Federation of Bosnia and Herzegovina rental income tax rules

In the Federation of Bosnia and Herzegovina, property owners are legally obligated to pay income tax on rental earnings, regardless of whether the rent is collected in cash or via bank transfer. Under the Income Tax Law of the Federation of BiH, rental income is classified as income from property and remains taxable even without a formal written contract or digital transaction record.

The income tax rate is 10%. Owners have the option to deduct actual costs or utilize a standard deduction of 30% of the earned income to determine the tax base. For instance, if a property in Sarajevo is rented for 700 KM monthly, a taxpayer opting for the 30% standard expense deduction would pay an effective tax rate of 7% on the total annual rent collected.