Amendments to the Corporate Income Law in Republic of Srpska

Amendments to the Corporate Income Law in Republic of Srpska have entered into force as of 01 January 2017. The most notable changes are:

• The withholding tax on dividends received by foreign legal entities has been increased from 5% to 10%, unless otherwise specified by the relevant Double Tax Treaty.
• In order to exercise the rights for the application of lower tax rates or tax relief arising from the applicable DTT, foreign legal entities are required to provide the issuer with the following documents:
  • Certificate of Tax Residence (not older than one year)
  • Signed and stamped statements on the income and beneficial ownership of the shares. The forms will be prescribed by the correspodent Rulebook.

Impact on investors: Amendments to the Corporate Income Law in Republic of Srpska increased the withholding tax rate on dividends received by foreign institutional investors and prescribed documentation requirements for application of DTTs.