The Intra-European Organisation of Tax Administrations (IOTA) is a non-profit organisation that provides its members a platform for exchanging experiences and best practices on important issues and current developments concerning practical aspects of tax administration. IOTA was founded in 1996 by seven Central and Eastern European tax administrations and currently comprises 44 member tax administrations. Tax Administration of the Republic of Srpska was accepted as a full member of the Intra-European Organization of Tax Administrations (IOTA) at the 8th IOTA General Assembly, held June 14-16, 2004 in Prague.
Center of Excellence in Finance (CEF) – The Center for Excellence in Finance is a leading regional institution that promotes capacity building in public finances throughout Southeast Europe. Founded in 2001 by the Government of Slovenia, CEF has 12 members (Albania, Bulgaria, Bosnia and Herzegovina, Croatia, Kosovo*, Macedonia, Moldova, Montenegro, Romania, Serbia, Slovenia and Turkey). Members play a major role in defining CEF goals and strategies. CEF combines specially designed training programs for civil servants in key areas of public financial management, tax policy and administration, central banking and data and analysis for designing policies in the region with a good grasp of leadership skills required to manage reforms.
Fiscalis is an EU cooperation programme enabling tax administrations to create and exchange information and expertise. The programme involves EU member states, candidate countries for EU membership and potential candidate countries for EU membership. The general objective of the programme is to improve the proper functioning of the taxation systems in the internal market by enhancing cooperation between participating countries, their tax authorities and their officials. Specific objective of the programme is to support the fight against tax fraud, tax evasion and aggressive tax planning and the implementation of Union law in the field of taxation by: ensuring exchange of information, supporting administrative cooperation, enhancing the administrative capacity of participating countries with a view to assisting in reducing the administrative burden on tax authorities and the compliance costs for taxpayers. The Tax Administration of the Republic of Srpska actively participates in the Fiscalis programme.
INTERNATIONAL MONETARY FUND
The Tax Administration of the Republic of Srpska participates in the IMF’s Revenue Administration Project whose purpose is to strengthen the capacity of tax administrations in Bosnia and Herzegovina. The areas of focus are to improve the legal framework for tax administration to enhance processes for taxpayer services and enforcement; further develop capacity to gradually adopt a modern risk management approach; and enhance efficiency in audit and arrears management.
SWEDISH TAX AGENCY
The main aim of the Project„ Strengthening the Capacities of the Tax Administrations in BiH “ that our Tax Administration is implementing together with the Swedish Tax Agency is to improve the capacities of the tax administrations and to contribute to their transformation into modern, reliable and service-providing tax administrations in BiH. Together with the officials from all four tax administrations the experts from the Swedish Tax Agency have identified key areas that are common for all administrations where they would like to achieve improvement. Three priority areas have been identified on which specialised teams from the Swedish Tax Agency and BiH tax administrations will be working: Change of Mindset of the Employees in the Tax Administration; Taxpayer Service; Compliance Risk Management. One of the Project outcomes is taking over the best practices from the Swedish Tax Agency in these areas with a view to transforming these institutions into modern, reliable and service-providing tax administrations in BiH. This will be achieved through study visits and workshops.
GLOBAL FORUM ON TRANSPARENCY AND EXCHANGE OF INFORMATION FOR TAX PURPOSES AND OECD INCLUSIVE FRAMEWORK FOR BEPS
The Global Forum on Transparency and Exchange of Information for Tax Purposes is the leading international body working on the implementation of global transparency and exchange of information standards around the world. Currently, the Global Forum has 165 member states. Bosnia and Herzegovina has been a member of the Global Forum since 2018. Accession to the Global Forum includes the assumption of certain obligations related to the implementation of standards for the exchange of information for tax purposes on request (EOIR), spontaneous exchange of information and automatic exchange of information (AEOI).
Moreover, Bosnia and Herzegovina has been a member of the Inclusive Framework for BEPS (Base Erosion and Profit Shifting) since 2019. The Organisation for Economic Co-operation and Development (OECD)/G20 Inclusive Framework on BEPS brings together 141 countries and jurisdictions to collaborate on the implementation of the BEPS Package. Base erosion and profit shifting (BEPS) refers to tax planning strategies used by multinational enterprises that exploit gaps and mismatches in tax rules to avoid paying tax. The purpose of BEPS is to introduce fairer taxation, retain income in the country to which that income really belongs, as well as reduce the possibility of tax evasion. The BEPS package provides 15 Actions that equip governments with the domestic and international instruments needed to tackle tax avoidance, such as: addressing the tax challenges raised by digitalization, neutralising the effects of hybrid mismatch arrangements, designing effective controlled foreign company rules, limitation on interest deductions, countering harmful tax practices more effectively, prevention of tax treaty abuse, permanent establishment status, transfer pricing (action 8-10), measuring and monitoring BEPS established methodologies to collect and analyse data, mandatory disclosure rules, country-by-country reporting, improving dispute resolution mechanisms, developing multilateral instruments that would modify bilateral tax agreements. A country that is a member of BEPS is obliged to implement four actions/measures in the tax system that represent minimum standards for ensuring a tax framework that is in accordance with the prescribed international rules in the area of cross-border taxation. The following four actions represent a minimal standard: action 5 (counter harmful tax practices more effectively), action 6 (prevention of tax treaty abuse), action 13 (transfer pricing documentation and country-by-country reporting) and action 14 (improving dispute resolution mechanisms).
With regard to the procedures on exchange of information for tax purposes, the Tax Administration of the Republic of Srpska acts upon the bilateral and multilateral agreements on the avoidance of double taxation. So far, Bosnia and Herzegovina has concluded 38 agreements on avoidance of double taxation. In October 2019, Bosnia and Herzegovina signed the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (the MLI), which entered into force on January 1, 2021. The said Convention has revised the existing agreements on the avoidance of double taxation in order to prevent the possibility of non-taxation or reduced taxation through tax evasion or abuse of tax incentives based on bilateral agreements. In this way, existing agreements are changed without the need to conclude new agreements on the avoidance of double taxation. Moreover, Bosnia and Herzegovina signed the Multilateral Convention on Mutual Administrative Assistance in Tax Matters (MAAC), which entered into force on January 1, 2021 and has been applied since January 1, 2022. MAAC enables the Tax Administration of the Republic of Srpska to participate in international tax cooperation with other countries, exchanging information for tax purposes (upon request, spontaneous and automatic), participating in tax audits and providing assistance in tax collection, which is of great importance and benefit for the Tax Administration in the exercise of its competence regarding the prevention of tax evasion and compliance with domestic tax regulations.