One thousand eight hundred and thirty-eight companies in Republika Srpska did not have a single employee last year, but that did not prevent them from ending the business year with a profit of almost 170 million marks. These are mostly foreign companies, and most of them come from Serbia, Slovenia, Italy, Croatia and Austria.
According to the data of the Agency for Mediation, IT and Financial Activities, when it comes to companies that operate without employees, they are most often IT companies or entities that sell from abroad and have an intermediary in the RS.
The five activities in which the highest profit was recorded refer to business consulting and other management, construction of residential and non-residential buildings, engineering activities and related technical consulting, non-specialized wholesale trade and electricity production.
No matter how unbelievable it sounds that a profit of 170 million marks can be achieved without a single employee in most cases, according to the profession, there is nothing in dispute.
“There are companies that operate quite legally, legitimately and that is normal. On the other hand, there are certainly also companies that engage in dubious activities and whose registered companies are used for what is colloquially called ‘money laundering’. Control authorities at all levels should pay attention to such companies”, points out Saša Grabovac from the Association of Economists “SWOT”.
The laws in Bosnia and Herzegovina allow a company to have no employees. It is only important that they properly pay income tax and VAT.
“A certain company can have a smaller number of employees, but sell goods or possibly sell services in such a quantity that it really has a large reported turnover. VAT is calculated and paid on that reported turnover, and this has absolutely no effect on the number of workers who may be there are working,” says Ratko Kovačević, spokesman for the BiH Indirect Taxation Administration.
The profit tax of 10 percent in both entities is the main reason why an increasing number of foreign companies that do not have registered workers decide to do business in BiH.
“Will they go to the Off Shore zone concept, where the business of such companies is at stake, or will they come to work in BiH, which is as it is, but is tax-compliant. And on that basis, they can withdraw their cash on which they paid taxes and take to their home country, says economic analyst Zoran Pavlović.
The average profit tax rate in Europe is 30 percent, that is, it is three times higher than in Bosnia and Herzegovina. Good for foreign companies, and even better for the governments in both entities for whom the profit tax paid by foreigners is a gift from heaven, considering that they have done nothing for this money.
