According to the draft, any natural person who performs any activity without the obligation to register the company, will need to issue fiscal accounts if its total revenue of these transactions in the previous year is more than 5,000 km
The Government of the Federation of BiH has prepared a proposal of the new Law on Fiscalizing Transactions, which would introduce online fiscalization as part of the wider fiscal reform. Both houses of the Parliament of the Federation of Bosnia and Herzegovina adopted the Draft Law on Fiscalizing Transactions in the FBiH, which planned several significant newspapers. He is known who the law of the fiscalization taxpayer, and who is released, and now we analyze which thorough changes make the law, especially for those who record the least economic activity.
Namely, this law prescribes the obligation to issue fiscal accounts for all entities that generate the FBiH – including not only companies and craftsmen, but also individuals who are not registered entrepreneurs but generate annual income greater than 5,000 KM. This practically means that many citizens who occasionally perform certain transactions (e.g., apartments for rent or sales their own property) became the bonds of fiscalization if such revenues transgress the progress of 5,000 KM per year.
From the FBiH Government, it state that the goal of the proposed law is to combat the gray economy and increase the tax discipline using modern technologies for the records of each real-time transaction. The law revokes the exemptions that existed in the fiscalization system so far – there would no longer be spared or independent farmers at the market, nor the crafts of old traditional crafts sold by handicrafts, which were previously excluded – writes Akta.
Large changes to individuals
The new rule for natural persons is especially important. According to the draft, any natural person who performs any activity (selling products, goods or services) without the obligation of the company’s registration will need to issue fiscal accounts if its total revenue of these transactions in the previous year is more than 5,000 KM.
This includes a wide range of citizens, from the renters of real estate, through occasional traders (eg used vehicles), to independent craftsmen or fees that have not formally registered a business. Prague of 5,000 KM is relatively low – experts warn that the amount is easily achieved today, and suggests consideration of higher thresholds (e.g. 12,000 KM per year) that small service providers would not be overburdened with fiscal obligations
However, according to the current proposal, each person exceeding 5,000 KM revenues from these informal activities would have to be in the fiscal system. In the continuation, we analyze what economic and administrative consequences, it would have for small service providers, and which new liabilities (digital signatures, devices, software) are brought by this law.
Consequences for natural persons and small service providers
The introduction of fiscalization obligation for pre-formal or small activities inevitably carries additional costs and administrative procedures for these subjects. Some of the examples and potential consequences are:
- Rentors of apartments or rooms: a person who rents a private apartment now would have to issue a fiscal account for every payment of rent. This means the procurement of the fiscal system and recording each monthly lease through the Tax Administration System. For many “small landlords” that is renting one property (whose annual income exceeds 5,000 KM) This is a significant change – to lead business records such as a company and bear the costs of fiscalization equipment. Possible consequences are that some will increase rental prices to cover new costs or facing penalties if they do not meet the obligation.
- Occasional sellers of personal property (cars, equipment, etc.): Citizens who occasionally sell their own things (e.g. used vehicle, more valuable equipment) and achieves higher income from the defined threshold formally would also be considered “fiscalization bonds”. In practice, it would mean that even one-time sales that exceed 5,000 KM require the issuance of a fiscal account. Such sellers would have to previously obtain a fiscal device or access to the appropriate software to generate an account at all, which can be unprofitable if it is rare sales. The administrative load for disposable sales is becoming significant – potentially disturbing citizens to legally report such transactions.
- Small craftsmen and craftsmen: For registered craftsmen (independent entrepreneurs) Fiscalization is not a new obligation – most of them and now issues accounts if they are in the VAT system. However, the new law is abolished by some exemptions and tightens obligations and for the least. Traditional crafts (old and artistic crafts, e.g. Kujundzije, Abadžije, Corps, etc.) who have so far been exempted from fiscalization during sales in markets or fairs.
– Representatives of craftsmen warn that the imposition of this obligation to many would be executed: the old crafts are “Low profitable, and if you introduce the fiscal cashier – says Mirza Batalović, an appointment in the FBiH Parliament, explaining that such crafts excludes.
Željko Babić, the President of the FBiH Craftsmen, points out that these are mostly self-employed individuals with modest traffic and lumping taxes, and their fiscal cash register is “the burden in every respect, and technical and financial.
In a broader sense, economic consequences for small subjects will be reflected in the increase in their operating costs (procurement of equipment, digital certificate, possible maintenance fees) and in need of adhering to strict issuing accounts. Some could decide to formalize their work (register activities) to make it easier to meet the conditions, while others can try to avoid crossing the threshold of 5,000 KM in order to fail to fall under the obligation of fiscalization.
Administrative, natural persons who have so far did not have contact with the tax system in this way, in this way, would have to learn the fiscalization procedure, take care of each collection and keep copies or electronic accounts. Non-compliance with new regulations is the risk of significant penalties – monetary sanctions of a minimum of 100 KMs, and as many as 30,000 KM for more severe offenses are provided for a fine of 100 KM, and for the bidies of fiscalization – natural persons of 5,000 KM.
This is an additional reason for taking care of small service providers, which have never known what the fiscal account has never known so far, and now they face potentially high penalties if they do something wrong.
Obligation to own a digital signature
Additionally, the central technological requirement of online fiscalization is the use of a qualified digital signature when issuing the account. Each fiscalization taxpayer shall, according to the draft law, possess the certificate for the electronic signature issued by an authorized certification body in accordance with the Law on Electronic Signature.
In practice, it means that e.g. A natural person issuing fiscal accounts will have to have its own digital certificate (digital identity) to electronically sign each account before sending the tax administration. Digital signature guarantees data authenticity and connects an account with a specific fiscalization bond
In addition to the digital signature, the new system of fiscalization imposes other technical and administrative steps that each taxpayer must meet and imposes additional fiscalization costs.
Due to the above, there is a fear that part of the smallest subjects would rather stop working or go to a complete gray zone, but enter the system that imposes fixed costs that cannot cover a small business volume.
Reactions of experts and stakeholders
The proposed changes in fiscalization caused live reactions to the professional public, Chambers of Chambers and Associations.
In particular, the illogical emphasizes that the Law proposal in the valid version includes those smallest artisans, while at the same time, the bettines are excluded under certain conditions.
Namely, the Draft Law stipulates that the activity of games of happiness (betting) is exempt from fiscalization if the system of these organizers is directly connected online with the tax administration.
– Crafts believe that it is a double standard: “They released betting, but the crafts did not remember” – it criticized this approach to Mirza Batalović. He had previously indicated that old and traditional crafts should not be fiscalized and proposed concluded in accordance with which their exemption is required.
– I would thank the Minister of Mr. Mijatovic, who accepted this suggestion sent through the conclusion and confirmed that it would be listed in the bill – he added.
The FBiH Ministry of Finance has promised to consider that amendment, which pours hope that at least the most vulnerable categories of craftsmen would be spared.
