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8/2/2019 Dttl Belarus-Business-guide en 2011
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Tax
Belarus business andinvestment guide
Tax issues 2011
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Country prole 6
Incentives or oreign investors 7
Tax administration 9
Types o business presence 12
Taxation o businesses in Belarus 15
Belarusian-sourced income o oreign companies 25
Taxation o individuals 27
Customs issues 29
Currency control issues 30
Your contacts in Deloitte CIS 34
Contents
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Introduction
This Belarus business and investment guide has been
prepared by Deloitte to provide inormation o interest
to those considering investing or doing business
in Belarus. The inormation provided is primarily
addressed to non-residents o Belarus who may
be contemplating business activities or investment
in the country.
The inormation presented in this publication is correct
at, and refects the situation as o 1 March 2011.
The purpose o the booklet is to explain, in broad terms,
the requirements o local laws aecting the taxation
and also the establishment and operations o business
enterprises in Belarus. The inormation provided in the
ollowing pages is not exhaustive, nor is it intended
to be so. The reader should be aware that the general
ramework o the legislation and the detailed regulations
underpinning it are subject to requent change.
Thereore, beore making any decisions, urther advice
should be sought.
The combination o increased globalization and
the growing complexity o tax systems in individual
countries gives rise to many tax exposures. For both
companies and private individuals, the consequences
o misjudging the tax and legal situation can be serious.
As advisors with extensive experience in Belarus and
abroad, Deloittes role is more than merely identiying
risks - we also nd solutions.
Thanks to Deloittes powerul worldwide network,
we can propose tailor-made solutions that enable
your organization to reduce risks and take advantage
o opportunities to optimize your tax position.
Deloitte tax consulting services cover all o the
tax matters that aect companies and individuals,
irrespective o their size or sphere o activity. These
include ling tax returns, tax planning and assistance
in tax matters. These consulting services are specically
designed or each industry or orm o organization.
Deloitte is a global leader among proessional
services organizations in terms o the number o its
tax partners and proessionals. Deloitte oers a wide
range o services and is able to deploy experienced
proessionals with extensive knowledge and specialized
skills to work or clients across a wide range o sectors.
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Consulting on direct and ind irect taxation
Consultation on various tax issues
International tax planning and structuring
Advice on customs and indirect taxes, value-added tax
and excises according to domestic legislation
Tax reviews and identication o possible tax
optimization options
Tax planning or investment projects
Development o tax accounting policies and related
procedures
Services related to mergers and acquisitions, including
due diligence
Outsourcing and tax compliance services
Accounting and reporting in accordance with Belarusian
legislation
Maintenance o bank accounts; bank and cash
transaction accounting
Tax accounting and tax reporting
Outsourcing services related to payroll and related tax
assessment
Preparation o statistical reports and their submission
to the Belarusian statistics authorities
Services related to IAS accounting and transormation
Accounting automation, implementation o inormation
technologies
Restoration o company accounting
Tax dispute resolution
Tax advice in complicated legal situations
Pre-trial settlement o tax disputes with the authorities
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Global employer and employee or individual
solutions
Assisting individuals in preparing tax returns
Registration with the tax authorities
Advice on various issues relating to employment
in Belarus
Tax advice on personal income tax and other obligatory
charges imposed on employees and employers
Tax advice to individuals on the application o the
relevant provisions o international double tax treaties
and on the interpretation o these provisions by the tax
authorities
Advice on legislative requirements with regard to oreign
nationals in Belarus, including obtaining and the
preparation o documents necessary or their stay and
work in Belarus
Tax and other services or banks, insurance and
other fnancial companies
Planning and establishment o nancial and holding
structures
Due diligence and assessment o risks
Advice on compliance with bank (or insurance company)
registration and licensing requirements; ollow-up
advisory assistance in establishing separate bank
departments
Advice on the determination o various tax aspects
o insurance activities, including orming, nancing,
investing, placing and using insurance reserves, etc.
