SUMMARY
INDEPTH ANALYSIS
1. Scope of the Mandate – Transactions Covered: The new e-invoicing framework in Bosnia and Herzegovina (specifically in the Federation of BiH) will require **electronic invoicing and real-time reporting for practically all types of transactions. This covers Business-to-Government (B2G), Business-to-Business (B2B), and Business-to-Consumer (B2C) dealings. The mandate explicitly applies to sales of goods, provision of services, property transfers, and other business transactions in the Federation. In other words, every transaction must be documented by an invoice or receipt and reported to the Tax Administration, with very few exceptions. [vatupdate.com], [edicomgroup.com] [comarch.com], [vatupdate.com] [zenit.ba], [zenit.ba]
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Domestic Transactions: All domestic transactions between taxable persons in the Federation are in scope. This includes standard B2B sales (e.g. between companies), retail B2C sales (e.g. to consumers), as well as B2G supplies to public entities. The aim is to create a continuous transaction control (CTC) system encompassing the entire economy. Under the draft law, an “e-invoice” is defined as any invoice issued in a structured electronic format that allows automatic electronic processing and complies with the European standard for e-invoices. Thus, paper invoices will be phased out once the mandate takes effect. [vatupdate.com] [sovos.com], [vatcalc.com] [sovos.com], [edicomgroup.com] [sovos.com]
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Cross-Border & International: The framework also addresses cross-border transactions, although Bosnia and Herzegovina is not an EU member. Exports (sales to foreign customers) are included – Federation taxpayers may issue electronic invoices for exports of goods or services to non-resident buyers, with the invoices treated as valid even if the customer is abroad. These export e-invoices likewise get reported through the system and carry a verification code for authenticity. Imports and Intra-EU acquisitions (purchases from foreign suppliers) are also effectively captured: if a Federation business buys from a supplier who isn’t registered in the local tax system (e.g. a foreign company), the buyer is required to self-issue an invoice (self-billing) to document and report that purchase. In other words, when reverse-charge scenarios or unregistered suppliers are involved, the domestic buyer must create an e-invoice on the platform on the supplier’s behalf, ensuring the transaction is reported to the tax authority. This mechanism brings intra-Community acquisitions, imports, and other cross-border B2B purchases into the reporting net via self-billing. Likewise, zero-rated exports and VAT-exempt supplies are not exempted from reporting – an e-invoice must still be issued for such transactions so that they can be tracked and verified (the law notes that invoices under this system are used to confirm VAT exemption conditions and calculate liabilities). For example, a sale of goods out of BiH (0% VAT) would still require an e-invoice in the platform, and a domestic exempt sale (e.g. certain medical or education services) would need an invoice, unless falling under a specific sector exclusion (see below). [fmf.gov.ba]
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Excluded Transactions/Sectors: The mandate carves out only narrow exceptions. The law exempts certain sensitive sectors and transactions from the e-invoicing requirement. Notably, transactions related to public administration and defense, including compulsory social security (NACE sector O), are excluded. Similarly, in the healthcare and social care sector (NACE Q), if services are provided free of charge (e.g. public healthcare services), they are not subject to e-invoice reporting. Also exempt are the activities of extraterritorial organizations and bodies (e.g. international diplomatic missions). Aside from these sector-based exemptions, virtually all other businesses and transactions are in scope. There is currently no general revenue threshold exemption for small enterprises – even micro-businesses must comply, although special support (free software) will be provided to them (see Section 11). The law also provides specific handling for certain special cases – for instance, it treats things like public transport ticket vending, parking meters, and gambling machines under separate provisions, since those issue tickets/receipts with serial numbers rather than standard invoices. But apart from such niche cases, the expectation is that all B2B, B2C, and B2G invoices – including self-billing situations, chain transactions, etc. – must be processed through the new electronic system. [vatupdate.com] [zenit.ba]
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Self-Billing & Special Scenarios: Self-billing (where the buyer issues the invoice) is explicitly included in the regime. The draft law allows an invoice to be issued not only by the seller or by an authorized third party, but also by the buyer (“samofakturiranje”) in certain cases. In fact, as noted above, if a Federation taxpayer purchases from a person who is not registered with the Tax Administration (for example, an unregistered individual or a foreign entity with no local registration), the buyer is obliged to issue the invoice on the seller’s behalf and report it. This ensures that otherwise “invisible” transactions (like buying goods from a small informal seller) are brought into the official system. Outside of such mandatory cases, self-billing is permitted by agreement – the platform will support buyers issuing e-invoices, though the seller would need to acknowledge them. Triangulation and chain transactions do not receive special treatment in the law; each leg of a transaction chain that involves a taxable person in the Federation must be invoiced and reported as a separate transaction. For example, if goods are sold in a three-party chain (triangulation) and a Federation-based company is intermediate or final in the chain, that company’s purchase and sale each require an e-invoice or fiscal receipt like any other supply. There is no blanket exemption for margin schemes, travel agents, or other special VAT regimes – such transactions are still within scope if the entity is an “obligor of fiscalization.” The e-invoice content and reporting will accommodate any special VAT treatment (e.g. an invoice can indicate a margin scheme or 0% VAT as needed), and the authorities have not signaled any exclusion of these regimes from e-invoicing. In summary, aside from a few public-sector activities, the mandate casts a wide net over all economic transactions, aiming to capture every invoice either from the supplier or via self-billing by the customer. This comprehensive scope aligns with the law’s purpose of closing tax evasion gaps in both the formal and informal economy. [fmf.gov.ba], [fmf.gov.ba] [fmf.gov.ba] [zenit.ba], [zenit.ba]
2. Taxable Persons in Scope – The obligations apply to a broad range of taxable persons (“obveznici fiskalizacije”) established or operating in the Federation of Bosnia-Herzegovina. According to the draft law, the following are considered in scope: [fmf.gov.ba]
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Businesses Established in FBiH: All companies (legal entities) with a seat in the Federation, all registered entrepreneurs/sole traders in the Federation, and even non-profit organizations in the Federation fall under the mandate. In practice, any entity that is required to issue invoices or receipts for its activities in FBiH is an “obligor” of e-invoicing. This includes private companies, public companies, partnerships, sole proprietors, and organizations engaged in economic activities within the Federation. Government administrative bodies themselves are exempt when acting in their sovereign capacity, but if a government department carries out an economic activity outside its core functions, it too would be treated as a taxable person (the law mentions that an administrative authority performing activities beyond its primary mandate is included). [fmf.gov.ba]
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Non-Established Entities Operating in FBiH: The law also covers certain foreign or non-resident entities. If a foreign company or non-resident taxpayer has a taxable presence in the Federation – for example, through a branch, office, or “business unit” located in FBiH – then that local operation must comply with e-invoicing for its transactions. In other words, a business headquartered outside but doing business inside the Federation (via a local branch, outlet, or fixed establishment) is subject to the same rules. Notably, the law’s definition of B2B transactions requiring e-invoices includes cases where the parties have a tax representative in the Federation. This implies that if a foreign entity is VAT-registered in BiH via a fiscal representative, its transactions are treated like domestic ones – e-invoices must be issued for dealings with other local VAT payers. However, a purely foreign-to-foreign transaction with no local establishment would be outside the jurisdiction. Essentially, any entity that is registered or obligated to register with the Federation Tax Administration for invoicing/tax purposes is in scope, regardless of where its headquarters are. [fmf.gov.ba]
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Individuals and Small Businesses: The mandate also reaches certain individuals who engage in business activities. Under the law, even a natural person (individual) who is not formally registered as a business must issue e-invoices if they conduct transactions above a small annual threshold. Specifically, an individual who carries out business transactions on the Federation territory and earns over 5,000 KM (convertible marks) per year from those activities is considered an “obligor” and must comply, even if they don’t have an official company or trade registration. This provision is aimed at the informal sector – for example, a person informally selling goods or services beyond that threshold would be required to issue fiscal invoices and report them. (If they stay below 5,000 KM/year and are truly casual, they remain outside the system.) Apart from that narrow threshold for unregistered individuals, standard small businesses are not exempted by size. There is no general turnover-based exemption for e-invoicing in FBiH as of the new law – all VAT-registered businesses, and even those below the VAT threshold if they are formally registered, will have to follow the e-invoicing rules. The government recognized the burden on micro-businesses and has committed to provide free software tools for small taxpayers to comply (see Section 11 for more on SME support), but it did not exclude them from the mandate. [fmf.gov.ba] [zenit.ba], [sovos.com]
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Exemptions and Special Cases: As noted, certain entities are exempt entirely due to their sector. The law specifies that entities performing public administration, defense, or mandatory social security functions are not considered “obligors” of e-invoicing. Similarly, entities providing healthcare or social services without charging a fee are exempt (e.g. a public hospital providing free treatment wouldn’t issue fiscal invoices). Also likely exempt are diplomatic and international organizations by virtue of “extraterritorial” status. These carve-outs mean such bodies do not have to implement e-invoicing for their activities. Additionally, the law enumerates some cases (like certain ticket sales or gambling machines) where the standard definition of “electronic fiscal system” doesn’t apply – those may use alternate reporting mechanisms. Outside these categories, most taxable persons are within scope. There is no opt-out except not meeting the criteria of doing business in FBiH. However, voluntary participation is possible for those not strictly required: for instance, a small individual seller below the threshold could choose to use the system for transparency, or companies in Republika Srpska (the other entity of BiH) are not covered by this Federation law but could voluntarily align if they operate across the country. (Note: The Federation’s law does not automatically cover Republika Srpska or Brčko District, which may need their own legislation. As of now, the mandate discussed is exclusive to the Federation of BiH, so businesses only in RS are not yet obliged under this law.) In summary, all businesses and persons engaged in taxable economic activity in the Federation – whether local or foreign-established – are in scope unless they fall under a narrow sector exemption. [banqup.com] [banqup.com], [vatupdate.com]
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Optional/Phased Participation: During the development phase (2024–2025), use of e-invoicing in BiH was voluntary. Prior to the mandate, e-invoices were allowed but not mandatory for any transaction type. Taxpayers could exchange electronic invoices on a voluntary basis (with mutual agreement) under existing rules, but there was no central reporting. With the new law’s rollout, voluntary early adoption is encouraged: there was a public consultation and pilot period in 2025 where businesses could prepare for the new system. However, once the system goes live, participation will no longer be optional for in-scope taxpayers – it will be a legal obligation. The draft law does not propose a staggered rollout by company size or sector (unlike some countries that phase in large taxpayers first); instead, the plan is for a universal mandatory start date (with only the sector exemptions noted above). Different transaction categories (B2G, B2B, B2C) are all covered from the outset of mandate, rather than a phased expansion. That said, the enforcement approach may initially be lenient (see Section 3 and 9): the authorities might grant a short grace or learning period once it’s mandatory, although this is not explicitly codified yet. [ey.com] [sovos.com] [edicomgroup.com]
