NEW REGULATIONS FOR ACCOMMODATION PROVIDERS IN REPUBLIKA SRPSKA

As of January 1st this year, amendments to the Residence Tax Law in Republika Srpska have come into effect, bringing significant changes for private accommodation owners and rural tourism facilities.

The key change is the abolition of the flat-rate tax for private accommodation. This means that owners of apartments, holiday homes, rental rooms, and rural tourism facilities will now pay the residence tax per each overnight stay, ranging from 1.5 to 3 BAM. In tourist destinations such as Banja Luka, Trebinje, East Sarajevo, and Laktaši, the tax will be between 3 and 4 BAM. The latest assembly session in Trebinje established the residence tax at 3 BAM.

Marko Radić, head of the promotion sector at the Tourist Organization of Republika Srpska, explained to the Trebinje Danas portal that the new law equalizes all accommodation facilities in terms of the residence tax obligation. Previously, private accommodation was subject to a flat annual tax per registered bed, regardless of the number of guests. Additionally, the new law raises the minimum residence tax from 0.5 BAM to 1.5 BAM, while the maximum now stands at 3 BAM, or 4 BAM for tourist destinations. The exact tax amount is determined at the local level.

RESIDENCE TAX PAYMENT AND REPORTING

"The residence tax is paid by the guest as part of the regular overnight price. However, when issuing an invoice, the accommodation provider must separately state the residence tax amount alongside the overnight price," Radić stated, as reported by Trebinje Danas.

Employers and apartment owners are required to transfer the collected amount to the Public Revenue account by the 5th of each month for the previous month.

"Another new obligation is that owners of 'apartment-for-a-day' rentals must submit arrival and overnight stay records to local organizations or agencies by the 15th of each month, depending on agreements and accommodation location. The distribution of residence tax funds remains the same – 80% goes to local communities, while 20% belongs to the national tourist organization, which is now legally required to transfer these funds to local tourism organizations," he added.

IMPACT ON ACCOMMODATION PRICES AND TOURISM DEMAND

Radić does not expect the increase in the residence tax to significantly impact accommodation prices. However, he warns that some providers might take advantage of the situation and raise prices unnecessarily.

"Private accommodation providers have already included the residence tax cost in their prices. Although they are now equalized with larger accommodation facilities in terms of tax payment, they still have advantages such as more flexible pricing and lower operating costs. Hotels, on the other hand, face higher fixed costs and a larger workforce, making these changes affect them differently," he explained.

Radić also emphasized the importance of these changes: "If we look at statistical data on arrivals and overnight stays, we see that 95% of statistics pertain to hotels and similar accommodations, while private accommodations had no record of guest arrivals and stays. Compared to neighboring countries, where private accommodations account for 50-60% of total traffic, it is clear that we had a large gray zone. Many facilities operated unregistered, and many did not pay the flat-rate tax, making this an unregulated sector."

He added that regulation was necessary to ensure accommodation standards, greater guest security, and better record-keeping of stays in local communities, thereby enhancing safety.

"By adhering to legal regulations and categorizing accommodations, we guarantee service quality and enable authorities to maintain clear records of guests and tourist movements, which is crucial for the safety of local communities," Radić said.

Regarding the impact of the new law on tourist numbers, Radić believes that the residence tax amount is not a decisive factor in destination choice.

"Tourists do not choose destinations based on the residence tax. More important factors include clean cities, well-maintained green spaces, quality offerings, and friendly hosts. If we provide excellent service and unforgettable experiences, tourists will come regardless of the residence tax amount," Radić stated.

CONTRIBUTION TO THE LOCAL ECONOMY

The residence tax plays a crucial role in developing the local economy, particularly in smaller tourist destinations. Under the new law, funds collected from the residence tax can be used not only for promotion but also for improving tourism infrastructure.

"Although the new Residence Tax Law allows for tax funds to be used for infrastructure improvements, I believe the main priority should be using this money for destination promotion. This way, funds collected from tourists can attract new visitors, while infrastructure should be financed by local communities. It is a well-functioning chain: a tourist stays in an accommodation facility, pays for the service and residence tax, the facility transfers the tax to the public revenue account, and the local tourist organization uses these funds to promote the destination, services, and offerings, creating a continuous cycle," Radić concluded.

The adoption of the new Residence Tax Law represents a significant step toward regulating the tourism sector and increasing tourism revenue in Republika Srpska.