Advice on regulatory acts regarding banking activities,
analysis o internal bank regulations and their
compliance with the principles and requirements
o Belarusian legislationAdvice on tax aspects o loans, securities, oreign
exchange and other bank operations
Consulting support in establishing the banks
subsidiaries, such as leasing/insurance companies
Other tax and legal advisory services in accordance with
the current legislation o Belarus:
- Minimization o the banks exposure to taxation
(application o international double tax treaties,
analysis o taxable base and tax calculations)
- Analysis o tax risks and other possible consequences
o applying the clients business structures and
assistance in introducing international compensation
schemes
International taxation
Advice on the application o double tax treaties
International tax planning aimed at improving business
eciency, reducing operating costs and managing
economic risks
Structuring o cross-border investments
Consultation regarding tax ecient international holding
structures
International tax planning presentations, workshops,
conerences, seminars, etc.
Assistance in setting up companies in oreign
jurisdictions
International cooperation with other Deloitte practices
ensures a direct and ecient transer o knowledge.
The Deloitte network has a worldwide database with
tax inormation covering more than 185 countries.
The international network o Deloitte tax proessionals
orms the undamental basis or providing high quality
consulting in all international tax matters.
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Country profle
Currency
The Belarusian national currency is the Belarusian
ruble (BYR). As o 1 January 2011, the National Bank
o Belarus established the ollowing ocial exchange
rates or major currencies:
BYR 3.000 or USD 1
BYR 3.999.30 or EUR 1
BYR 98.44 or RUB 1
There are some restrictions on oreign currency
exchange in Belarus. However, the Belarusian
government is taking steps towards liberalizing the
currency market.
Banking system
Banks dominate the Belarusian nancial market; as o
1 January 2011, there were 31 banks in Belarus. Most
Belarusian banks have oreign investors as shareholders,
although the state currently has a dominant share in the
charter capitals o the three biggest banks. It plans
to decrease the state share in these banks and to attract
oreign investments to meet the requirements or
an initial public oering (IPO). To date, the Belarusian
stock market remains largely undeveloped.
Belarus is located in Europe at the crossroads o both
west-east and north-south trade routes and links CIS
member states with the countries o Western Europe.
Belarus borders Poland, Lithuania, Latvia, Russia and
Ukraine.
The country has an area o 207,000 square kilometers
and a population o 9.5 million. 73% o the population
lives in urban environments, with almost one th living
in Minsk, the nations capital. Belarus is divided into six
regions and has two ocial languages: Belarusian and
Russian.
History and government
On 8 December 1991, in Viskuli (Brest region), the
leaders o the republics o the USSR, i.e. Belarus,
Russia, and the Ukraine ounded the Commonwealth
o Independent States (the CIS) leading to the
dissolution o the USSR. Minsk was chosen
as its administrative center, and Belarus became
an independent state. In 1994, a new constitution
was adopted and the rst president, an independent
candidate who did not belong to any political party, was
elected.
Belarus is a presidential republic, and legislative power
is vested in the Parliament, which is comprised o the
House o Representatives (110 members) and the
Council o the Republic (64 members). Currently, it is
dominated by supporters o the President. According
to the Belarusian Constitution, power is divided
among the legislative, executive and judicial branches
o government.
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Incentives or oreigninvestors
High Technology Park (HT Park)
Belarusian legal entities (including those with 100%
oreign investment) and individual entrepreneurs,
whose activities are concerned with the analysis,
development and sotware support o inormation
systems and data processing, can become members
o the HT Park in Belarus. The HT Park provides ull
exemption rom almost all taxes and duties, including
prot tax, VAT and real estate tax. What is more, the
technical equipment imported by HT Park residents into
the Belarusian customs territory is exempt rom customs
duties and VAT. An exhaustive l ist o such equipment has
been determined by the state authorities and includes
computers, as well as copying and acsimile devices.
The income paid to a oreign entity originating rom
an HT Park residents sources is subject to withholding
tax at a rate not exceeding 5%. The residents o the
HT Park do not pay oshore duty on the dividends paid
to their shareholders.
Belarus benecial geographical location has made it a
country with a high potential or oreign investment.