3. Implementation Timeline – The e-invoicing and e-reporting mandate in BiH is moving through a multi-stage implementation timeline. As of early 2026, the Federation’s law has just been approved by the parliament, and plans for mandatory rollout are imminent. Below is the chronology of key milestones and the expected go-live schedule: [sovos.com], [biznis.ba]
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Drafting and Proposal (2024): On 12 November 2024, the Federation of BiH published the Draft Law on Fiscalization of Financial Transactions (the legislative proposal for mandatory e-invoicing). This draft law was the result of extensive analysis of the existing fiscal cash register system and consultation with stakeholders during 2024. The publication of the draft marked the start of the formal legislative process and public discussion. Shortly after, on 17 December 2024, the draft law was accepted by the House of Representatives (the lower house of the Federation’s Parliament), indicating strong initial support. A public hearing phase opened in January 2025 to gather feedback and refine the law. [sovos.com] [zenit.ba], [zenit.ba]
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Legislative Approval (2025–Jan 2026): Through 2025, the law progressed through required approvals. On 18 November 2025, the Government of FBiH (the Federation’s cabinet) adopted the refined draft law and submitted it for final parliamentary procedure. Finally, in January 2026, the Parliament of the Federation gave full approval. The House of Representatives passed the law on 20 January 2026, and the House of Peoples (upper house) followed on 23 January 2026. This bicameral approval means the legislation has been adopted. (Notably, the upper house vote on 23 Jan 2026 was 43 for, 16 against, 3 abstentions, indicating some debate but ultimately a clear majority in favor.) The law is expected to be published in the Federation’s Official Gazette and enter into force shortly thereafter in 2026. [sovos.com] [biznis.ba]
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Bylaws and Technical Preparation (Q1–Q3 2026): After the law’s adoption, the Ministry of Finance and Tax Administration will issue secondary legislation and technical specifications to implement it. The draft law itself noted that implementation timelines and detailed rules would come via bylaws. It’s anticipated that in the months following adoption, authorities will finalize the technical platform (CPF and EFS infrastructure), accredit software providers, and open the system for taxpayer onboarding. A pilot or voluntary test phase may take place during 2025–2026, although formal voluntary phase details have not been widely published. (Since the legal mandate was not active in 2025, any e-invoicing was essentially voluntary during that year.) We can expect late 2025 and much of 2026 to focus on building and testing the e-invoicing portal, training users, and allowing businesses to register their systems/operators with the Tax Administration. The law requires, for example, that businesses register each invoice-issuing operator with the tax authority at least 24 hours before they start issuing invoices – such procedural steps will be fleshed out in early 2026 guidelines. [vatupdate.com], [fiscal-req…ements.com] [ey.com]
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Mandatory Go-Live Date: The initial target for mandatory e-invoicing to begin was 1 January 2026. This date was proposed in early planning documents. However, given the law was only just passed in Jan 2026, it’s likely the mandatory go-live will be in late 2026 or by 1 January 2027. In fact, the roadmap discussed by regulators has mentioned a full transition by 1 January 2027. One scenario is a phased enforcement: e-invoicing could officially become mandatory during 2026 (perhaps in mid or late 2026 once the system is ready), and a grace period through the end of 2026 would allow businesses to adjust, with paper invoices completely eliminated by 1 Jan 2027. Sovos, for instance, notes that the mandate is expected to “begin on 1 January 2027, although official timelines have not yet been announced”, reflecting that planners see 2026 as a transition period. Now that the law is approved, we await an official start date from the government. It is possible that certain segments (like large taxpayers or B2G) could be encouraged or required to start a few months earlier as a pilot, but as of now the most cited timeline is: mandatory e-invoicing in 2026 with full coverage in 2027. The Federation’s finance authorities will likely communicate specific dates in the coming weeks. [sovos.com], [sovos.com] [sovos.com]
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Grace Periods and Sectoral Timing: The law itself does not explicitly mention a “grace period” or staggered dates by sector, but such measures often accompany enforcement in practice. If the mandate begins in mid-2026, the authorities may announce that penalties will not be applied for minor non-compliance during an initial grace period (e.g. the first 3–6 months) to give everyone time to adapt. (For example, when Belgium introduced B2B e-invoicing, they allowed a 3-month penalty-free transition – BiH could consider something similar.) Also, if any differentiation by transaction type occurs, it might be that B2G e-invoicing becomes compulsory slightly before B2B, as public sector projects often lead (but in FBiH’s case, B2G and B2B are bundled together in the law). There is no indication of different dates for B2C vs B2B; the system for both is supposed to kick in simultaneously, since the current fiscal cash register system (for B2C) will be replaced by the new EFS at the same time B2B goes electronic. One internal timeline had 1 January 2026 for B2B/B2G mandatory start, and 1 January 2027 for mandatory e-invoices even for those not yet in 2026 (possibly implying smaller businesses could take until 2027). Until official confirmation, businesses should plan for mandate enforcement sometime in 2026, with full compliance required by 2027 at the latest. [ey.com] [sovos.com] [vatcalc.com]
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Future Developments: After the system goes live, continuous monitoring and possible adjustments will occur. The law mandates that all necessary implementing rulebooks be issued within a certain timeframe (likely within 6 months of the law). Looking ahead, Bosnia and Herzegovina’s e-invoicing framework aligns with the wider European trend toward digital VAT reporting (e.g. the EU’s “VAT in the Digital Age” initiative targeting 2028–2030). By establishing this system now, BiH positions itself to potentially integrate with EU systems if it moves toward EU accession. Key upcoming dates to watch will be the official publication of the law (expected early 2026), the announcement of the exact mandatory date (likely specified by the Ministry in 2026), and the issuance of technical regulations (possibly by mid-2026). Companies should also be mindful of any pilot or sandbox periods announced – even if not formally labeled as such, Q3/Q4 2025 was effectively a preparatory phase, and early 2026 may continue as a ramp-up phase before strict enforcement. [vatcalc.com]
In summary, the legislative groundwork was completed by January 2026. The mandate is anticipated to become operational in 2026, with the final cutoff for full compliance by the start of 2027. Businesses in FBiH should prepare immediately, as the transition from voluntary to mandatory is imminent after the law’s official promulgation. [biznis.ba] [sovos.com]
4. Technical & Functional Requirements – The new system imposes specific technical standards on invoices and a structured workflow for reporting. Electronic invoices must meet format and content requirements, be transmitted through approved systems, and include security features to ensure authenticity. Key technical and functional requirements include:
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Structured E-Invoice Format (EN-compliant): All invoices must be issued in a structured electronic format that complies with European standards (EN 16931). The law explicitly aligns with EU Directive 2014/55/EU on e-invoicing in public procurement, effectively adopting the same definition of an e-invoice. This means the invoice data should be in a machine-readable format (such as XML or JSON based on UBL 2.1 or a similar schema). The content must allow automatic processing without manual intervention. Practically, we can expect the format to be either a local XML schema modeled on the European Norm or even the PEPPOL BIS standard (though Bosnia is not using the decentralized PEPPOL network, the data model will be interoperable). UBL 2.1 XML is likely, given regional practices and the emphasis on EU compatibility. Each e-invoice will contain all the fields mandated by the law for fiscal invoices. The mandatory data elements include typical invoice information: supplier and buyer identifiers (tax ID, name, address), date and time of issuance, invoice number, a description and quantity of each item/service, unit prices, applicable tax rates and amounts, total amount, etc.. The law provides detailed lists of required elements for both e-invoices and fiscal receipts; they largely mirror standard VAT invoice requirements with some additions like location codes and operator codes for tracking who issued the invoice. Invoices for B2B/B2G are termed “e-faktura” and must contain all these details, while B2C receipts (“fiskalni račun”) have a subset of similar details and are labeled as such. In essence, an e-invoice must carry all information needed for VAT and tax control purposes so that the Tax Administration can audit it electronically. [sovos.com], [edicomgroup.com] [fmf.gov.ba] [edicomgroup.com]
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Central Platform & Real-Time Clearance: Bosnia and Herzegovina is implementing a centralized clearance model – a form of Continuous Transaction Control (CTC). All e-invoices in B2B and B2G must be transmitted to the Central Platform for Fiscalisation (CPF), a government-managed portal, for verification and approval in real time. When an invoice is issued, the EFS (Electronic Fiscal System) software will automatically send the invoice data to the CPF via a secure API/internet connection. The CPF performs validation checks (format correctness, arithmetic consistency, verification of issuer and buyer IDs, etc.) and then assigns a unique “Verification Number” (VBR) to the invoice if all checks pass. Only after the CPF returns this verification code is the invoice considered fiscally valid. This effectively means invoices are “cleared” by the tax authority in real time before (or at the moment) they reach the buyer. According to the draft law, the VBR (verification number) is an unique alphanumeric code generated by the central platform for each invoice once it is authenticated. That code must be included on the invoice (and typically appears as a barcode/QR as well) for the buyer to see. In addition, the system uses a second code: SBR (security number) generated by the issuer’s system, which links the invoice to the issuer (this could be produced by a security module/digital signature device on the seller’s side). Together, these ensure each invoice is traceable and tamper-proof. [vatcalc.com] [fmf.gov.ba], [fmf.gov.ba] [fmf.gov.ba] [vatcalc.com], [vatcalc.com]
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Digital Signature and Security: Every e-invoice must be digitally signed to guarantee its authenticity and integrity. The law references the use of an electronic signature and certificate as per Bosnia’s e-signature regulations. In practice, the EFS software or device used by the taxpayer will apply a digital signature or seal to the invoice data before or during transmission. The security module (SM) in the EFS ensures that each invoice is signed and that any alteration would break the signature. This signature, combined with the VBR from the authority, provides a dual layer of security. It guarantees that the invoice originated from the declared issuer and was not changed en route, and that the tax authority has seen and approved it. Integrity controls are paramount: the law requires that digital records of transactions be stored unchanged and linked sequentially to detect any gaps. The QR code or unique number on each invoice allows quick verification – a buyer or inspector can scan the code and query the central system to confirm that the invoice is registered and not forged. These technical measures mean that the system can automatically detect duplicates or manipulations (for instance, an invoice without a valid VBR or signature will be invalid). [edicomgroup.com], [sovos.com] [fmf.gov.ba] [edicomgroup.com]
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E-Reporting Data and Fields: Because this is a comprehensive system, “e-reporting” is essentially achieved by the e-invoice itself. The invoice data transmitted covers all needed information for tax reporting. There isn’t a separate summary report to file for each invoice; instead, each invoice’s data packet is the report. For B2C receipts, the data is slightly simplified but still includes items, time, and tax breakdown. The Tax Administration’s system will aggregate these into reports (e.g. sales ledgers, VAT listings). The law even mandates that the CPF automatically generates a sales and purchase ledger for each taxpayer from the invoices submitted. That means the system will compile all issued (sales) invoices and all received (purchase) invoices for a business. This hints at future pre-filled VAT return functionality (see Section 10). Validation rules are built into the platform: if required fields are missing or in the wrong format, the invoice will be rejected and not get a VBR. The issuer must then correct and re-send. If a mistake is detected (e.g. buyer’s tax ID invalid), the platform will notify the issuer (and possibly the buyer) to fix it. Both parties are obliged to rectify errors within 24 hours so that the invoice can be properly re-submitted. The system handles credit notes and invoice cancellations as well – a “korektivni račun” (corrective invoice) must be issued electronically and will be linked to the original invoice in the platform, following specific rules, and failure to do so correctly is an offense.
