How B2B Reverse Charge Works in Bosnia and Herzegovina

Updated 8 days ago

Reverse charge moves the VAT obligation from you to your business customer. In Bosnia and Herzegovina it applies only while you have no registration and no local tax representative there. Register, and it stops. That is different from the EU and from several other countries Kintsugi supports, so it is worth understanding before you look at your invoices and wonder what changed.

Reverse charge applies when you are not established in Bosnia and Herzegovina, have not appointed a tax representative there, and are selling to a VAT-registered Bosnian business
Your customer accounts for the 17% themselves, and you invoice with no VAT
Once you register, you charge 17% on business sales too, and reverse charge no longer applies to them
Reverse charge never applies to consumer sales, which is what makes the registration threshold matter
Kintsugi applies the right treatment automatically based on your registration status

When Reverse Charge Applies

Three conditions all have to be true:

You are not established in Bosnia and Herzegovina
You have not appointed a tax representative there, meaning you are not registered
Your customer is a VAT-registered business in Bosnia and Herzegovina

When they are, you issue the invoice with no Bosnia and Herzegovina VAT. Your customer records the output VAT and the matching input VAT on the same monthly return, so the tax nets out for them if the purchase is for taxable use.

Bosnia and Herzegovina does not require any particular wording on the invoice for this. There is no statutory notation, and you do not need to issue a self-invoice.

When Reverse Charge Stops

	Before you register	After you register
Sales to a Bosnian business	No VAT from you. The buyer self-assesses	You charge 17%
Sales to a Bosnian consumer	No VAT, because you cannot charge before registration takes effect	You charge 17%
Who remits the tax on business sales	Your customer	You, through your tax representative
Who is liable	Your customer	You and your tax representative, jointly

This is the point that catches people out. In the EU, a registration in one member state does not stop reverse charge on cross-border business sales. In Bosnia and Herzegovina it does. Appointing a tax representative makes that representative liable for VAT on your Bosnian supplies, which means the obligation is yours again, for business customers and consumers alike.

Why This Matters For The Threshold

A non-resident business selling only to Bosnian businesses has no registration duty at all, whatever the sales volume, because reverse charge covers every transaction.

The moment consumer sales enter the picture, that stops working. A consumer cannot self-assess VAT, so somebody has to charge it, and that somebody is you once you pass BAM 100,000. See Understanding Bosnia and Herzegovina VAT Registration Triggers and Thresholds.

Confirming Your Customer Is A Business

Kintsugi decides between business and consumer treatment from your transaction data. Supply a valid 12-digit PDV number on business sales so the right treatment is applied. Without one, a sale may be treated as a consumer sale, which changes both the VAT you charge and how the sale counts against your threshold.

A Separate Rule For Construction Work

Bosnia and Herzegovina also runs a domestic reverse charge for construction work on local property, including new builds, renovation, expansion, and maintenance, where the total value is above BAM 25,000. In those cases the VAT obligation sits with the recipient.

This is listed for completeness. It is not part of Kintsugi's Bosnia and Herzegovina scope, which covers the B2B SaaS and B2C SaaS categories.

What This Does Not Cover

Input tax credit mechanics for your customer. Your Bosnian business customer handles their own return. Kintsugi does not calculate input VAT for anyone.
Which rate applies. See Bosnia and Herzegovina VAT Rates and Taxability Reference.
Reverse charge in other countries. Treatment differs by country. Do not read this article as describing Kintsugi's behavior anywhere else.
Construction and other categories outside B2B SaaS and B2C SaaS. Named above for awareness, not supported in Kintsugi.

This article is general information about how Kintsugi works, not tax advice for your specific situation.

FAQs

Q: My Bosnia and Herzegovina invoice shows no VAT. Is that a bug?

A: Not if you are selling to a Bosnian business and you are not registered there. That is reverse charge working correctly. Your customer accounts for the 17%.

Q: I registered, and now my business invoices show 17%. Why?

A: Because that is the correct treatment once you are registered in Bosnia and Herzegovina. Registration removes the reverse charge on your business sales, and it is one of the practical consequences of crossing the threshold.

Q: Do I need special wording on a reverse charge invoice?

A: Bosnia and Herzegovina prescribes none. Issue the invoice without VAT.

Q: Can I keep using reverse charge to avoid registering?

A: Only if every Bosnia and Herzegovina sale you make is to a business. Once you sell to consumers there, reverse charge cannot cover those sales and the BAM 100,000 threshold applies.

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