For a company planning to establish a production
or distribution unit in Eastern Europe, Belarus oers
a skilled and cheap labor orce, low price levels,
and a relatively well developed inrastructure. The
Belarusian government has established a special
program or attracting oreign investment, and the
protection o oreign investment is guaranteed under
the Investment Code. The code states that oreign-
owned companies have the same rights as local
businesses, as well as the right to repatriate prots
without any restrictions. Furthermore, Belarus has signed
bilateral agreements on the protection and promotion
o investments with many countries around the world.
Due to policies encouraging oreign investment,
investors may gain signicant advantages, such as tax
benets and exemptions rom certain obligations,
by investing in the Republic o Belarus.
Free Economic Zones (FEZs)
An FEZ is a part o a country with well dened borders
and a special legal regime that provides more avorable
conditions or business. Basically, the objective
o these zones is to attract and ensure the eective
use o oreign and national investments to create
and develop goods or export, and will be based
on the latest technologies, as well as the eective use
o available production space. There are 6 FEZs in the
Republic o Belarus.
The appeal o a special legal regime like an FEZ ora potential investor is preerential taxation. FEZ residents
pay reduced rates o certain taxes, including prot tax
at 12% and VAT at 10%. Prot received by FEZ residents
rom supplies o goods, work or services o their own
production is exempt rom prot tax and transportation
duty or a period o 5 years ater the prot in question
is generated. Moreover, FEZ residents do not pay real
estate tax on buildings located within FEZs.
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Tax benefts rom conducting business in rural
areas and small towns
Eective rom 2008, a special tax regime and
tax benets have been provided or both oreign
and Belarusian legal entities (including branches,
representative oces, separate subdivisions) and
individual entrepreneurs located/residing in rural areas
(as well as in small town centers and not included
on the list by the Council o Ministers o Belarus) and
carrying out business activities involving the manuacture
o goods, perormance o work or provision o services
in those or other rural areas or towns.
In certain cases, legal entities and individual
entrepreneurs may be exempt rom: prot tax and
personal income tax with regard to goods (work
or services) they produce themselves; real estate tax
on property located in rural areas; customs duties and
VAT (except VAT charged on goods imported rom the
Russian Federation) payable on production equipment,
as well as related spare parts and accessories imported
or the purpose o orming or increasing the legal entity
in questions charter capital.
The oreign and Belarusian legal entities mentioned
above are exempt rom the compulsory sale o oreign
currency in the amount o 30% or 5 years rom the
date o their registration. In addition, they may apply
ree pricing to those goods they produce which are sold
internationally. They may also independently determine
employee salaries and use the services o oreign
insurance companies.
Tax benefts or motorway services
Prot received by legal entities and individual
entrepreneurs rom supplies o goods (work or services)
through motorway service acilities (e.g., motels, hotels,
campsites, service and car washing stations, retail,
canteens) is exempt rom prot or personal income tax
or a period o 5 years ater the establishment o such
acilities. In addition, motorway service acilities are not
subject to real estate tax or a period o 2 years rom the
date trading activities start.
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Tax administration
The Belarusian Tax Code
General inormation
The General Part o the Tax Code came into orce on
1 January 2004. The Special Part o the Tax Code came
into eect on 1 January 2010.
Both parts o the Tax Code are eective rom 1 January
2010 but Acts previously adopted by the President
o Belarus regulating taxation issues still apply.
Types o taxes and duties
There are state as well as local taxes and duties
in Belarus. A number o special tax regimes are
mentioned in the Tax Code:
Tax applied under the simplied system o taxation
Unied tax or individual entrepreneurs and other
individuals
Unied tax or agricultural producers
Gambling tax
Lottery tax
Interactive electronic game tax
Duties or artisanal activities
Duties related to agro- and ecotourism services
The Belarusian system o taxation includes the
ollowing taxes and duties.
National taxes and duties:
Value-added tax (VAT)
Excise tax
Prot tax
Tax on the income o oreign entities not operating
in Belarus via a permanent establishmentPersonal income tax (PIT)
Real estate tax
Land tax
Environmental tax
Mining tax
Duties on the importation o ozone-depleting
substances
Duties on oreign nationals motor vehicles which travel
on Belarusian highways
Oshore duty
Stamp duty
Consular ee
State duty
Patent ees
Customs duties and ees
Local taxes and duties:
Dog tax
Resort levy
Vendor tax
In addition to taxes, there are also compulsory insurance
contributions to the Social Security Fund and RUE
Belgosstrakh and contributions to innovation unds.