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Real-Time vs Near-Real-Time: The requirement is essentially real-time (or near-real-time) reporting. The law stipulates that an invoice must be issued and reported at the moment the transaction occurs or payment is made. For B2B transactions that are paid cashless, an e-invoice must be sent and received through the system (and accepted by the buyer) as part of the process. For retail (cash) transactions, the data is sent immediately as the receipt is generated. Deadlines: There is no grace of several days to report; it is concurrent with invoice issuance. In practice, this happens in seconds via the online connection. Only in exceptional cases (like internet outage) will delayed transmission be allowed – presumably the system will queue the data and require sending as soon as connectivity is restored. The law provides that if a taxpayer cannot use the CPF “for justified reasons,” there will be an exceptional procedure, likely meaning they can issue in offline mode and later upload, but specifics will come in bylaws. Generally, “T+0” reporting is mandated – i.e. immediate. There is no monthly summary report for invoices needed, because each invoice is individually reported. (However, note that VAT returns are still monthly – the e-invoicing system will populate the monthly totals, see Section 10. Taxpayers are required to log in by the 10th of each month to review the prior month’s auto-generated sales/purchase books in the system and make any necessary adjustments. This effectively serves as a monthly reconciliation step but not a separate report submission.)
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Data Exchange and Buyer Functions: The CPF platform is not just a one-way reporting tool; it also facilitates exchange of invoices between supplier and buyer. For B2B and B2G, the platform will deliver the e-invoice to the buyer’s account after clearance. Buyers can log in to retrieve and view their incoming invoices. The system allows the buyer to review and even pay the invoice through the platform in the future. (This suggests integration with payment services or at least a confirmation mechanism – a modern feature aimed at streamlining the whole invoice-to-pay cycle.) Buyers are likely required to “accept” or acknowledge B2B invoices on the platform (similar to Italy’s SDI or Serbia’s SEF, where the buyer can approve or reject an invoice). If a buyer finds an error, they might reject it, prompting the seller to correct and resend. For B2C, since the “buyer” is a consumer, there is no formal acceptance step; instead the consumer gets a receipt (often printed or electronic) with a QR code. Consumers and tax inspectors can use that QR or invoice number to verify within 60 days that the receipt is indeed recorded in the system. This empowers consumers to report if they find their receipt isn’t in the system (combatting seller’s non-reporting). [sovos.com], [vatcalc.com] [vatcalc.com], [edicomgroup.com]
In summary, the technical model is a centralized, real-time invoicing system requiring structured e-invoices, digital signatures, and clearance codes. Mandatory data fields cover all necessary tax info, validation rules are enforced by the platform at the time of issuance, and security features (signatures, unique codes, QR) are in place to ensure authenticity. Integrity and auditability are ensured through secure archiving and cross-checks (the Tax Administration cross-checks sales vs purchases across taxpayers to detect evasion). The system is designed to be robust and in line with international e-invoicing standards, making Bosnian e-invoices interoperable with global systems from a format perspective, even though the exchange is via a national platform. [edicomgroup.com] [zenit.ba]
5. Transmission & Workflow – The flow of invoices and reports in the new system can be described as a central clearing process. Here’s how e-invoices and e-reports are transmitted to the authorities and exchanged between trading parties, including any deadlines:
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Central Clearance Platform (CPF): The Central Platform for Fiscalisation (CPF) is the heart of the system. All invoices in digital form must be sent to the CPF, operated by the Federation Tax Administration, for clearance. B2B and B2G invoices: The supplier’s software will transmit the e-invoice to the CPF, which validates it and returns a verification number (and presumably forwards the invoice to the buyer’s side on the platform). B2C receipts: The point-of-sale device or software (EFS) will send a fiscal receipt record to the CPF at the moment of issuance; the CPF records it and can issue its own code (in practice B2C receipts might already include a pre-assigned code from the device, but the device must later sync with CPF). In both cases, the Tax Authority receives the invoice data in real-time. This model is often called “clearance e-invoicing”, where the invoice is cleared by the authority before finalization. [vatcalc.com] [sovos.com], [vatcalc.com]
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Electronic Fiscal Systems (EFS): Instead of allowing any arbitrary method of sending data, the law mandates use of approved Electronic Fiscal Systems (EFS) by taxpayers. An EFS can be software, hardware, or a combination that is certified to issue invoices and connect to the CPF. There are two main types: one aimed at fiscal receipts (cash register software/devices) and one for e-invoices (B2B issuance). Taxpayers can implement an integrated solution that covers both. Examples of EFS include a classic fiscal cash register, a POS application on a computer or tablet, an ERP or accounting system module that is adapted for Bosnian e-invoicing, or a cloud-based invoicing service, as long as it meets the technical criteria. Each EFS will undergo a certification process (by authorized evaluators or the Ministry) to ensure it respects data security, uses the required digital signature module, and communicates with CPF properly. Accredited service providers and software vendors will play a role – businesses may either build their own solution and get it approved or purchase a ready-made certified software from a provider (many international e-invoicing providers are following these developments). The law even requires that vendors of EFS have a support network throughout the Federation and that they are tax-compliant themselves. This is to ensure taxpayers can maintain their systems. [vatcalc.com], [edicomgroup.com] [fmf.gov.ba], [fmf.gov.ba] [fmf.gov.ba] [comarch.com]
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Transmission Channels: Communication with the CPF is expected to be via APIs over the internet. The law describes the EFS communicating over a secure data connection (likely HTTPS with client authentication). There is no mention of using an EDI network or email for official transmission – everything funnels through the centralized API. The system is online/connected: each invoice event triggers a message to the CPF and a response. For B2G transactions, Bosnia already had to accept e-invoices (due to EU Directive compliance) in public procurement – these were likely via email or portal in the past. Now, B2G e-invoices will also route through the CPF, meaning suppliers to government will submit invoices on the same platform. There is no indication of adopting PEPPOL as the transport; instead it’s a country-specific platform. However, ensuring interoperability is a goal: the format is EN-compliant, and international companies can interface via APIs. Intermediary service providers (like clearance outsourcing firms or VANs) could integrate on behalf of clients as long as the end result is data to the CPF. But unlike decentralized models, here all roads lead to the Tax Authority’s system. [fmf.gov.ba], [fmf.gov.ba] [sovos.com]
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Workflow for B2B Invoices: When a company issues an invoice to another business:
- The issuer generates the invoice in their EFS (populating all required fields).
- The EFS digitally signs the invoice and sends it immediately to the CPF for clearance. [edicomgroup.com]
- The CPF system checks the invoice. If valid, it registers it and generates the Verification Number (VBR), which is returned. The CPF likely also creates a QR code or simply stores the data for later verification. [edicomgroup.com]
- The CPF then makes the invoice available to the buyer. The buyer (if also registered on the platform) receives a notification or can fetch the invoice in their account. (If the buyer is also in FBiH, they are expected to receive it via CPF rather than separately by email – though they might also get a PDF copy for convenience.) [vatcalc.com]
- The buyer can accept or dispute the invoice on the platform. If accepted (or by default after a period), it becomes finalized for both parties in the system.
- Both seller and buyer can download or print a human-readable version (PDF) with the QR code if needed, but that paper is just a copy; the electronic record is the official one. [fmf.gov.ba]
- The invoice now appears in the seller’s “sales book” and the buyer’s “purchase book” on the portal. Tax authorities have the data for VAT auditing.
Deadlines: This happens in real-time. The law effectively requires that cashless B2B transactions must use an e-invoice and that the e-invoice must be issued, sent, and accepted at the time of the transaction (it says an e-invoice “must be issued, sent and accepted” for B2B where payment is or will be non-cash). So the expectation is instantaneous or at least same-day transmission. There isn’t a concept of “send next day” – if the system or internet is down, there will likely be emergency procedures, but under normal circumstances it’s immediate. -
Workflow for B2C Transactions: In a retail scenario:
- The seller (e.g. a shop) uses a certified cash register or POS software (EFS). At sale, it generates a fiscal receipt which includes all the key data (items, price, tax, etc.) and a provisional unique receipt ID.
- The device/software contacts the CPF (either in real-time for each receipt or batch in very short intervals) and uploads the receipt data.
- The CPF registers it and returns a verification code if applicable (in some models, the device might pre-generate a security code and the CPF just validates and stores the info).
- The customer gets the receipt with a QR code or verification number on it. For example, a receipt might print with “Verification Code: XYZ123…”.
- The receipt is now stored in Tax Admin’s database. A consumer (within 60 days) or inspector can scan the QR to check it. If they scan and the system says “not found,” that indicates the seller failed to report it, which is an offense.
Deadlines: Here it is essentially instantaneous (real-time) as well. Bosnia already had a fiscal cash register regime since 2010 where devices had to record and often send data via periodic uploads. The new system likely tightens this to immediate online transmission. However, practical operation might allow that if internet is temporarily unavailable, the device stores receipts and sends them when the connection is restored. In any case, daily reporting is the minimum; one cannot wait more than very briefly to transmit a retail transaction. There is no monthly or weekly reporting delay – it’s continuous or at least end-of-day at the latest. [fbihvlada.gov.ba] -
Alternative Channels (if any): The default channel is the online portal/API. There may be a web interface on the CPF for manual entry of invoices for the smallest businesses or in contingency. For example, if a small taxpayer doesn’t use an ERP, they might log into a web portal to create invoices one by one, and that portal itself is an EFS provided by the Tax Authority (indeed, the government plans to provide free applications for small taxpayers, which likely includes a basic invoicing web app). In case of system outages, the law will have procedures: e.g., if CPF is down, invoices might be issued and marked as “pending clearance” and then sent when CPF is up (the law mentions exceptional cases where the taxpayer can’t use CPF and later must report once able). But the business must then send those within a prescribed short timeframe. There’s also mention that if an invoice can’t get a VBR due to outage, the customer can later verify it directly with Tax Administration by other means within 60 days, implying there is a backup verification path. [zenit.ba]
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Deadlines Summary: Real-time is the norm. Unlike some systems that allow T+1 or T+5 days for reporting, FBiH’s model is a transactional, immediate reporting. No separate monthly summary of invoices is required (since every invoice is already in the system). However, one element of periodic reporting is that by the 10th of each month, taxpayers are supposed to log in and review the auto-generated ledgers and confirm or correct any data. This ensures any missing purchase invoices (like if a foreign supplier’s invoice wasn’t self-billed properly) can be added, or any mistakes can be addressed in time for the VAT return. But this monthly activity is more an internal check than a report submission.
