Taxation of Cryptocurrencies is not explicitly prescribed by Tax Authorities Regulations in BiH
Taxation of cryptocurrencies is not explicitly prescribed by federal tax regulations, but considering that there were inquiries from taxpayers of natural persons, the Tax Administration of the Federation of BiH (PUFBiH) addressed the Federal Ministry of Finance regarding the tax treatment of cryptocurrencies, which is responsible for initiating amendments to tax regulations.
Commenting on news in the media about the circulation of cryptocurrencies, and that the first bitcoin ATM will soon start operating in Sarajevo, the Tax Administration of the FBiH stated that from the tax aspect, in accordance with the provisions of the Law on Income Tax, income taxation is prescribed in the FBiH which are realized by natural persons (independent entrepreneurs and citizens) in the territory of the Federation of Bosnia and Herzegovina.
In Article 12, paragraph 1 of the Law, as they added, it is prescribed that income from self-employment is considered to be income that a natural person achieves by independent, permanent performance of activities that he engages in as a primary or supplementary occupation with the aim of generating income, and which includes income from trades and activities related to trades, agriculture and forestry, freelancers and other independent activities.
– Pursuant to the aforementioned provision regarding the treatment of cryptocurrency trade, according to the opinion of the Federal Ministry of Finance from January 14, 2022 and March 29, 2022, it is about performing an independent activity with the aim of earning income, which can be a primary or supplementary activity – they added from PUFBiH.
They stated that, although there are legal ambiguities in certain regulations, measures are being taken for legal action, so the Council of Ministers of BiH, at its session held on November 9, 2022, adopted the Decision on the establishment of a working group for the preparation of the Risk Assessment of Money Laundering and Terrorism Financing in Bosnia and Herzegovina related to virtual assets.
The tasks of the working group are the preparation of the Risk Assessment of Money Laundering and Financing of Terrorism in BiH related to virtual assets in accordance with the methodology of the Council of Europe for the sectoral assessment of the risk of money laundering and terrorist financing related to virtual assets and virtual asset service providers, the Action Plan to combat against money laundering and the financing of terrorism in Bosnia and Herzegovina related to virtual assets, and submission of the Risk Assessment and Action Plan to the BiH Council of Ministers.
The coordinator of the working group that directs the performance of activities is the Ministry of Security of Bosnia and Herzegovina, the FBiH Tax Administration told FENA.