Payers o taxes and duties
The Tax Code denes the payers o taxes and duties
in Belarus. The ollowing organizations are taxpayers:
Belarusian legal entities
Foreign and international organizations, including those
that are not legal entities
Simple partnerships (contract partners in joint activities)
The term individuals includes:
Belarusian citizens
Foreign citizens
Stateless persons
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Accounting and audit
Accounting
By 31 December each year, enterprises must ormulate
an annual nancial statement consisting o a balance
sheet, an income statement, a statement o changes
in shareholder equity and a cash fow statement.
According to domestic tax accounting rules, and
depending on a taxpayers accounting policy, income
in accounting and tax accounting is recognized on either
an accrual or a cash basis.
The accrual basis implies the recognition o income
at the time o the delivery o goods or services. The cash
basis involves the recognition o taxable income when
both events (delivery and payment) have taken place.
Obligatory independent audit
The ollowing entities are subject to an obligatory
annual independent audit:
Open joint stock companies
Banks and non-bank nancial intermediaries
Stock exchanges
Commercial organizations with oreign investments
Insurance companies and insurance brokers
HT Park residents
Legal entities that provide guaranteed repayment
o individual bank deposits
Other legal entities (excluding collective arms and
regular arms) and individual entrepreneurs whose
revenue or the preceding year exceeded EUR 600,000
Tax auditsThe Belarusian Ministry o Taxes and Duties
is responsible or levying taxes and duties. The local tax
authorities, which are subordinate to the Ministry, have
the right to perorm tax audits.
The local tax authorities may perorm both scheduled
and unscheduled audits o business entities. The
requency o scheduled/eld tax audits o a taxpayer (or
another liable person/entity) depends on the risk group
the audited person/entity is assigned to:
High risk not more than once in a calendar year; i no
violations are ound based on the results o a scheduled
audit, the next one will be perormed ater a minimum
o two years
Medium risk not more than once every three years;
i no violations are ound based on the results o an
audit, the next one will be perormed ater a minimum
o ve years
Low risk on an as-needed basis, but not more than
once every ve years
The criteria or assigning an audited entity to a certain
risk group are specied in the legislation.
Eective rom 2010 in Belarus is the principle o good
aith towards the audited entity. In particular, i there
is an ambiguous or unclear provision o the law,
decisions should be made in avor o the audited entity.
The legislation provides or a moratorium on audits
or two years ater the establishment o an entity (or
representative oces o oreign entities in Belarus).
However, despite these restrictions, there is a high risk
o the tax authorities perorming an unscheduled audit:
I the controlling/supervisory authority has inormation
(including that obtained rom a state authority,
a oreign state, another entity or an individual) giving
evidence o a violation o legislation being/having been
committed or o any threatening or inficted damage
Liquidation o the entity
Cross-audit o another legal entity
Where the tax authorities have inormation to suggest
that a business entity has not been conducting businessactivities or 12 consecutive months and has not
provided the tax authorities with a reason or this
To conrm the validity o setting-o or reunding
to the audited entity VAT that was excessively accrued
and charged on the sales o goods (work or services),
property rights
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Audits will be perormed or a period not exceeding
three calendar years prior to the year the audit takes
place. However, please note that this restriction does
not apply to audits o compliance with budget and
tax legislation; audits perormed by order o the
President o Belarus, the Presidium o the Council
o Ministers o Belarus, the Chairman o the State
Control Committee and his/her deputies, or the General
Prosecutor and his/her deputies; and audits perormed
as part o supervision over banking activities, including
on a consolidated basis.
According to Belarusian legislation, the duration o a
tax audit should not exceed 30 business days (although
an extension is possible). However, in practice, the
duration o a tax audit usually does not exceed 10
calendar days.
Inormation about scheduled audits can be ound
on the website o the State Control Committee
o Belarus www.kgk.gov.by
Oences, crimes and penalties
Administrative liabilities
The eective Belarusian Code o Administrative Oenses
(hereinater, the Administrative Code) sets out the
sanctions that may be imposed on taxpayers who
have broken the law. Typical violations committed
by taxpayers are listed below.
