The latest changes in Tax regulations
Tax Alert, March 2013
Rulebook on amendments to the Rulebook on application of the Corporate Income Tax Law of Republika Srpska.
The Rulebook on amendments to the Rulebook on application of the Corporate Income Tax Law in Republika Srpska (hereinafter “the Rulebook”) was published on the 28th February 2013 in the Official Gazette of Republika Srpska no. 17, and shall be applicable as of the 8th March 2013.
Significant amendments were made in the following sections of the Rulebook:
The term “permanent establishment” contained in the Rulebook on application of the Corporate Income Tax Law in Republika Srpska („Official Gazette of RS“, no. 129/06, 110/07, 114/07, 62/08, 9/09, 122/10 and 73/11) is replaced with the term “Branch office of a foreign legal entity (hereinafter “permanent establishment)”.
*The purpose of this lingual amendment is to adjust provisions of the Rulebook on application of the Corporate Income Tax Law of Republika Srpska („Official Gazette of RS“ no. 129/06, 110/07, 114/07, 62/08, 9/09, 122/10 and 73/11) with provisions of the Law on Amendments to the Companies Law of Republika of Srpska ("Official Gazette of RS", no. 100/11) and the Law on Amendments to the Law on Business Entities Registration in the Republika Srpska ("Official Gazette of RS", no. 102/12), given that, besides legal, also technical requirements for incorporation and registration of a branch office of a foreign legal entity have been met.
The Rulebook contains a new provision which obliges the taxpayer - legal entity from Republika Srpska or branch office of a legal entity - which concludes a business contract with a non-resident, who performs its business operations via a permanent establishment, to inform the Tax Authority about the concluded contract and its essential elements within the period of five days upon its conclusion.
The Rulebook elaborates provisions contained in the amendments to the Corporate Income Tax Law of Republika Srpska (“Official Gazette of RS”, no. 57/12) which stipulates deduction of the taxpayers’ tax base for investments in production which relate to equipment, plants and real estates, as well as for hiring a minimum of 30 new employees for an indefinite period.
In that context, the official corporate income tax return forms have been amended in following way:
Instead of the Annual corporate income tax return form 1101 and the Advance payment corporate income tax return form 1104, new forms 1101, 1102 and 1104 will be used.