the final consumption actually refers to, i.e. whether the final consumption refers to the company’s headquarters or to the business unit. Final consumption is considered to be in the entity or Brčko District of BiH where the business unit is located, if the specific invoice for which there is no right to deduction refers to that business unit, which can be confirmed through the accounting of the costs of that business unit or the invoice itself indicates that the recipient is the business unit.
What is most often unclear when filling in the final consumption field is how to determine which amount should be entered in which field. The essence is that the VAT from final consumption that was made in the Federation of BiH, Republika Srpska or Brčko District of BiH is entered in the specified fields, it does not matter to whom the sale was made (it only matters that the person is not registered for VAT), but the only question is in which entity or district the sale of goods, which represents final consumption, was made.
There is a specific situation with taxpayers with the right to proportional deduction. This taxpayer receives invoices from its suppliers in which VAT is stated. For these suppliers, this taxpayer is a registered VAT taxpayer, so the supplier does not fill in fields 32, 33 and 34 on the VAT return for this specific invoice. However, a taxpayer with the right to proportional deduction can deduct the input tax invoiced by the supplier in a proportional part. The remaining part of the input VAT that the taxpayer could not deduct represents final consumption, and this amount of VAT is entered in the corresponding fields 32, 33 and 34 on the VAT return.
Example:
The filling out of VAT returns by taxpayers who exercise the right to proportional deduction of input tax does not differ from taxpayers who do not fall into this category in the part of filling out the return in parts I and II of the returns. The main difference when filling out the return of this taxpayer is in the part under III of the VAT return. Let us clarify what is filled in in part III of the VAT return. This part of the application is filled with data on final consumption, i.e. VAT calculated in final consumption. Specific situation with the taxpayer of the bank: The bank receives an invoice from its supplier in which VAT is stated, for that supplier the bank is a registered VAT payer, and therefore the supplier, for this specific invoice according to the bank, does not fill in fields 32, 33 and 34 on the VAT return. However, the bank may deduct a proportionate part of the input tax invoiced from the supplier. In the specific case, the bank can deduct only 10% of its tax liability, so we have the following situation: The bank had invoiced input tax for the given tax period in the amount of 1,700.00 KM, considering that it has the right to deduct only 10% of the total input tax, in our case 170.00 KM, the part of the input tax that cannot be deducted amounts to 1,530.00 KM. The taxpayer will enter the amount of 170.00 KM in field 41 that can be deducted from his output tax. The part of the input VAT of 1,530.00 KM that the bank could not deduct represents final consumption, as we have said, VAT from final consumption is the one that cannot be deducted. In this specific case, out of the mentioned 1,530.00 KM, 1,000.00 KM that cannot be deducted refers to the invoiced input VAT for the branch in Sarajevo, while the remaining part of the input VAT that cannot be deducted in the amount of 530.00 KM refers to the main branch in Banja Luka. When it comes to output tax that a taxpayer with the right to a proportional deduction of input tax charges to persons who are not registered for VAT, the procedure is the same as for all other taxpayers. In fields 32, 33 and 34, the amounts of output tax are entered for persons who are not registered for VAT according to the place where the taxable turnover of the taxpayer with the right to a proportional deduction of input tax was made.
Special attention should be paid when filling in data on final consumption, since the provisions of Article 67, paragraph (1), item 13 of the VAT Law prescribe a fine in the amount of 300.00 KM to 10,000.00 KM for a violation of the obligation to keep accurate business records, which includes accurately filling in data on final consumption, which in accordance with Article 56 of the Law enables the proper application of VAT.
It should be noted that the values in which the amount of tax liability is expressed are written accurately. You should keep in mind that these figures will be transferred to the ITA information system, and in this way a tax liability is formed in the ITA tax accounting.
Amounts in the VAT return are expressed in decimal numbers rounded to two decimal places.