Late registration with the tax authorities is subject
to a ne o up to the equivalent o USD 58, or both
individuals and legal entities.
I a legal entity or an individual entrepreneur operates
without registering with the tax authorities, that legal
entity is subject to a ne o 20% o the income rom the
activities carried out while unregistered, but no less than
USD 815. An individual entrepreneur is subject to a ne
o up to USD 318.
Late notication o the opening or closure o bank
accounts with a delay o more than ve days. Any
account activity will entail a ne or individual
exceeding USD 233. In the case o a legal entity, this
ne will be USD 116, and will be increased by USD 116
or each ull or incomplete month o delay but will not
exceed USD 815.
Late ling o a tax return entails a ne o 10% o the
tax due on the return or both individual entrepreneurs
and legal entities, but not less than a ne o USD 32 and
USD 159, respectively.
Non-payment or partial payment o taxes within the
term determined by the legislation, results in a ne
o 20% o the unpaid tax or both legal entities and
individuals, but not less than USD 120 and USD 25,
respectively.
A tax agents ailure to withhold taxes entails a ne
o 20% o the tax due or individual entrepreneurs and
legal entities, but not less than USD 25 and USD 120,
respectively. The penalty can be increased up to USD
725 in cases o willul violation.
Late payment o tax is subject to a daily late payment
ne o 1/360 o the National Banks renancing
rate and, eective rom 15 September 2010, a ne
o 0.0292% per day applies.
Fines imposed or non-payment/non-withholding
o taxes may not be applied to taxpayers/tax agents who
have paid/withheld the ull amount o taxes due at the
beginning o the audit perormed by the tax authorities.
Criminal liabilityIn addition to tax and administrative nes and penalties,
Article 243 o the Criminal Code, On Tax Evasion,
provides or three years imprisonment or ordinary tax
evasion and three to seven years imprisonment or tax
evasion causing extensive damage to the state budget.
Because o the personal liability that may arise or tax
violations, good tax planning and careul compliance are
essential or achieving success.
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Types o business presence
Belarusian legislation provides or a number o dierent
legal orms through which businesses may operate.
A brie description o each o these legal orms has been
set out below.
The most common orms o conducting business
in Belarus or oreign companies are:
Representative oces
Legal entities
Registration requirements
Belarusian legislation requires that a oreign legal
entity registers its presence with the tax authorities i it
conducts or intends to conduct any activities in Belarus.
Representative ofces
Historically, representative oces (ROs) are established
in order to act as the eyes and ears o a oreign legal
entity (FLE), and do not lead to a taxable presence or
the FLE in Belarus. Currently ROs may be both taxable
(i the RO perorms the unctions o a permanent
establishment it qualies as a PE) and non-taxable.
The Belarusian Civil Code envisages the activities o an
RO as representing the interests o an FLE in Belarus
and perorming other unctions that do not contradict
Belarusian legislation.
According to the Belarus Tax Code, a PE is deemed
to exist where there is a separate subdivision
or oce through which a oreign entity carries out
entrepreneurial and other activities in Belarus, including
the ollowing:A place where products are produced or sold
A place where goods or property rights are sold, work
carried out or other services or activities are provided
An entity or individual that carries out activities
on behal o and/or or the benet o a oreign entity
and/or has and exercises the authority o the oreign
entity to conclude contracts or to agree upon essential
terms and conditions
Thereore, ROs are only taxable i they carry out
commercial or other similar activities in Belarus,
including negotiating and concluding contracts.
An FLE is not deemed to have created a PE i a
Belarusian legal entity or individual carries out activities
on behal o the FLE in question in the ordinary course
o its business activities.
Taxation o a commercial RO is very similar to that
o an ordinary Belarusian legal entity, with a ew minor
distinctions.
Opening an RO
The Belarusian Ministry o Foreign Aairs will issue
a permit to open an RO on the basis o the documents
provided (an application orm, copies o statutory
documents, etc.). The RO operates on the basis
o regulations approved by the head company, and
the head o the RO acts on the basis o a power
o attorney issued by the head company. The power
o attorney must be issued and legalized (or apostillized)
in accordance with established procedures.