In conclusion, the transmission workflow is highly automated and centralized. Invoices/receipts flow from the seller’s system to the Tax Authority’s platform in real-time, and then to the buyer. The CPF acts as both a clearinghouse and an invoice delivery network. Security and deadlines are strict – essentially simultaneous with the transaction. The design follows the “clearance” approach similar to countries like Italy, Turkey, and Serbia, which has proven effective in closing VAT gaps. Businesses will need to have an internet-connected, certified invoicing solution at all points of sale and for billing departments, and adhere to the immediate reporting requirement to avoid penalties. [vatcalc.com]
6. Self-Billing – Self-billing (samo-fakturiranje) is expressly permitted and regulated under the new framework. Yes, self-billing is allowed – and in certain cases required – and such invoices must also go through the e-invoicing platform with the same requirements. Key points regarding self-billing in the BiH system:
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Allowance for Self-Billing: The law states that an invoice may be issued not only by the supplier or an authorized third party, but also by the customer (buyer) in the name and on behalf of the supplier. When the buyer issues the invoice, this is considered “self-invoicing.” The law’s Section on “Samofakturisanje” spells out scenarios and obligations for this practice. This aligns with common VAT practice where self-billing is allowed given prior agreement; Bosnia is incorporating that into the e-invoicing regime. [fmf.gov.ba]
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Mandatory Self-Billing in Specific Cases: The law actually mandates self-billing in certain transactions. Specifically, if a buyer (taxable person) in FBiH purchases goods, services, or assets from a person who is not registered as a taxpayer with the Tax Administration, then the buyer is obliged to issue the invoice on the seller’s behalf. In other words, if the supplier is someone who cannot or does not issue a fiscal invoice (because they aren’t in the system) – for example, a farmer or small trader not registered for tax, or a foreign company with no local registration – the buyer must self-generate an invoice for that purchase and report it via the platform. The law requires that this self-issued invoice contains all the same information and is issued at the time of the transaction. (It even notes an exception to Article 9 timing – meaning even if VAT law would consider tax due later, the invoice in such case must be issued immediately at delivery by the buyer.) This ensures no transaction goes unreported due to the seller’s status; the buyer effectively fulfills the fiscalization duty. [fmf.gov.ba]
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Consent and Conditions: For voluntary self-billing arrangements (where it’s not mandated by law but two parties agree the buyer will issue invoices to streamline process), it’s expected that both parties must agree in writing. While the law text we have doesn’t elaborate on the consent process, typically VAT rules require a self-billing agreement. The draft mentions that the “consent” for using an e-invoice can be given in writing or via the platform, possibly encompassing an agreement for self-billing or for receiving e-invoices. So, a buyer and seller could have a standing agreement that the buyer will issue the invoices (common in certain industries). In such case, the buyer’s EFS would create the invoice, submit it to CPF (with the roles clearly indicated – buyer as issuer on behalf of supplier), and the supplier would likely get a copy through the system as the counterparty.
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Platform Workflow for Self-Billed Invoices: A self-billed invoice will go through the same CPF clearance process. The difference is in the roles: the “issuer” field will actually be the buyer (self-biller) acting for the supplier. The law defines that the buyer must include all legally required data of both parties and then treat it as if the supplier issued it. The CPF will assign a verification code just like any other invoice. The invoice will then appear in the supplier’s ledger as a sale and the buyer’s ledger as a purchase automatically (since the platform knows the parties’ IDs). There may need to be an indication that it was self-billed, but functionally it’s just another e-invoice in the system. Buyers issuing self-billed invoices must follow all content rules – e.g. numbering, timing, etc., which likely means they need a series for those invoices. [fmf.gov.ba]
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Buyer-side Validation/Approval: In the case of self-billing, the traditional roles invert – the buyer (issuer) obviously “approves” the invoice by creating it, and the supplier would need to accept it. The platform likely will notify the supplier (like “Your customer X has issued you an invoice number Y”). The supplier should then verify it’s correct. Since the law requires either prior agreement or at least provides that if the supplier also later issues an invoice it’s not needed if CPF one exists, it suggests the self-billed invoice stands as the official invoice once in CPF. If the supplier disagreed (say the amounts are wrong), they would presumably work with the buyer to adjust it (possibly via a credit/debit note). The system doesn’t explicitly detail this, but normal commercial practice would apply. [fmf.gov.ba], [fmf.gov.ba]
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Content Rules for Self-Billing: The invoice generated by the buyer must meet all the usual mandatory content requirements. It must clearly identify both parties (including the supplier’s tax ID even if the supplier isn’t registered for VAT – perhaps “N/A” if truly not a taxpayer, but still identification like name/address). It will include the date, details of the supply, etc. The law ensures that such an invoice can be used to claim input VAT or tax deductions by the buyer and to account for any tax by the supplier (if needed), just as a normal invoice. So self-billed invoices have full legal weight. [fmf.gov.ba]
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Passing Through the Platform: Yes, self-billed invoices must be reported through the e-invoicing platform just like any other. The buyer’s EFS will send it to CPF, get it cleared, and then both parties have it on record. There is no loophole to avoid the platform; even though the supplier didn’t issue it, the invoice still lives in the system because the buyer put it there.
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Notifications/Obligations: The law likely requires that if a buyer is self-billing, the supplier should not also issue an invoice (to avoid duplicates). In fact, Article 20(2) says if the supplier does issue an invoice through CPF, then the buyer does not issue one. This prevents double billing. So either the supplier or buyer will issue, not both. For mandated cases (unregistered seller), the burden falls on buyer by law. For voluntary self-billing, an agreement would stipulate the supplier will not issue invoices. Additionally, the buyer likely must mark on the invoice that it’s self-billed (some systems add a note “Self-billing: invoice issued by buyer”). [fmf.gov.ba]
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Restrictions or Special Cases: There do not appear to be restrictions on self-billing beyond requiring the data be in the system. One interesting point: failure to perform required self-billing is a serious offense. The law’s penalty section lists as a grave violation if a company “does not perform self-invoicing according to Article 20” when it should. This underscores that when the law says the buyer must self-bill (as in purchases from unregistered persons), the authorities expect compliance – if a buyer were to just purchase from an unregistered supplier and not issue an invoice, they can be fined (see Section 9). There might also be an obligation to notify the supplier or have an agreement in voluntary cases, but those are likely handled by the existence of a contract or prolonged relationship.
In summary, Bosnia’s e-invoicing system fully accommodates self-billing. Self-billed invoices go through the same clearance and archiving process, and they are treated as equivalent to supplier-issued invoices. The regime not only allows self-billing with mutual consent, but in some scenarios requires it to ensure no gap in transaction reporting. Businesses engaging in self-billing must adhere to the platform’s procedures: the buyer becomes the invoice issuer in the CPF and must follow all technical requirements. Buyers and sellers should have clear agreements if using self-billing, but once agreed, the e-platform will handle those invoices like any other, with both parties receiving the official cleared invoice data. [fmf.gov.ba], [fmf.gov.ba]
7. Triangulation & Special Scenarios – The new framework does not carve out separate processes for complex transaction scenarios like triangulation or chain transactions; instead, it folds them into the standard e-invoicing requirements. Each transaction that occurs on Federation territory must be documented by an e-invoice or fiscal receipt, even if it’s part of a larger chain or special VAT treatment. Here’s how various special scenarios are handled:
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Triangulation Transactions: Triangulation usually refers to a three-party cross-border transaction (common in EU VAT: A sells to B, B sells to C, goods go from A to C). Since BiH is outside the EU VAT system, the exact “triangulation simplification” doesn’t apply as it does in the EU. However, Bosnian companies could be involved in multi-party supply chains. Under this law, there is no exception for triangulation – a Bosnian (FBiH) company involved must still issue and report invoices for any sale it makes and likewise account for any purchase. For example, if a company in FBiH buys goods from company A abroad and immediately resells to company C abroad (goods never stay in BiH), this is effectively two cross-border transactions for the FBiH company: an import (likely with no local VAT since goods didn’t enter consumption) and an export. The FBiH company would still need to comply: it would self-bill the import from A (since A isn’t registered locally) to have a purchase invoice on record, and it would issue an e-invoice for the sale to C (even though C is abroad, the FBiH company “can issue and send e-invoices” for exports). Those invoices get reported like any other – one as a self-billed purchase, one as a zero-rated export sale. The system does not link them automatically as a single triangulation deal; they are treated as two reported transactions. In a purely domestic triangulation (say three domestic parties in a chain), each link is just a normal domestic sale which will have an e-invoice. There is no special simplification or skipping of invoices – every charge between legal entities triggers an invoice requirement. [fmf.gov.ba] [zenit.ba]
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Chain Transactions: Similar to triangulation, any multi-step chain transaction (where goods or services pass through multiple entities) must be documented at each step. The law requires “each transaction must be documented by an invoice or receipt”. So if X sells to Y who sells to Z, X->Y and Y->Z are two transactions, each needing an e-invoice in the system (assuming Y and/or Z are in FBiH). The platform doesn’t provide a consolidated “chain document” – it will simply have two separate invoices recorded (one from X to Y, one from Y to Z). Triangular or chain scenarios are effectively handled by ensuring each taxable person’s involvement is covered by an invoice in the system. There’s no exemption just because it’s a pass-through. The law does not mention any special code for “triangulation” – likely not, since those are EU VAT jargon. [zenit.ba]
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Cross-Border Reverse Charge Scenarios: In VAT terms, a reverse charge typically occurs on services or certain goods where the buyer accounts for VAT. For BiH, if a FBiH company buys a service from abroad (e.g., software from a UK company), the VAT law might require the local company to self-account for VAT. Under this e-invoicing law, that scenario is covered by the self-billing requirement: the FBiH buyer would issue themselves an invoice on behalf of the foreign provider. That self-billed invoice serves as the documentation for the purchase and would be reported to the Tax Administration. It ensures the tax authority sees the transaction for potentially assessing reverse-charge VAT. Similarly, if a FBiH company sells a service to a foreign customer (which would be zero-rated export of service), they still must issue a proper e-invoice (structured format, etc.) – the law allows issuance of e-invoices for services to non-residents, so the local company would likely do so (though whether it’s mandatory or optional for exports is slightly ambiguous – the draft said “the taxpayer can issue e-invoices… in case of export or service to non-resident”, implying it’s allowed; however, since all transactions should be reported, in practice they will want those exports reported too for a complete audit trail). [fmf.gov.ba]
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Zero-Rated and Exempt Supplies: Zero-rated supplies (exports) and VAT-exempt supplies are still required to be invoiced and reported. Nothing in the law exempts them from the e-invoicing mandate. In fact, one of the purposes of the system is to precisely measure the VAT collected and also identify transactions that are not taxed (exempt or zero-rated). The invoice format includes fields for specifying tax rates – one of which could be 0% or “exempt” for certain items. For example, if a company sells medicaments at 0% VAT or an education service that is VAT exempt, it must still issue an e-invoice to the customer and report it. The data will show zero VAT, but the Tax Administration will see that sale and know why no VAT (the invoice can indicate the VAT category). The law explicitly notes that invoices issued under it can be used to check eligibility for tax exemptions or obligations – meaning, for instance, an invoice for an export is proof for VAT exemption on that export. So the system integrates those scenarios. No special treatment is given to margin schemes (like second-hand goods) or travel agent scheme in the law text; presumably those sales also require invoices and the invoice would just not show VAT (margin schemes often show no VAT on invoice by law, but invoice is still needed). The tax authority can later ask for additional info if needed, but the transaction itself must be reported. [zenit.ba], [zenit.ba] [fmf.gov.ba]
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Special VAT Regimes: If a taxpayer operates under a special VAT regime (say a small business regime, or a flat-rate farmer, etc.), they are not exempt from e-reporting unless they fall outside the obligor definition. As of now, FBiH does not have a broad small-business VAT exclusion except the VAT registration threshold which is state-level (if a business is below the threshold and not VAT-registered, they might still be issuing fiscal receipts if they sell to consumers – and indeed the law covers them if revenue > 5,000 KM as an individual). So essentially, even taxpayers under special schemes have to use the system. For example, a travel agency issuing invoices for travel packages (some of which might be under the margin scheme) will still issue e-invoices to clients; they would just need to reflect the pricing appropriately. The system doesn’t need to know the margin separately – it reports the sale value, and the agency will handle VAT internally per the scheme.
