THE LAW
ON SPECIAL MODALITIES FOR TAX DEBT SERVICING1
Article 1
This Law shall govern special modalities and procedure for tax debt servicing.
Article 2
This Law aims to alleviate the financial position of companies affected by economic crisis, to
maintain current solvency, and stimulate employment.
Article 3
The tax debt servicing procedure prescribed under this Law shall be respectively subject to
provisions of the laws governing tax procedure and general administrative procedure.
Article 4
(1) The terms used herein shall have the following meaning:
a) tax debt constitutes taxpayer’s debt pertaining to taxes and surtaxes due for payment
accordingly to deadlines prescribed under this Law,
b) tax constitutes any payment obligation, the taxpayer is obliged to pay to the Budget of
Republic of Srpska, to budgets of cities, municipalities, and funds, which is deemed
irrecoverable, and shall include taxes, social contributions, fees, and charges,
c) surtax constitutes any form of payment to the Budget of Republic of Srpska,
municipality, city, and funds ensuing from obligation to pay tax, including tax related
interest, and costs of procedure,
d) share in ownership constitutes stocks, i.e. member’s share in a company.
(2) Other terms used in this Law shall have the same meaning as that in the Law on Tax
Procedure of Republic of Srpska.
Article 5
(1) In pursuance of this Law, tax debt can be serviced as follows:
a) byway of one-off deferral of payment of tax debt, for a period of up to one year, or for
the period of up to 60 months maximum, applying equal monthly installments,
b) byway of conversion of tax debt into share in ownership in a company, and
c) by way of payment of the entire amount of principal debt, with interest write-off.
(2) Notwithstanding Paragraph 1, Item a) of this Article, tax debt can be serviced by way of
deferral of payment of tax debt, applying equal monthly installments for the period of up to
60 months with a one-year grace period.
Published in the “Official Gazette of Republic of Srpska” no. 66/13, dated 06 August 2013, Changes and
Amendments published in the “Official Gazette of Republic of Srpska” no 52/14, as of 19 June 2014.
1
Article 6
(1) Deferral of payment of tax debt referred to in Article 5, Paragraph 1, Item a) of this Law
can be approved to tax debtor whose debt has been established byway of tax declaration or
tax decision document, given the following terms have been met:
a) that tax debt was due for payment no later than in the year preceding the year in
which deferral request is being filed in line with Article 7 of this Law,
b) that tax debt is secured, and
c) that individual and due obligations pertaining to retirement and disability insurance
have been serviced for employees who shall become eligible to enjoy specific rights
arising from retirement and disability insurance during the deferral period.
(2) One of the following means shall be used to secure tax debt:
a) mortgage to the taxpayer’s real-estate or mortgage of a third party,
b) lien on movable assets of a taxpayer or the lien of a third party,
c) irrevocable bank guarantee payable upon first call, and
d) vouch of another party, owner of property used as security for tax debt.
(3) Security referred to in Paragraph 2 of this Article shall be, at least, of the same value as
the total tax debt, which, in addition to principal debt, includes the interest incurred.
Article 6a
(1) All taxpayers having sustained damages caused by May 2014 floods in Republic of
Srpska can be eligible to tax debt servicing referred to in Article 5, Paragraph 2 of this Law.
(2) Damages referred to in Paragraph 1 of this Article shall mean the damages as defined
under the provisions of the law governing the Solidarity Fund for Reconstruction of Republic
of Srpska.
(3)Deferral of payment of tax debt refer to in Paragraphs 1 of this Article can be approved to
a taxpayer for whom tax debt has been established under tax return or tax decision document,
given the following criteria:
a) that tax debt was due for payment no later than by 30 June 2014,
b) that tax debt is secured accordingly to Article 6, Paragraphs 2 and 3 of this Law, no later
than by expiration of grace period,
c) that individual due liabilities pertaining to pension and disability insurance have been
paid for employees entitled to pension and disability insurance rights during the deferral
period,
d) that taxpayer holds proof of damage sustained due to May 2014 floods in Republic of
Srpska.