The state duty to open a RO is equal to 65 basic
amounts (approximately USD 750) or one year.
According to Belarusian legislation, a RO must register
with the tax authorities, keep accounting records and
pay taxes in accordance with established procedures.
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Types o legal entities
The three most common types o legal entities under
the Belarusian Civil Code are joint stock companies,
limited liability companies and unitary enterprises. These
are regulated by the law On business entities and the
Civil Code, respectively. The establishment o banks and
insurance companies is regulated by separate legislative
acts.
Joint-stock companies
Joint-stock companies (JSCs) are dened as companies
whose capital is divided into a denite number
o shares. A JSC may be either open or closed, and
is deemed open i its shares are distributed to the
general public without permission rom other
shareholders. A JSC is deemed closed i the distribution
o its shares requires the consent o other shareholders,
and/or shares are distributed only to certain categories
o individuals. Both types o JSCs may issue privileged
shares o up to 25% o the statutory capital.
Open joint-stock company (Otkrytoe Aktsyonernoye
Obshchestvo, OAO)
An open jointstock-company (OAO) allows or
an unlimited number o shareholders. Subject
to disclosure requirements, an OAO is the only orm
o legal entity whose shares may be openly traded. The
minimum charter capital should be equal to 400 basic
amounts (approximately USD 4,600.)
Closed joint-stock company (Zakrytoe
Aktsyonernoye Obshchestvo, ZAO)
The most common type o JSC is a closed joint-stockcompany (ZAO). Shareholders enjoy preemption rights
to any shares oered or sale by a retiring shareholder.
There is no obligation to publish the accounts o a ZAO,
and shares are only distributed among its ounders
or within another predetermined group o individuals.
A ZAO may not hold an open subscription o shares
or an unlimited group o people. The minimum
charter capital should be equal to 100 basic amounts
(approximately USD 1,150).
Limited Liability Company (Obshchestvo
s Ogranichennoi Otvetstvennostyu, OOO)
An LLC/OOO is dened as a company, whose capital
is divided into ownership interests (units), the amount
o which is determined by the articles o association.
The number o members o an LLC/OOO should not
exceed 50.There is no established minimum amount
o charter capital.
An OOO (along with a unitary enterprise) is the most
fexible type o company. Units are not shares, and they
all outside the scope o Belarusian securities law. One
drawback o an OOO or minority participants is that
any participant has the right to withdraw rom the
company and is entitled to require the other participants
to purchase or redeem their units at a pro-rata value.
Unitary enterprise (UE)
A unitary enterprise is dened as a commercial
organization that has no ownership rights to the assets
transerred to the company by the owner o these
assets. This essentially means that the company is not
the owner o its property. A unitary enterprise may have
only one ounder.
Instead, the ounder o the company remains the owner
o the assets, which may not be divided into shares.
There is no established minimum amount o charter
capital. The simple management structure o this type
o entity oten makes it the vehicle o choice or oreign
investors.
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Formation requirements or companies with oreign
investments
According to the Belarusian Investment Code, the
minimum share capital that should be invested by a
oreign investor as the authorized share capital o a
company with oreign investments should be not less
than the equivalent o USD 20,000.
I one wishes to establish a joint venture with
a Belarusian investor, the minimum amount o the
statutory share capital should be more than USD
20,000. For example, a oreign investor could contribute
USD 20,000 and a Belarusian investor could contribute
USD 1,000 as their respective initial investments thereby
meeting the minimum requirements. Please note that
a oreign investor may contribute less than USD 20,000,
but the established company will not be regarded
as a company with oreign investments and, as such,
will not be able to enjoy certain privileges determined
by Belarusian legislation.
Under the existing law, in-kind contributions as wel l
as cash may be classied as capital contributions.
Registration procedure or a legal entity
Eective rom 1 February 2009, an application-based
principle o registration is applicable in Belarus.