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Local Nuances: The Federation’s approach is rooted in their existing fiscalization system. Previously, since 2010, businesses had to use fiscal cash registers for cash sales, but invoicing for B2B was largely paper/electronic without real-time reporting. The new system unifies these. It also considers scenarios like: [fbihvlada.gov.ba]
- Invoices in foreign languages/currencies: The law says if an invoice is issued in a foreign language, the Tax Administration can request a translation for audit. And presumably, amounts in foreign currency would be allowed but maybe require showing BAM equivalent for tax records. [fmf.gov.ba]
- Special outlets: The law provides lists of devices not considered EFS (parking meters, vending machines, etc.), suggesting those may continue with their own kind of receipts and periodic reporting. But for the most part, any point of sale to an end-consumer will be equipped with an EFS or fiscal device that reports in real-time. [fmf.gov.ba]
- Services without monetary payment: If a service is provided free (like within the exempt sectors or say a promotion), no invoice required if truly no charge. But if there’s a barter or in-kind exchange, presumably an invoice still needed for the value (subject to VAT if applicable). The law didn’t directly speak on barter, but general VAT rules would apply.
In essence, the e-invoicing regime applies broadly to all transactions, even complex ones, ensuring each link is captured. There are no explicit special rules to skip or merge invoices for chain transactions – a company in the middle of a chain must issue an invoice to its customer and possibly self-bill its supplier if that supplier didn’t invoice within the system. The platform doesn’t treat triangulations differently; it will just show multiple invoices that, from a human perspective, form a chain. Tax authorities can analyze the data to see the flow (they may cross-reference that Company B’s purchase from A corresponds to B’s sale to C, etc., to detect any discrepancies). But from the taxpayer’s perspective, they just follow the normal procedure for every sale or purchase.
Bottom line: Special scenarios like triangulation, consignment sales, drop shipments, margin scheme sales, etc., do not exempt one from e-invoicing. Every accountable transaction must have an invoice or receipt in the system. Taxpayers should handle these scenarios by issuing the proper invoices (or self-invoices) just as they would in a paper system, now using the electronic platform. If any clarifications are needed (for example, how to denote a margin scheme invoice), those will likely come in the bylaws or technical instructions, but no carve-outs relieve them from the mandate. [zenit.ba]
8. Archiving & Retention – The law introduces specific requirements for the archiving and retention of invoices and transaction data in the electronic system. Both taxpayers and the Tax Administration have duties to ensure data is stored securely and remains accessible for audits. Key points include:
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Retention Period: Invoices must be retained for at least the period required by tax law – effectively at least 10 years, and the Tax Administration will keep them for 11 years. The draft law defers to existing laws for taxpayers’ retention obligation: a taxpayer must keep invoices “in accordance with the deadlines prescribed by the VAT law or the Federation’s accounting law”. Under BiH VAT regulations, businesses generally must keep VAT records (including invoices) for 5 or 10 years (commonly 10 years, similar to EU practice). The Federation accounting regulations might require 5-10 years for financial documents. To be safe, most companies will keep invoices 10 years. Importantly, the law mandates that the Tax Authority (Porezna uprava) itself will store all submitted invoices for 11 years counting from the year of issuance. This means if an invoice was issued in 2026, the Tax Authority’s central database will hold it until end of 2037. This 11-year retention by the authority ensures that even if a taxpayer loses their copy, the government still has an official record to cross-check for at least a decade. The 11-year figure is explicitly stated in the law and commentary, likely chosen to cover any extended audit cycles (10 years is a common statute of limitations for VAT fraud in many places, plus an extra year buffer). [fmf.gov.ba] [fmf.gov.ba], [edicomgroup.com] [edicomgroup.com]
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Archiving Format and Storage Location: Electronic invoices and digital transaction data must be archived in their original electronic form and within the territory of the Federation. The law requires that digital transaction data be stored in an unmodified form, protected against unauthorized access, and sequentially linked (to detect missing entries). Furthermore, it stipulates that the archive of digital data must be kept on the territory of FBiH (this is likely to ensure jurisdictional control and compliance with local laws). If cloud storage is used, it’s allowed only if the data is secure and not accessible to unauthorized parties. The law says if data from the CPF is stored in the cloud, it must be protected from unauthorized use. Also, if data is transferred from the EFS to an external archival system, the complete sequence of transactions must be preserved and the readability/integrity of data must remain guaranteed throughout the retention period. And crucially, during the mandatory retention period, you cannot move data to an external archive in a way that compromises its readability. In summary, taxpayers likely will rely on the CPF’s stored records as one layer of archiving (since Tax Admin keeps 11 years), but they are also obliged to keep their own copies (in case needed for accounting or in case any discrepancy). They must ensure these copies are stored locally (or at least in compliance – perhaps an EU server might be considered acceptable if accessible, but the law’s wording suggests it wants local storage). Many companies might choose to store data in the CPF only and perhaps download periodic backups. The system probably provides a way to export your invoices if needed. [fmf.gov.ba]
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Format of Archival: The invoices will be in an electronic format (XML/UBL). For archival, they should remain in that structured format to ensure full detail and verifiability. However, to satisfy local accounting, companies might also store a human-readable version (PDF) alongside. The law doesn’t forbid storing PDF, but the legal invoice is the structured data with signature and codes. The archive must maintain the linkages (digital signatures, VBR, etc.) so that an audit even years later can verify an invoice’s authenticity. The requirement that archives be linked sequentially means each invoice record should be in an indexed chain (preventing deletion without trace).
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Integrity & Authenticity Over Time: Ensuring integrity means using secure storage and cryptographic protections. The digital signature on each invoice is a key part – even if an invoice is stored offline, the signature ensures it hasn’t changed since issuance. The law’s mention of not losing readability if moving to external archive suggests that if you export data, you must keep it in a format that can still be read and verified with its signature for 11 years. Companies must plan to update storage media as needed (so data doesn’t become unreadable due to obsolete technology – implicit in many laws about electronic archives). [fmf.gov.ba]
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Audit Access: Tax auditors will have access to the electronic records via the CPF. Since the Tax Administration itself stores all invoices, auditors can retrieve needed invoices from their system. However, businesses are still expected to be able to present invoices (electronically) upon request. The system likely has a portal where a business can show all its past invoices. Authenticity is guaranteed by the system’s records, so providing data to auditors is straightforward – either give them access to your account or print/export the needed invoices from the CPF. The law also specifically allows customers to verify their invoices for up to 60 days online, and it implies that beyond 60 days, verification would be done by tax officials (since after 60 days the invoice would no longer be on the public portal, but still in the system). Auditors also can request that if an invoice is in a foreign language, the taxpayer provide a translation, indicating they prioritize readability in audits. [fmf.gov.ba]
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Paper Archiving: For paper fiscal receipts (B2C), there is a quirky rule: a customer must keep the paper receipt within 20 meters of the store until they exit, to show an inspector if asked. This is to catch shoppers right after purchase. However, this is a minor detail. From the business’s perspective, they don’t need to archive paper receipts because they have the electronic record. The customer’s obligation to keep a receipt on them briefly is more an enforcement tactic (discouraging customers from discarding receipts immediately, which could aid tax evasion). Businesses, on the other hand, must ensure even paper-printed invoices or receipts have their electronic originals archived. If they issue any paper, it’s only a copy of the e-invoice (the law says when an e-invoice is issued, the original is considered the one available to buyer and seller electronically). [fmf.gov.ba]
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Local vs Foreign Storage: As noted, the law favors local (in-country) storage of the transactional database. This means if a company uses a cloud solution, it might need to ensure that data centers are in BiH or at least mirror data in BiH. This is likely to be clarified by regulations – perhaps allowing EU storage if certain conditions are met (as some countries do) or requiring at least that the Tax Admin has real-time access (which they do since they get every invoice anyway). In any case, taxpayers should not exclusively rely on servers outside BiH for the official archive unless permitted, to avoid non-compliance with the locality rule. [fmf.gov.ba]
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Archiving Responsibility: Tax Administration’s CPF archive: The central system keeping invoices for 11 years is a boon to compliance. However, that doesn’t absolve taxpayers from maintaining their own records – the law still says the taxpayer must keep invoices per VAT/accounting laws. So if a taxpayer fails to produce an invoice copy during an audit, they could be penalized (though the auditor could retrieve it from CPF, the company is expected to have it too). Penalties exist for not preserving records properly under general tax rules. Also, if a company were to use an external archive, they must ensure no loss of data readability for the retention period – which suggests that if they do something like transferring data to a proprietary system that later becomes unreadable, that would violate the law. Best practice will be to keep the original XML plus a human-friendly copy. [fmf.gov.ba]
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Audit Trail and Accessibility: The requirement that archives be linked and gapless means that the archive should function as an audit trail. This is similar to SAF-T and digital bookkeeping principles – each record is linked to the next (like using hash chains or sequential numbering) so you can’t remove one without it being obvious. The EFS likely helps enforce that (ensuring sequential numbering and sending data accordingly). Auditors will check that there are no “holes” in invoice numbering or missing records. The system’s design with VBR and SBR inherently provides an audit trail: the SBR ties an invoice to the issuer’s device and previous invoice (maybe via hashing), and the VBR ensures the Tax Authority got it. For audit access, the law implies that all these records must be readily available. A likely scenario is that an auditor can login to the Tax Authority’s system and see a company’s ledger for the last 5-10 years filtered by date, buyer, etc., making audits very data-driven. For the company, they should ensure any older invoices stored externally can be re-imported or read if needed by an auditor.
In summary, archiving requirements demand long-term, secure storage of e-invoices for at least a decade. Taxpayers must keep invoices per VAT/accounting law retention periods (commonly 10 years), and the Tax Authority will keep them for 11 years. Data must remain accessible, authentic, and intact – digital signatures and system logs will ensure integrity, and storage must be organized to prevent loss or tampering. Local storage is mandated to maintain jurisdictional control, and cloud use is allowed with security conditions. For businesses, this means they can rely in part on the official system’s archive but should also preserve their own backups of all invoices (e.g. download periodic archives from CPF). There will be a huge reduction in paper storage needs, but an increase in responsibility to manage digital records properly. Audit procedures will be facilitated by the central repository – auditors can obtain data directly, but businesses are still expected to furnish records if asked. Compliance with archiving rules will be critical; failing to keep proper archives or compromising data integrity could result in penalties (not explicitly enumerated in the law’s penalties section, but covered under general compliance obligations and potentially as a “minor offense” if invoice content/retention is not as required). [fmf.gov.ba] [edicomgroup.com]
9. Penalties & Enforcement – The new law establishes a robust penalty regime to ensure compliance. Violations of the e-invoicing and e-reporting requirements can lead to substantial fines and even business closure orders for severe non-compliance. The penalties vary by the nature and seriousness of the offense, with the law distinguishing between “heavy offenses” (Teški prekršaji) and “lighter offenses” (Lakši prekršaji). Below is a summary of enforcement measures and penalties, with references to the draft law’s provisions:
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Major Offenses and Fines: The law designates certain key failures as severe offenses, subject to high fines. For a company (legal entity), a heavy offense is punishable by a fine ranging from 8,000 KM up to 30,000 KM (Bosnia-Herzegovina Convertible Marks). The top end, 30,000 KM, is roughly EUR 15,000. These heavy offenses include:
- Failing to issue an invoice for a taxable transaction at all (i.e. not providing any fiscal receipt or e-invoice for a sale, which undermines the system).