(4) Taxpayers referred to in Paragraph 1 of this Article are entitled to deferral of payment of
tax debt, applying equal monthly installments for the period of up to 60 months, with a oneyear grace period, which shall commence as of the day of delivery of a decision document
approving the differed payment of tax debt.
Article 7
(1) Payment deferral procedure pertaining to tax debt referred to in Article 5, Paragraph 1,
Item a), and Paragraph 2 of this Law shall be initiated by way of a payment deferral motion
submitted to the Ministry of Finance (hereinafter: the Ministry), no later than 30 days as of
the day of delivery of the final decision document for payment of tax liabilities to the
taxpayer in reference to liabilities established under Tax Administration’s decisions
document.
(2) Along with the motion referred to in Paragraph 1 of this Article, the taxpayers shall
supply the following:
a) a decision document establishing tax liabilities, or tax declarations recorded by Tax
Administration of Republic of Srpska (hereinafter: the Tax Administration), if the
motion filed is pertaining to tax debt established under tax declarations,
b) proof of security provided as referred to in Article 6, Paragraph 2 of this Law,
c) statement confirming the terms referred to in Article 6, Paragraph 1, Item d of this
Law have been met,
d) a photo-copy of financial statements for the last completed business year, and
e) proof rendered from a competent body on damages sustained, for taxpayers referred
to in Article 6a, Paragraph 1 of this Law.
(3) Notwithstanding Paragraph 2 of this Article, taxpayers referred to in Article 6a, Paragraph
1 of this Law can supply proof of having secured the debt no later than by expiration of grace
period, and should they fail to do so, the Minister, i.e. Director of Tax administration shall
abolish the previously approved decision document on differed payment.
(4) Minister of Finance (hereinafter: the Minister), shall prescribe the form of the tax debt
payment deferral motion.
Article 8
(1) The Minister shall issue a decision document in regards to tax debt payment deferral
motion.
(2) The summary administrative procedure shall apply to the motion referred to in Paragraph
1 of this Article, and it shall not exceed 30 days following the day of receipt of a proper
motion.
(3) The decision document referred to in Paragraph 1 of this Article, in addition to mandatory
elements prescribed under the law governing administrative procedure, shall also contain the
payment schedule including interest calculated up until the final date of payment of the
respective tax debt.
(4) The Ministry shall calculate the interest to the total amount of tax debt subject to a
decision document referred to in Paragraph 1 of this Article, in pursuance of the law
governing tax procedure.
(5) The decision document referred to in Paragraph 1 of this Article shall be regarded as
definitive in an administrative procedure without right to appeal. Respectively, an
administrative dispute can be initiated before the competent court.
(6) The Ministry shall deliver the decision document referred to in Paragraph 1 of this Article
to Tax Administration no later than five days following the date of its issue, for the purpose of
record keeping and monitoring of performance of obligation rendered under the decision
document.
(7) Notwithstanding the provisions of Paragraph 1 of this Article, the Tax
Administration Director shall decide upon deferral motion for tax debt not exceeding 30.000
BAM, in view of conditions and methods prescribed under this Law.
(8) Tax Administration shall calculate interest to the total amount of tax debt subject to a
decision document referred to in Paragraph 7 of this Article, in pursuance of the law
governing tax procedure.
(9) An appeal can be filed to the Ministry against Tax Administration Director’s decision
document referred to in Paragraph 7 of this Article, within 15 days following the day of
delivery of the decision document to the tax debtor.
(10) Notwithstanding Paragraphs 4 and 8 of this Article, the Ministry, i.e. Tax Administration
shall not calculate interest during grace period for debt having been differed along the lines of
Article 6a of this Law.
Article 9
(1) Tax Administration shall monitor the enforcement of the decision document on approval
of deferral and shall inform the Ministry immediately if it establishes that the taxpayer is not
adhering to the conditions and deadlines set out in the decision document.
(2) If taxpayer fails to adhere to conditions and deadlines referred to in the decision document
on deferred payment of tax debt, the Minister, i.e. the Director of Tax Administration shall
repeal the respective decision document ex officio, after receiving the information referred to
in Paragraph 1 of this Article.