Furthermore, the requirement or a minimum amount
o charter capital was abolished or all legal entities,
except or ZAO, OAO and companies with oreign
investments. The registration procedure includes the
ollowing stages:
State registration (including tax registration, registration
with the State Social Funds, the State Statistical Board,
etc.)
Stamp or seal production
Opening bank accounts
The registration authorities should decide whether
or not to register a legal entity on the day the
documents are submitted
Five days are now needed to obtain all o the
documents necessary or tax registration, registration
with the State Social Funds, Belgosstrakh, etc. Thus, the
whole process usually takes about 7 to 10 days. Joint-
stock companies are required to register their share issue
with the State Securities Commission and this increases
the time required or registration.
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National taxes
1. Proft tax
1.1. General inormation
Prot tax is levied on gross prot, which is determined
by adding the ollowing sums:
Prot rom the sale o goods (work or services) and
property rights
Income rom non-sales operations, including share
premium (minus the deductible expenses incurred
in connection with these operations)
The prot or loss rom the sale o goods (work
or services) or property rights (except or xed
or intangible assets) is dened as the dierence between
the receipts rom their sale, less sales taxes and duties
paid rom the receipts, and the deductible expenses
associated with the production and sale o goods (work
or services) or property rights.
The prot or loss rom the sale o xed or intangible
assets is dened as the dierence between the receipts
rom the sale o the xed or intangible assets, less
taxes and duties payable rom the receipts, and the
depreciated cost o the xed or intangible assets, as well
as the cost o the xed or intangible assets sold.
Non-sales income is oset by non-sales expenses and
then included into taxable prot. Non-sales income
includes, among other things, the ollowing:
Income rom participation in other organizations,
including dividends received rom oreign entities,
income rom the sale o shares and prot rom theliquidation o an investee
Positive exchange dierences
Income rom previous years recognized in the current
tax year
Fines, penalties and interest received or breaking
contractual obligations, and compensation or losses
recognized by the debtor or payable by the debtor
under a court ruling
Income rom granting the right to use intellectual
property i it is not the payers main activity
Interest on loans and deposits
Property (work or services) or property rights, received
ree o charge
Non-deductible expenses
There are some expenses that are related to business
activities but are deducted or prot tax purposes only
within the deductible limits determined by legislation.
These expenses include business trip expenses and
expenses associated with payments o energy resources.
Most expenses are deducted in ull or tax purposes,
including the costs o consulting, marketing, inormation
services, advertising and payroll expenses.
Expenses not related to commercial activities are not
deductible with regard to calculating taxable income.
The amount o prot (income) tax paid in a oreign state
may be oset against the amount o prot tax paid
to the Belarusian government, irrespective o whether
or not this oset is provided or by a relevant double
tax treaty. In order to receive the said oset, the
payer is required to submit a certicate conrming the
payment o tax in the oreign state.
1.2. Payers
According to the General Part o the Tax Code, the
ollowing types o organizations pay Belarusian prot
tax:
Belarusian legal entities
Foreign and international organizations, including those
that are not legal entities
Simple partnerships (contract partners in joint activities)
Branches, ROs and other separate sub-divisions o legal
entities, which have their own separate balance sheetsand bank accounts, carry out the tax obligations
o these legal entities.
1.3. Tax base
The tax base or prot tax is determined as taxable
income expressed in monetary terms.
Taxation o businessesin Belarus
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1.4. Tax benefts
The tax prot is reduced by tax benets which are
as ollows:
a -The amount o prot expended on capital investment
used or production purposes and or housing
construction, including repayments o bank credits
obtained and used or these purposes, as well as the
loans o non-residents o the Republic o Belarus taken
out under Belarusian legislation. The maximum amount
o this benet is limited to 50% o the gross prot
amount;
b -The amount o prot received rom operations
with state securities (short-term and long-term bonds,
promissory notes), as well as bonds issued by legal
entities who are Belarusian tax residents between 1 April
2008 and 1 January 2013
c -The amount o prot expended on donations
to enterprises, institutions and other organizations
involved in public health, public education, social
welare, culture and sports, which are registered with
and unded by the state up to a maximum o 5% o the
tax prot
Enterprises in which disabled individuals make up more
than 50% o the total workorce are exempt rom prot
tax.