- Failing to issue an e-invoice when required under Article 14 – Article 14 covers the obligation to issue e-invoices for B2B/B2G transactions. In short, if a business continues to operate outside the platform (e.g. issuing paper invoices or unreported invoices for B2B when it should use CPF), this is a serious breach.
- Failing to issue fiscal receipts as required under Article 16 – Article 16 deals with issuance of receipts for cash transactions. So, not giving a fiscal receipt to a consumer (or not using the EFS to do so) is a heavy offense.
- Failing to perform self-billing when required (Article 20) – As noted, if a buyer doesn’t self-invoice a purchase from an unregistered person as obliged, it’s a severe violation.
- Using non-authorized maintenance or service for the EFS (partially shown: “uses maintenance services for EFS from …” presumably unauthorized provider). The law likely requires using certified technicians or vendors for the fiscal system; violating those rules is listed as well.
- Not having a certified EFS in place (Article 46) – if a business does not acquire/install an approved electronic fiscal system as required, that’s a major breach.
- Issuing invoices without a Verification Number (contrary to Articles 51–53) – Articles 51–53 presumably cover certain exceptional issuance cases, but essentially if you issue invoices that haven’t gone through CPF (hence no VBR), it’s an offense.
- Advertising violations (Article 60) – possibly referring to prohibitions on advertising hacks or non-compliant devices.
For any of these major offenses, in addition to corporate fines, the law prescribes that the responsible individual (e.g. the CEO or person in charge) of the company is also subject to a fine of 5,000 KM to 15,000 KM. And if a sole proprietor or individual commits such an offense, they too face fines (the draft suggests a physical person faces a similar range; it was cut off but likely 5,000–15,000 KM). These are hefty amounts, underscoring that failing to comply with core obligations (issuing invoices and reporting them properly) will not be taken lightly. -
Repeat Offenses: If an offender repeats a violation, penalties escalate. The law says that fines for offenses will be increased by 50% if the taxpayer repeats the offense within one year of the first infraction. So, a company that was fined once and then is caught again doing the same thing in a short span could face up to 45,000 KM for a second offense, for instance. This is intended to deter recidivism and push businesses to correct issues immediately.
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Minor Offenses and Fines: Lighter offenses carry lower (though still significant) fines. A legal entity can be fined 5,000 KM to 18,000 KM for a minor offense. Minor offenses likely include:
- Invoice content errors or non-compliance – e.g. the invoice missing some required detail or not formatted correctly (“if the content of an invoice or fiscal receipt is contrary to the requirements…”).
- Not following certain procedures – possibly failing to timely inform the Tax Administration of required info, or minor delays in reporting corrective invoices, etc. For instance, not fiscalizing a credit note (corrective invoice) properly as per Article 55 is listed. Also perhaps not performing some monthly duties (like failing to review the monthly ledger by the 10th) could be minor.
- Other technical breaches – e.g. not registering an operator 24h in advance as required, or not notifying of a change in business location, etc., might fall under minor offenses.
Again, individuals (like a responsible person of a company) would face smaller fines for these – the law says 3,000 KM to 10,000 KM for the responsible person for a company’s minor offense. A sole proprietor or individual who commits a minor offense would also be fined (likely in the similar 3,000–10,000 KM range, though truncated text doesn’t show the exact figure, it likely mirrors that). -
Enforcement Measures (Beyond Fines): The law provides that inspectors can issue orders and even impose business prohibitions (temporary closure) for non-compliance. Specifically, if during an inspection the tax inspector finds violations of the law or irregularities, they will issue a resolution ordering the taxpayer to correct the issues within a specified period (not less than 7 days and not more than 30 days). This is essentially a warning/rectification period for certain issues. If the taxpayer does not fix the violations in the given time, the Tax Administration will enforce a measure of prohibition as per Article 63. Article 63 likely refers to shutting down the business operations until compliance is achieved. The draft indicates that the effect of this measure lasts until the taxpayer corrects the irregularities. In common terms, this means the tax authority can seal the cash register or premises of a business that refuses to comply, effectively stopping it from doing further sales until it installs the proper system or starts issuing invoices. Given Bosnia’s past with fiscal cash registers, tax authorities are known to sometimes close shops that fail to issue receipts. The new law continues that power.Additionally, the mention of “potential trade restrictions” as a penalty in external commentary likely refers to this ability to prohibit a taxpayer from conducting business if they seriously flout the rules. It’s a strong enforcement tool beyond monetary fines. [edicomgroup.com]
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Examples: If a company decides to ignore the mandate and continue selling without issuing e-invoices/fiscal receipts, it might quickly accumulate major fines (tens of thousands of KM) and get its business operations suspended by the tax inspector. Conversely, if a company is trying to comply but makes some mistakes (say a few invoices with missing info or a late transmission), it might face a minor fine of a few thousand KM for each audit finding. The spectrum covers both deliberate evasion and procedural errors.
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Article References: The law’s penalty provisions are found in Article 66 (heavy offenses) and Article 67 (light offenses), among others. For instance, Article 66(1) lists the major violations (points 1–8 as above) and sets fines 8k–30k KM for companies, 5k–15k KM for responsible persons, etc. Article 67(1) lists minor violations with 5k–18k KM fines for companies and 3k–10k KM for responsible persons. There’s also a clause (Article 66(4) and 67(4)) about increasing fines by 50% for repeat offenses within a year. These provisions ensure that enforcement has real teeth.
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Other Enforcement: We should note that the Tax Authority will be doing cross-checks of data: because they collect all sales and purchase info, they can automatically identify discrepancies. For example, if a buyer claims an input VAT for an invoice that the CPF never saw from the supplier, that will flag an audit. Or if a business’s VAT return doesn’t match the total of invoices in CPF, they will be investigated. This automated enforcement isn’t a “penalty” per se, but it means the system itself will enforce compliance by making evasion very hard without detection. The ultimate penalties still are fines or worse if discrepancies imply fraud. The law also likely coordinates with existing penalty provisions in the tax procedure law – e.g. tax evasion can lead to even criminal charges if proven. But specifically under this law, they focus on monetary fines and administrative measures.
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Summaries from Secondary Sources: External summaries highlight that penalties vary by severity and can include fines and even trading bans. This matches the above: minor infringement, smaller fine; serious infringement (like not e-invoicing at all), big fine plus possibly being shut down until fixed. The government is clearly signaling that compliance is not optional and there will be strict enforcement to back up the mandate. [edicomgroup.com]
In practice, we can expect an initial leniency or education period when the system first goes live (the authorities might issue warnings first or waive penalties for first-time minor mistakes in the early months). But once fully implemented, these penalty provisions will be enforceable. Companies should therefore prioritize compliance – the cost of non-compliance (financial and operational risk) far outweighs the cost of implementing the required systems. For reference, a 8,000–30,000 KM fine is substantial for even mid-sized businesses, and repeat or multiple infractions could multiply that.
10. Pre-Filled VAT Returns – As of the latest information, Bosnia and Herzegovina does not yet offer pre-filled VAT returns to taxpayers, and none are immediately introduced by this law, but the new e-invoicing system lays groundwork that could enable pre-populated VAT declarations in the future. The current state and prospects are:
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Current VAT Return Process: Presently, businesses in BiH (state-level) file periodic VAT returns (likely monthly) by manually calculating their output VAT and input VAT from their records. There is no automated pre-fill from the tax authority side under the old system. All necessary data had to be compiled by the taxpayer from their sales and purchase invoices. The e-invoicing law we discuss is an entity-level initiative (Federation) and is primarily about transactional reporting, not directly about changing the VAT filing procedure (which is handled by the state-level Indirect Taxation Authority, ITA). So, strictly speaking, this law itself does not establish pre-filled VAT returns.
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Data Availability for Pre-Fill: However, one of the benefits of real-time invoice reporting is that the tax authorities will have a complete dataset of sales and purchase data for each VAT-registered taxpayer. In fact, the Federation’s CPF will compile a **“book of output invoices and input invoices” for each taxpayer automatically from the reported data. By the 10th of the month, the taxpayer is supposed to review these and make corrections if needed. This is essentially an official record of what the taxpayer’s VAT ledger looks like. It’s a short step from this to pre-filling a VAT return. While the Federation Tax Administration is not the one that processes VAT returns (that’s the ITA’s job), it’s conceivable that in the future there will be data sharing between the Federation’s system and the ITA. The ITA could use the e-invoice data to draft the VAT return for the taxpayer.
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Plans or Proposals: So far, neither the Federation nor the State have announced a formal plan to implement pre-filled VAT returns as part of this project. The focus has been on implementing the invoice reporting to fight evasion. Pre-filled returns (sometimes called VAT statement drafts) often come in a mature phase of such systems (for instance, Italy began offering pre-filled VAT returns after a couple of years of their e-invoicing system). Bosnia’s system will accumulate data that could be used for this. We might anticipate that after a year or two of data, the Indirect Taxation Authority might roll out a feature where a taxpayer can download a “proposed VAT return” based on e-invoices and e-receipts reported. But as of early 2026, taxpayers should expect to continue filing VAT returns manually (or via the existing electronic filing system) using the data they have – albeit that data will now be readily available from the CPF ledger. [zenit.ba]
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Which Fields Could be Pre-Filled: If pre-filled returns were introduced, the likely fields to be auto-populated would be: total output tax (sum of VAT on all sales), total input tax (sum of VAT on all purchase invoices entitled to deduction), and hence net VAT due or credit. The system might also identify sales by rate (standard rate, reduced rate, zero/exempt) to fill in those breakdowns on the return. Fields that might still require manual input could be things like adjustments, non-invoice-based corrections, imports where VAT was paid at customs (unless the system integrates with customs data too), any special adjustments (like pro-rata for mixed exempt businesses, or annual adjustments). Also, if a taxpayer has transactions not captured (though ideally all should be captured if they comply), they would need to add those.
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Comparative Insight: Several countries with e-invoicing or real-time reporting are moving towards pre-filled returns. For example, Italy is generating draft VAT registers and annual returns for some taxpayers based on e-invoices and reported data, and others like Spain (with SII) considered it but still require filing. Hungary collects invoice data in real time and from July 2024 planned to use it for declaring data. In this sense, Bosnia’s approach of generating the electronic sales and purchase ledgers (knjiga izlaza i ulaza) is a step toward that goal. A taxpayer in FBiH will effectively have an official record of all their taxable sales and purchases in one place, reducing the chance of error in compiling returns.
