Bosnia and Herzegovina

Cryptocurrencies are legally recognized in Bosnia and Herzegovina as virtual digital assets or intangible property. The country does not have dedicated crypto legislation, but holding and trading digital assets are legal activities. However, the Central Bank has stated that the convertible mark is the only legal tender and does not recognize cryptocurrencies as payment instruments, though it has no plans to prevent their purchase or trading. Taxation in Bosnia and Herzegovina is complex due to its structure, comprising two autonomous entities: the Federation of Bosnia and Herzegovina and Republika Srpska, each with its own tax administration. There is no single centralized body governing crypto taxation, and tax rules are applied under existing general income tax provisions. Profits from cryptocurrency activities are generally treated as income and are subject to income tax. The rates vary significantly between the entities. In Republika Srpska, a flat 10% income tax applies to gains. In the Federation of Bosnia and Herzegovina, income is subject to progressive rates ranging from 10% to 20%. If frequent crypto trading is classified as "independent business activity," particularly in the Federation, it may also trigger mandatory social contributions in addition to the progressive income tax. There are no identified benefits for holding cryptocurrency for a specific period, the same tax rates apply regardless of the holding duration. Converting crypto to fiat currency is a taxable event, with the gain calculated as the difference between the sale price and the cost basis. Importantly, cryptocurrency transactions are exempt from Value Added Tax (VAT), as they are interpreted as financial transactions. Specific guidance on certain crypto activities is limited. Staking rewards are likely taxed as ordinary income at the standard rates (10% or 10-20%), although the exact timing of when the income is recognized for tax purposes is unclear. Crypto mining, if performed regularly with profit intent, is typically considered a business activity and is subject to standard income tax plus social contributions. For decentralized finance (DeFi) activities like yield farming or liquidity provisioning, and for Non-Fungible Tokens (NFTs), there is no official guidance, these are presumed to be treated under general income tax principles, likely as asset sales or business income depending on the nature and frequency of the activity. Swapping one cryptocurrency for another (crypto-to-crypto) is likely a taxable event based on the fair market value at the time of the swap, but legal ambiguity exists on this matter.