Low Operating CostsThe main advantage of the Kosovar labor force is its low operating cost. With the average monthly wage estimated at 360, it is the most competitive in Europe.
Personal Income Tax
Personal Income Tax (Law No.03/L-161) applies to natural persons receiving income from
Kosovar sources and foreign incomes received by Kosovo residents.
Income tax 0 -10 % (Progressive)
Mandatory pension contribution: 5%
Tax on Dividends: 0%
Cost of electricity at 5.5 8.5 EUR cents per kWh (22 cents in EU)
Value Added Tax
Value Added Tax (Law No.03/L- 146) is applied to all importers and businesses with an annual turnover in excess of 50,000. The VAT rate stands at 16 percent and is levied on all goods and services, with an exemption for certain agricultural and capital goods (on which VAT is 0 percent). Exporters receive full VAT reimbursement for exported goods.
|Country||VAT||Corporate profit tax||Personal income Tax|
|Bosnia and Herzegovina||17%||10%||10%|
Comparison of Tax Systems in the region - 2012
Specific Tax code on Depreciation
According to article 15 of the Law on Corporate Income Tax (No.03/L- 162), the amount allowed as a depreciation deduction for the tax period is to be determined by applying the following percentages to the capital accounts under the reducing balance method:
- Category 1: Buildings; five percent (5%)
- Category 2: Vehicles and office equipment; twenty percent (20%)
- Category 3: Machinery and heavy transport vehicles; fifteen percent (15%)