(3) In cases referred to in Paragraph 2 of this Article, the Tax Administration shall, bearing in
mind the efficiency of collection, collect the unpaid tax debt byway of:
a) means of security, or
b) enforced collection procedure.
(4) Taxpayer for whom the decision document has been repealed as set out in Paragraph 2 of
this Article, shall not be entitled to payment deferral for the same tax debt.
Article 9a
(1) Taxpayers entitled to differed payment of tax debt in line with Article 5, Paragraph 1,
Item a) of this Law, and having sustained damages due to May 2014 floods in Republic of
Srpska, can exercise the right to deferred payment of tax debt as prescribed under Article 5,
Paragraph 2 of this Law if they file a request to have the decision document on deferred
payment of tax debt abolished.
(2) In the event referred to in Paragraph 1 of this Article, the Ministry, i.e. Tax
Administration shall abolish the current decision document, and further procedure shall be
conducted along the lines of Articles 7 and 8 of this Law.
Article 10
Statue of limitation for tax liabilities shall stay during the tax debt payment deferral period.
Article 11
(1) All tax debtors established as companies and fulfilling the terms prescribed under this
Law and the law governing the establishment and operations of companies shall be entitled to
service their tax debt in line with Article 5, Paragraph 1, Item b) of this Law, namely through
conversion of tax debt into share in ownership.
(2) Tax debt which was due no later than 31 December 2012 can be serviced in line with
Paragraph 1 of this Article.
Article 12
(1) The procedure for servicing of tax debt byway of conversion into share in ownership shall
be initiated through a motion for initiation of procedure of conversion of debt into share in
ownership. The motion stating the basic information about the debtor shall be submitted to a
ministry competent for the filed pertinent to the line of business of tax debtor.
(2) Along with the motion referred to in Paragraph 1 of this Article, the taxpayers shall
supply the following:
a) a Decision of the tax debtor’s competent body on intention of converting tax debt into
share in ownership,
b) competent court’s Decision on registration of tax debtor,
c) proof of ownership structure, respectively the structure of the tax debtor’s capital,
d) a photo-copy of the set of financial statements of the tax debtor for the last completed
business year along with notes to financial statements,
e) a photo-copy of the audit reports to financial statements for the last completed
business year in case the tax debtor is subject to audit in line with regulations, and
f) Tax Administration’s Certificate of debt of the tax debtor.
(3) Following initiation of procedure referred to in Paragraph 1 of this Article, Tax
Administration shall issue an interim measure of interdiction over property of the tax debtor,
only after receiving the information from the competent ministry on initiation of the
procedure for conversion of tax debt into share in ownership.
Article 13
(1) The Government of Republic of Srpska (hereinafter: the Government), shall issue the
Decision on approval of conversion of tax debt into share in ownership following a proposal
of the ministry competent for the filed pertinent to the line of business of the tax debtor
subject to the procedure of conversion of tax debt into share in company’s ownership.
(2) The Government, at the proposal of the competent ministry, shall deny the proposal to
initiate the procedure for conversion of debt into share in ownership in case it finds the
procedure unsupportive of the aim referred to in Article 2 of this Law, and primarily if:
a) the founder, i.e. responsible person with the tax debtor had been convicted of crime or
is subject to criminal proceedings due to evasion of taxes and contributions, and
b) it establishes that tax debtor or its related person disposes with assets sufficient to
service the tax debt without threat to its solvency and payment of employee wages.
(3) The law governing tax procedure shall serve as basis to establish the relation of the tax
debtor with another person.
(4) Following the Decision referred to in Paragraph 1 of this Article, the managerial
structures of the tax debtor shall organize the shareholders’, i.e. members’ assembly to issue a
decision on capital increase through conversion of tax debt into share in ownership, in line
with regulations governing this field.
Article 14
(1) Based on tax debtor’s motion, and following a Decision referred to in Article 13,
Paragraph 1 of this Law, the Minister shall issue a decision document on servicing of debt
through conversion of tax debt into share in ownership in the tax debtor (company), with
precisely determined amount of converted tax debt, the share of the Republic in the capital
based on conversion, i.e. the share of extra-budgetary funds ad local communities in the
capital.
