Sparkasse Bank has lost a dispute against the Indirect Taxation Administration of Bosnia and Herzegovina before the Court of Bosnia and Herzegovina worth 1,567,000 marks, which is the amount of additional VAT withheld from May 2018 to the end of September 2021, the CAPITAL portal has learned.
Capital it says that this is the third bank that has so far lost an administrative dispute before the Court of Bosnia and Herzegovina due to an additional deduction based on VAT on the commission for card transactions.
Before it, it was Ziraat and Nova banka. In a lawsuit, this bank disputed the fact that the ITA calculated and charged them VAT on commissions for transactions via payment cards, which until then had been treated as a related banking service exempt from VAT.
Namely, banks used to pay commission for card transactions to large companies, such as Visa or MasterCard, but not VAT on that commission. The lawsuit was filed last year, and it points out that Sparkasse Bank was charged additional VAT on services provided by global card companies such as Visa and MasterCard, and that it is necessary to determine whether the services of foreign companies are tax-exempt.
“The decision of the ITA is correct and legal and has not been called into question by legal objections. During the controlled period, Sparkasse Bank received services from card houses that were qualified as non-financial services for which the calculation of VAT was omitted,” the judgment reads.
It is further stated that it has been indisputably established that the bank acted on the market as someone who issues and accepts payment cards, for which it was authorized by Visa and MasterCard and for which it was issued invoices.
“The allegations in the lawsuit that the cut-off of the additional liability is the result of a change in the interpretation of the regulations so that the ITA derogates previously issued opinions, because the bank did not address the ITA regarding the disputed issue, are also unfounded. The allegations of the lawsuit about retroactive determination of tax liability are also baseless, because any control can only be carried out for the past period, up to five years,” the verdict states.
Let us remind you that last year, the inspectors of the BiH Indirect Taxation Administration made a round of banks and for the first time calculated and charged them VAT on transactions via payment cards, which until then were treated as a connected banking service exempt from paying VAT, which CAPITAL wrote about.
“In the controls that the ITA conducted with banks in 2023, additional obligations for VAT were determined for the tax period before 2023. Based on this, additional VAT was calculated with the associated interest and the amount of KM 43,409,570 was collected from the banks,” the ITA told us at the time.
The banks had to pay the additional tax installment immediately, because their appeals and lawsuits do not delay execution, but then they initiated administrative disputes before the Court of Bosnia and Herzegovina.
Who are the millions of card fees in Bosnia and Herzegovina going to?
Vijesti.ba also recently wrote about this topic.
Namely, the largest European retail companies and online retail companies raised their voices against the high fees of Visa and Mastercard during this year.
In Bosnia and Herzegovina, there is a noticeable growth in card payment volumes, but what does not follow the entire development is legislation and regulations. One of the reasons is the enormous fees of 2 to even 12 percent, which banks take for transactions and thus make extra profits.
In addition, high bank transactions are one of the reasons for the high final prices faced by consumers.
According to the data of the FBiH Banking Agency, the net income of banks from fees and commissions increased to 215.6 million KM from 204.5 million KM in June last year, or by 5.4 percent.
According to experts, it is time for the banking sector, which is mostly controlled by foreigners, to harmonize with the market in Bosnia and Herzegovina and reduce the current fees so that the prices for end customers are cheaper.