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Taxpayer Input Still Required: At least initially, taxpayers will still have to file their VAT returns by pulling data (likely from the CPF ledger). The law even requires them to review the CPF’s ledger by the 10th of the month and correct any missing entries – presumably this is to ensure the data is accurate for their VAT return which they would file by the 10th or 15th of the month. So rather than the authority sending them a return, it’s more the taxpayer uses the authority’s data to prepare their return.
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Future Outlook: The Federation Ministry of Finance does highlight improved cross-checking and potentially automating tax obligations as a benefit. Once the system is stable, it wouldn’t be surprising if the tax authorities explore offering semi-automated VAT filings or at least analytics that pre-validate a taxpayer’s return against reported data (e.g. warning if they try to claim more input VAT than invoices reported). Officially, “pre-filled VAT returns” are not yet a feature to rely on, but the infrastructure clearly points toward that possibility. There is also an EU influence: The EU’s “VAT in the Digital Age” initiative aims for real-time digital reporting and perhaps pre-filled cross-border VAT returns by 2028-2030. BiH aligning with EU standards suggests they too foresee a move in that direction. [zenit.ba], [zenit.ba]
In summary, no, pre-filled VAT returns do not exist in BiH as of now, nor are they explicitly introduced by the e-invoicing mandate. Taxpayers will continue to file their VAT returns manually, but with much greater ease because the required figures can be sourced from the data already collected by the platform. Pre-population of returns is not currently provided, but the e-invoice data collected (sales and purchase books on CPF) will significantly simplify the preparation of VAT returns for businesses and improve accuracy. It also gives the tax authority the ability to cross-verify returns. We can expect that over time, the authorities might leverage this to introduce preliminary draft returns or at least to eliminate the need for certain annexes. For example, listing of input VAT could become unnecessary for the taxpayer to compile, since the system already has it.
For now, taxpayers should still compile their VAT returns but use the CPF as a source of truth. If and when pre-filled returns are launched, an announcement and new procedure will be communicated. The current law is a foundational step, creating the digital records that make pre-filled returns feasible in the near future, but immediate reliance on automatically generated returns is not implemented in 2026.
11. Impact on SMEs and Startups – The mandatory e-invoicing and real-time reporting mandate will have a significant impact on small and medium-sized enterprises (SMEs) and startups in Bosnia and Herzegovina. Overall, it represents a push towards digitalization that can pose challenges in the short term but may yield benefits in efficiency and compliance in the long term. Here’s an assessment of various aspects of SME impact, supported by recent sources:
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Inclusivity vs. Exemptions: The mandate is broadly inclusive – it does not exempt SMEs by size or turnover (aside from the minimal threshold for unregistered individuals at 5,000 KM, which is extremely low). Unlike some countries that have phase-in thresholds (e.g., only large companies first), even very small businesses in FBiH are expected to comply from the go-live date. No simplified regime (like cash accounting simplifications or invoice aggregation) is introduced in this law – every transaction must be reported. However, recognizing the burden on micro-businesses, the government has planned to provide free software tools and applications for smaller taxpayers. This is a form of support specifically targeting SMEs so they don’t have to invest in expensive proprietary systems. For example, a small retailer or a new startup could use a government-supplied app on a phone or computer to issue compliant e-invoices and fiscal receipts without purchasing a certified cash register. This lowers the entry barrier for compliance. [fmf.gov.ba] [sovos.com], [zenit.ba]
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Phased Onboarding for SMEs: Officially, no different timeline is set for SMEs versus large companies – the law applies to all at once. But in practice, SMEs often need more hand-holding and transition time. The authorities conducted a public consultation and likely will do outreach and training sessions. If any grace period is informally given, it might de facto benefit SMEs the most (as large companies will comply on time, smaller ones might lag and be given some leniency initially). Some sources note that implementation timelines and secondary regulations are still being defined, leaving room for perhaps a staged approach if necessary. However, projections like Sovos’s timeline did not explicitly carve out an SME phase. So SMEs should prepare to comply along with everyone else by the mandatory date (2026 expected). [edicomgroup.com] [sovos.com]
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Cost of Compliance: For many SMEs, adopting e-invoicing will mean upfront costs or changes in processes. They may need to purchase or upgrade a billing software, buy a certified fiscal printer or device (if doing retail sales), and possibly invest in a reliable internet connection and IT support. There might also be costs for digital certificates for signing invoices if not provided free. Certified service provider fees could be a factor if SMEs choose to use a third-party solution or outsource their invoicing management. On the other hand, the government’s “free application for small taxpayers” should alleviate cost – it suggests that at least the basic software will be given at no monetary cost. That said, even using a free tool doesn’t eliminate the need for training and possibly new hardware (e.g., a small shop that was writing manual receipts will now need a tablet or computer and a printer). SMEs with legacy cash registers might have to replace them with new models that connect to the internet; that’s an investment. [zenit.ba]The operational cost going forward could include internet data plans, maintenance of the devices, and any service contracts for technical support. For very small businesses, these costs aren’t negligible. However, these should be weighed against benefits: for instance, SMEs will no longer need to buy fiscal paper rolls or store loads of paper invoices, and their bookkeeping might be simplified, which could reduce accountant fees or labor hours.
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Administrative Burden vs Simplification: Initially, SMEs may feel an increased administrative burden: they have to learn new software, ensure every transaction is properly recorded electronically, and manage potential errors (e.g., dealing with invoice rejections by the system). This is a new routine that can be daunting for non-tech-savvy small entrepreneurs. There might be compliance tasks like ensuring all staff (operators) are registered in the system in advance, and checking the monthly records online. These add to admin work.On the flip side, the system offers simplifications: automatic record-keeping and elimination of certain manual reports. For example, SMEs will no longer need to manually compile sales ledgers or certain VAT listings, since the system does it for them. Invoice storage is taken care of electronically, lifting the weight of maintaining paper archives. Also, SMEs might experience fewer tax inspections in person in the long run, because authorities can audit them remotely through data. That could mean less disruption and less need to gather documents for audits. So, while day-to-day compliance becomes more structured, the overall administrative effort in accounting and tax preparation could reduce. For startups that are digital-native, using an e-invoicing platform from the outset might actually streamline their operations.
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Cash Flow Effects: One area of concern sometimes is whether real-time reporting affects cash flow – e.g., through faster tax collection or changed payment habits. In BiH’s case, the VAT filing and payment schedule isn’t changed by this law, so businesses still pay VAT monthly as before. However, faster invoice issuance and delivery might indirectly help SMEs get paid faster by their clients. The platform allows instantaneous delivery of invoices to customers (no postal delays) and even includes a feature for customers to pay invoices online. This could improve payment cycles and reduce Days Sales Outstanding for SME sellers, which is a cash flow plus. Additionally, errors on invoices will be caught immediately (the system validates and can prompt corrections within 24h), preventing downstream delays in payment or VAT reclaims due to mistakes. [vatcalc.com]Another cash-flow consideration: with accurate, real-time data, VAT refunds for those in net credit might be processed more smoothly since the authority has all the proof of purchases. If the ITA trusts the data, they may be more willing to refund faster, benefiting cash flow for exporters or investment-heavy startups. So, while no explicit cash flow incentives are in place, the improved transparency can have positive effects.
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Digitalization Requirements: For many small businesses, this mandate effectively forces them to adopt digital tools. SMEs that perhaps used handwritten invoices or simple Word/Excel documents must now switch to a more automated system. This is a challenge – training and change management are needed – but it’s also dragging the SME sector into modern digital commerce. In the medium term, this can make them more efficient and competitive. For instance, an SME that starts using an ERP or e-invoicing software might discover other features (inventory management, etc.) that help their business. Also, being able to exchange invoices electronically (especially if Bosnia eventually connects to EU systems) could ease doing business with larger clients who prefer digital trade.
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Advantages for Early Adopters: SMEs that adapt early to the e-invoicing system could reap some benefits:
- They will avoid penalties and last-minute rush by being prepared.
- They might market themselves as transparent and modern, possibly attracting business from companies that value electronic processes.
- Internally, they will have better financial oversight – with every transaction recorded in one system, they can get up-to-date sales reports, etc. This can improve decision making.
- If an SME is aiming to scale up or seek investment, having a fully digital accounting trail can make due diligence easier. On the other hand, laggards might face interoperability challenges: if most businesses start sending only e-invoices, an SME that hasn’t set up the system may struggle to process incoming invoices or could risk non-compliance if they try to do things manually.
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Interoperability Challenges: One potential challenge for smaller businesses is integrating the e-invoicing workflow with their existing processes. Large companies often have IT departments to integrate their ERP with the new platform’s API. SMEs often use off-the-shelf software or none at all. They might end up using separate systems for different needs (e.g., one system to issue invoices to big clients, another for cash sales) if not carefully planned. There could be fragmentation: for example, a small firm might invoice government clients via one portal, and others via CPF. However, Bosnia’s approach is trying to unify everything under CPF for all clients, which helps. Yet, if an SME deals internationally, they might need to maintain both the local e-invoice and perhaps send a PDF to their foreign client (since foreign client can’t log into CPF). Managing these multiple outputs could be tricky for a small office. Also, continuous internet connectivity and IT maintenance might be new burdens for some – e.g. an SME in a region with unstable internet might worry about how to issue invoices if the connection drops (they may need backup internet or a procedure, which adds complexity).The learning curve is another issue – some older proprietors may find the new system intimidating. The government and possibly chambers of commerce will need to provide training and support specifically for SMEs and micro-entrepreneurs, or else there’s a risk of non-compliance due to lack of know-how rather than intent.
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Government Support Programs: Aside from the free software, no direct subsidy (like financial support to buy equipment) has been announced. However, similar reforms in other countries sometimes come with tax credits or subsidies for purchasing new cash registers or software. It’s possible that some form of incentive might be introduced by the Federation or cantonal levels to encourage quick adoption (this is speculative; nothing cited indicates a subsidy yet). The EU or development organizations might also provide assistance for SME digitalization in BiH as part of modernization efforts.