(2) Along with the motion for servicing of tax debt through conversion into share in
ownership referred to in Paragraph 1 of this Article, the tax debtor shall supply the Decision
on recapitalization.
(3) The Ministry shall deliver the decision document on servicing of debt through conversion
into share in ownership to the tax debtor who will forward it to the competent court of
registration along with other documentation required for registration of increase of the basic
capital accordingly to regulation governing registration of companies.
(4) Tax debtor shall also submit the decision document referred to in Paragraph 1 of this
Article to the Central Registry of Securities (hereinafter: the Central Registry), for the
purpose of registration of ownership over shares in line with regulation governing the
securities market. The Central Register shall issue a certificate respectively.
(5) The registration decision document and the Central Registry certificate shall be submitted
to the Ministry by the tax debtor, no later than five days following the take over of these
documents from the competent body.
Article 15
The book value (price to book ratio), shall apply to conversion of tax debt into share in
ownership using the data from the financial statement of the tax debtor for the last completed
business year.
Article 16
The Ministry, on behalf of the Government, shall be the creditor for the entire tax debt in the
procedure of conversion of tax debt into share in ownership.
Article 17
Beneficiary of public revenue in converted tax debt shall be established in line with
regulation governing the budget system of Republic of Srpska.
Article 18
(1) Stocks, i.e. member’s share acquired by Republic of Srpska in the procedure for servicing
of tax debt through conversion shall become part of the portfolio of the joint stock company
“Share Fund of the Republic of Srpska” Banja Luka, accordingly to debt arising from taxes
pertaining to the Budget of Republic of Srpska.
(2) Stocks, i.e. member’s share acquired by extra-budgetary funds and local self-governance
units, based on their outstanding receivables, shall belong to them.
Article 19
(1) Changes to tax records shall be made based on decision document referred to in Article
14, Paragraph 1 of this Law, which the Ministry shall forward to Tax Administration, along
with the Central Registry certificate.
(2) After changes have been made to tax records, Tax Administration shall issue a certificate
on end balance of liabilities after the tax debt servicing, and shall forward it to the tax debtor.
Article 20
Conversion of tax debt into share in ownership in shareholding companies shall be made only
in case where shareholders’ assembly issues a decision on acquisition of voting shares
without obligation to publish the takeover bid accordingly to regulation governing the
takeover of shareholding companies.
Article 21
(1) Servicing of tax debt in line with Article 5, Paragraph 1, Item c) of this Law byway of
payment of the principal tax debt with interest write-off shall be available to all tax debtors in
case that by 31 December 2014 they will have paid the entire principal tax debt which was
due for payment no later than 30 June 2013.
(2) Principal debt referred to in Paragraph 1 of this Article shall also imply the debt subject to
deferred payment under documents issued by the Ministry, i.e. Tax Administration.
(3) In case of servicing of tax debt along the lines of Paragraph 1 of this Article, the entire
amount of interest calculated to debt shall be written-off.
(4) Tax debtors who fail to service the entire principal debt by deadline referred to in
Paragraph 1 of this Article, shall not be entitled to interest write-off referred to in Paragraph 2
of this Article.
Article 22
(1) The procedure pertaining to rights referred to in Article 21, Paragraph 2 of this Law shall
be initiated through tax debtor’s motion.
(2) Tax Administration shall be deciding on the motion referred to in Paragraph 1 of this
Article in line with the laws governing tax and general administrative procedure.
(3) Following a decision document confirming the fulfillment of conditions referred to in
Article 21 of this Law and approving the interest write-off, Tax Administration shall without
delay make appropriate entries in tax accounting and in tax card of the respective tax debtor.
Article 23
The Ministry and Tax Administration shall supervise the application of provisions of this
Law.
Article 24
This Law shall enter into force eight days following its publication in the “Official Gazette of
Republic of Srpska”
No: 01-1673/13
18 July 2013
Banja Luka
CHAIRMAN
OF THE NATIONAL ASSEMBLY
MSc Igor Radojičić s.r.