CSR still suffers from inadequate regulations and is still underdeveloped in BiH. The companies, weather private or public do offer some funds in a form of sponsorships of programs and projects. The possible sponsors are not stimulated to support the work of CSOs through the entities Laws on profit and Laws on income which are not mutually harmonized.

Taxpayer donations to legal entities in the Republic Srpska are credited with expenditures of up to 3% of the total annual income from donations to organizations providing humanitarian, cultural, sports and social services and 2% for sponsorship expenses. In the Federation of BiH, expenditures for donations for humanitarian, cultural, educational, scientific and sporting purposes, that are given to legal entities or individuals who have no other income are recognized as tax-deductible expenditure up to 3% of total income in the taxable period for profits while sponsorship expenses are up to 3%.

In the case of individual philanthropy in the Federation of BiH donations of up to 0.5% of the income generated in the previous year given in goods, items or money allocated for cultural, educational, scientific, health, humanitarian, sports and religious purposes, to the associations and other entities carrying out the activity in accordance with special regulations are recognized as an expense. Exceptionally, a donation above the prescribed amount is fully recognized, provided that it is made on the basis of decisions of the competent ministries on the implementation and financing of special programs and actions for the general social interest, but not for the regular activity of the recipient (namely gifts).

0 – 20 Fully disabling environment20 – 40 Disabling environment
40 – 60 Partially enabling environment60 – 80 Enabling environment
80 – 100 Fully enabling environment

In RS, deductible expenditures represent sponsorship and donations of up to 2% of total income in that tax year. In both cases the expenditure is recognized only for self-employed persons.

In accordance to Catalyst report the total number of donations in 2019 is going up to 2.400 individual donations and the total will be announced in the middle of 2020. In 2018 it was 3.302 individual instances which resulted totaling 7,9 million EUR. The average donation per individual is 2,3 EUR indicating increase of 33,1% in relation to 2017.

The relationship between CSOs and for-profit sector remained weak in 2019 due to CSOs’ limited capacities and the poor economic situation for profit sector.

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