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SME Readiness: Given that this law was under discussion for a couple years, business associations in BiH likely have been preparing. Big 4 firms and local accounting firms have been notifying clients (including SMEs) of these changes since 2024. Nonetheless, a sizeable portion of small businesses may not be fully aware or ready. There haven’t been publicized surveys yet about SME readiness specifically. But in similar contexts (e.g., Serbia’s e-faktura introduction), initially many SMEs were unaware and rushed near the deadline. The Federation will need to engage in outreach (seminars, media campaigns) in 2025–2026 to bring SMEs aboard. The benefit is that some SMEs, especially startups, are relatively tech-savvy and may adapt quickly – for instance, an IT startup or a services firm likely already uses digital tools and will only need to tweak them to comply. [vatupdate.com]
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Market Impact and Competition: Requiring all businesses to use e-invoicing can level the playing field in some respects. It curtails the shadow economy and undercutting by those who avoided taxes. SMEs who have been compliant will no longer be at a disadvantage to competitors who cheat, because cheating becomes much harder. As one of the government’s aims is to “promote fair competition” by fighting tax evasion, honest SMEs should benefit from a fairer market. In the big picture, SMEs that embrace this digital change could become more efficient and integrated, possibly opening up opportunities to trade with larger companies or even cross-border (since they’ll meet modern e-invoicing standards). On the downside, SMEs who fail to adapt could be pushed out – either penalized or losing business because others will only deal with compliant suppliers. [comarch.com]
In summary, SMEs and startups will face an adjustment period with upfront costs and learning challenges, but they are being supported with free tools and will ultimately benefit from simplified compliance and a more level field. The government’s own analysis emphasizes modernization with acceptable costs relative to benefits. The law was designed acknowledging the “feedback and suggestions of all participants in the public debate” and aiming for a model that brings “satisfactory benefits in relation to the accompanying costs”. This suggests authorities tried to calibrate the system to not overburden SMEs. Indeed, providing free applications for small taxpayers is explicitly stated as a goal. SMEs should take advantage of that and the lead time before enforcement to get ready. Early compliance can even offer them some operational advantages. Meanwhile, they should be aware that non-compliance carries heavy penalties (which for a micro business could be ruinous – see Section 9, fines in the thousands of KM). Thus, it’s critical for SMEs to engage proactively: seek training, possibly partner with software providers (there are many low-cost cloud solutions) or use the government’s tools, and potentially consult with accountants or IT specialists to ensure a smooth transition. [zenit.ba] [zenit.ba], [zenit.ba]
12. Official References – For those seeking authoritative information and guidance on Bosnia and Herzegovina’s e-invoicing and e-reporting framework, here are some up-to-date official resources and reputable publications:
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Government and Tax Authority Sources:
- The Federation of BiH Government’s Official Portal provides news releases on legislative developments. For example, the Government’s announcement on adoption of the draft Fiscalization law (18 Nov 2025) outlines the law’s purpose and scope. (Source: Government of FBiH Press Release). [fbihvlada.gov.ba], [zenit.ba]
- The Federal Ministry of Finance (Federalno ministarstvo finansija) has published the draft law text and possibly explanatory notes. The full Draft Law on Fiscalization of Transactions in FBiH (November 2024) is available in PDF from the Ministry’s website, detailing all legal provisions (in local language). (Source: FMF.gov.ba – Draft Law text). [fmf.gov.ba]
- The Parliament of FBiH news outlets have updates on the law’s passage. For instance, Biznis.ba reported on the House of Peoples approval of the law on 23 Jan 2026, confirming parliamentary adoption. (Source: Biznis.ba – parliamentary news). [biznis.ba]
- The FBiH Tax Administration (Porezna Uprava FBiH) likely will update its website (pufbih.ba) with guidelines and e-services. They already have an e-Services portal (ePorezna) and will integrate the new system there. Watch for official technical instructions or rulebooks (“Pravilnik”) issued by the Tax Administration or Ministry of Finance, as mandated by the law to flesh out technical details. (Source: PUFBIH official site).
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Legislation and Official Gazette:
- Once promulgated, the final Law on Fiscalization of Transactions in FBiH will be published in the Official Gazette of FBiH. That will be the definitive reference for legal articles, penalties, dates, etc. Interested parties should refer to the Official Gazette issue from early 2026 that contains this law.
- State-level VAT Law and Rulebooks (Indirect Taxation Authority) – remain relevant for VAT return filing and general VAT rules, but they will likely be amended in future to accommodate real-time reporting data.
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Technical Specifications:
- The detailed technical documentation (data format, API specs, certification criteria for software) will likely be released by the Tax Administration. Keep an eye on official channels or the Ministry’s publications for a document akin to “Technical instruction for e-invoicing portal”. For example, a reference exists to a technical instruction for the ePorezna portal – similar documents will outline how the CPF and EFS interface works. (Source: likely FBiH Tax Admin or Ministry technical docs).
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Big 4 and Advisory Publications:
- EY’s E-invoicing Developments Tracker (Jan 2026) provides a global overview and notes BiH’s status. It confirms that as of Jan 2026 e-invoicing in BiH was “Allowed but not mandatory” (since the law was not yet in force), and that a mandate is on the horizon. (Source: EY Global Tax Guides – e-invoicing tracker). [ey.com]
- Deloitte, PwC, KPMG have likely issued Tax Alerts or newsletters on this topic:
- For instance, Deloitte was involved in e-invoicing solutions (they have an alliance with Pagero, which reported on BiH) – check Deloitte’s tax alerts around late 2024 for “Bosnia – Draft law on e-invoicing”.
- KPMG might have included BiH in their Indirect Tax updates. While we don’t have a specific citation from KPMG here, these firms often publish country-by-country updates.
- Orbitax (which often aggregates Big4 news) posted a note on 15 Nov 2024 about BiH introducing mandatory e-invoicing for online transactions. (Source: Orbitax News – referencing Pagero).
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Specialized VAT/Government Technology Sites:
- VATupdate.com has several short articles on Bosnia’s progress:
- “Mandatory e-invoicing on the horizon in BiH” (Dec 9, 2024) – outlines the draft law and scope. [vatupdate.com]
- “BiH: Mandatory e-invoice law to combat tax fraud…” (Jan 19, 2025) – a summary with key points, citing Sovos. [vatupdate.com]
- These are quick reads and link to sources like Pagero or Sovos.
- Sovos (an e-invoicing compliance provider) has free analysis:
- “Bosnia and Herzegovina e-invoicing” overview page (updated 2025) – which we used for timeline and requirements. [sovos.com]
- Regulatory blog posts (Jan 17, 2025 by Sovos, Dec 1, 2025 update) – highlighting developments. [sovos.com], [sovos.com]
- EDICOM (global e-invoicing provider) blog (Feb 12, 2025) – “BiH to implement mandatory e-invoicing…”, offering a detailed summary in English. [edicomgroup.com], [edicomgroup.com]
- Comarch (IT firm) article (Dec 6, 2024) – “Mandatory E-Invoicing Set to Launch in BiH” – summarizing scope, platform, and noting sector exemptions. [comarch.com], [comarch.com]
- Fiscal Solutions / RegTech articles (Jan 2025) – discussing how this reform is “last chance for fiscalization” and penalty emphasis. [fiscal-req…ements.com]
- VATupdate.com has several short articles on Bosnia’s progress:
These sources are publicly accessible and provide reliable information. The government publications and law text should be considered the primary references for exact legal requirements. The Big 4 and vendor articles are useful for interpretation and practical insights.
Key official links include:
- Federation Government Press Release (fbihvlada.gov.ba) [fbihvlada.gov.ba]
- Federation Ministry of Finance – Draft Law PDF [fmf.gov.ba]
- Official Gazette (once published)
- Tax Administration (pufbih.ba) for guidelines
- Sovos analysis page, EDICOM blog, VATupdate summary for quick reference. [sovos.com] [edicomgroup.com] [vatupdate.com]
13. Summary – In conclusion, Bosnia and Herzegovina (specifically the Federation of BiH) is moving to a modern e-invoicing and e-reporting system that will affect virtually all businesses. Below is a concise overview of the key elements, implications, and next steps:
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Scope: The mandate covers all B2B, B2G, and B2C transactions in the Federation with only limited exceptions (mainly certain government, defense, and unpaid health services). Every taxable sale must be recorded and reported electronically in real time, whether it’s a local sale or a cross-border transaction. The system even encompasses self-billing for purchases from non-registered persons to ensure no transaction goes unreported. Essentially, if you are a business or entrepreneur in FBiH making a sale, you will need to issue an e-invoice or fiscal e-receipt through the new platform. [comarch.com], [vatupdate.com] [fmf.gov.ba]
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Timeline: The reform is imminent. The draft law was published in Nov 2024 and has been approved by the FBiH Parliament as of Jan 2026. The mandatory go-live is expected in 2026, with authorities aiming for full transition by January 1, 2027 at the latest. Businesses should prepare during 2025–2026 (the rollout phase) so that they can comply once the system is officially launched. There may be a brief grace period initially, but by 2027 paper invoicing will be entirely phased out in Federation BiH. [biznis.ba] [sovos.com]
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Key Obligations: Taxable persons must use approved electronic systems to issue invoices/receipts and transmit them in real time to the Tax Administration. In practice, this means installing or subscribing to a certified invoicing software or device (EFS) and ensuring every invoice gets a Tax Authority verification code (VBR) before it is considered valid. Digital signatures are required on invoices to guarantee authenticity. Invoices must contain all standard information and be in a structured EN 16931-compliant format (like UBL XML). All transactions must be reported essentially in real time – there is no slack of several days. Businesses also need to archive invoices electronically and maintain data integrity for at least 10 years. The government’s central system will store them for 11 years. [vatcalc.com], [edicomgroup.com] [fmf.gov.ba] [edicomgroup.com] [sovos.com]
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Main Risks: Non-compliance carries severe penalties. Failing to issue e-invoices or trying to bypass the system can result in fines up to 30,000 KM for companies (≈€15k) and additional fines for responsible persons. Repeat offenses boost fines by 50%. Authorities can even shut down a business temporarily until it complies. The system’s transparency also means tax evasion will be much harder – discrepancies will be quickly flagged. So the risk of detection for under-the-table sales is extremely high, effectively pushing all businesses to comply or face punitive action.
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SME Implications: Smaller businesses and startups will need to adapt to digital invoicing, which may be challenging initially but should bring benefits. They must obtain at least a basic e-invoicing tool (the government will provide free options to ease the burden). In the short term, SMEs may incur costs for devices or internet and invest time in training. However, they will gain from a streamlined record-keeping (no more paper invoice books, easier VAT calculations) and potentially faster invoice payments (as invoices are delivered instantly and can be paid online). There are no special exemptions for SMEs – they are included from day one, so they should take advantage of the support on offer rather than delay. In the long run, the uniform compliance will create fairer competition by reducing the shadow economy (honest SMEs won’t be undercut by those evading tax). [zenit.ba] [vatcalc.com] [comarch.com]
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Critical Dates & Next Steps: Right now (2026) we are at the cusp of implementation. The next steps for businesses are:
- Acquire a compliant invoicing solution – either through a vendor or the free state-provided app – and test it.
- Register with the Tax Authority’s e-system once enrollment begins (likely later 2026).
- Train staff on issuing e-invoices and handling any errors (like invoice rejection messages).
- Coordinate with IT consultants or accounting advisors to integrate the e-invoice process into your accounting workflow.
- Keep an eye out for bylaws from the Ministry of Finance which will detail specific procedures (expected in 2026).
- Mark the expected enforcement date on your calendar (provisionally Jan 1, 2026, unless officially adjusted). The critical upcoming milestone to watch is the official announcement of the mandatory commencement date by the FBiH authorities – this will tell businesses the exact timeline for compliance (which sectors from when, any staggered approach or not). Given hint that Jan 2026 was the target, we anticipate phased enforcement through 2026 and no later than Jan 2027 for full mandatory e-invoicing. [sovos.com]
In summary, Bosnia and Herzegovina’s e-invoicing reform is a major leap toward digital tax compliance. Businesses of all sizes in the Federation must gear up for real-time invoice clearance, ensuring every sale is electronically captured. While this demands effort and investment now, it promises a more efficient, transparent, and fair business environment in the near future – with improved tax compliance, potentially simpler VAT administration, and integration into the broader trend of digital taxation across Europe. By proactively preparing and utilizing available resources, companies can turn this compliance requirement into an opportunity to modernize and possibly enhance their operations. [sovos.com], [vatcalc.com]
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