1.5. Tax rate
The tax rate applied to the majority o taxable income
o organizations is 24%. A 12% rate is applied
to dividends and to income rom the sale o shares
in the charter capital (interest or stocks) o the entities
in Belarus or to any part thereo.
1.6. Tax period
The tax period or prot tax is a calendar year. Taxpayers
should submit a tax return to the tax authorities once
a year, by the 20th o March in the year ollowing the
previous tax period. Tax has to be paid in advance
by 22 March, 22 June, 22 September and 22 December
in 2011 and (eective rom 2012) by 22 April, 22 July
and 22 October in the current tax period and by 22
January o the year ollowing the previous tax period.
1.7 Loss carry-orward
The net operating loss that is accumulated at the end
o a year cannot be used to oset taxable income or
the ollowing year. Loss carry-orward rules are not
applicable in Belarus.
2. Value-added tax
2.1. General inormation
Value-added tax (VAT) is charged or the supply
o the majority o goods, services and property rights
in Belarus, and on most imports into Belarus.
2.2. VAT payers
VAT payers are as ollows:
Belarusian legal entities
Foreign and international organizations acting via
a permanent establishment in Belarus and registered
with the Belarusian tax authorities
Simple partnerships (contract partners in joint activities)
Trust managers with respect to sales turnover arising
in connection with the management o the trust
property on behal o the trustees and/or beneciaries.
Individual entrepreneurs whose turnover or theprevious three months exceeds the equivalent o EUR
40,000, or who voluntarily elect to pay VAT
Entities and individuals regarded as taxpayers
in relation to the handling o goods through Belarusian
customs in compliance with Belarusian legislation and
international treaties o the Republic o Belarus that
orm part o the international treaty ramework o the
Customs Union.
There are no special provisions or VAT registration
in Belarus. A company may only be registered as a
taxpayer with regard to all taxes.
The Deloitte network has
a worldwide database with
tax inormation covering
more than 185 countries.
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2.3. Turnover that is not subject to VAT taxation or is
exempt rom VAT
In general, the ollowing transactions are not subject
to VAT:
The supply o goods or services in Belarus or ocial
and personal use by diplomatic and/or administrative
and technical personnel rom oreign diplomatic
representative oces
Property contributions rom the legal entitys ounders
or participants to its charter und
Compensated and gratuitous transers o goods
or property rights by one owner
Property write-o due to orce majeure
Transer o property due to gratuitous use
Supply o goods placed under the re-export customs
procedure
Cost o work or services purchased or paid or by a
companys own employees
Major VAT-exempt activities include:
Commission ees or insurance brokers rom insurance
companies or brokerage services
Sale o securities (including initial oerings made
in accordance with legislative requirements), orward
and uture contracts, options and other concurrent
nancial instruments rom the derivatives market
Rendering medical services; the sale o certain
pharmaceuticals and medical equipment
Transers o industrial property rights
Housing and communal services provided to individuals
Communication services provided to individuals
Services provided by banks and non-banking nancial
institutions
Insurance (co-insurance, reinsurance) services
2.4. Rates
VAT is levied at the ollowing rates:
0% on goods exported to Customs Union member
states, including goods exported on the basis o lease
agreements/contracts, loan agreements and contracts
or the production o goods, loading, shipment and
transshipment, and other similar services directly
related to the sale o exported goods. 0% is also levied
on exported transportation services, exported work
or services related to the production o goods using raw
materials supplied by a customer, maintenance work
or services, modernization, the re-equipment o aircrat
and their engines, railway vehicle units or services
perormed or oreign companies or individuals. .
A rate o 0.5% is applied to the importation
o diamonds and other precious stones or production
purposes (international activity number 7102, 7103)
rom countries which are Customs Union members.
10% on the supply o goods produced through plant
growing (excluding fowers and decorative plants),
animal breeding (excluding animals used in ur
production), shery and honey bee production, and
on the importation and/or supply o oodstus and
goods or children in Belarus, in accordance with a list
determined by the President
20% on other goods and services not listed above
Moreover, the law establishes rates o 9.09% and
16.67% to be applied to goods sold at regulated retail
prices. I penalties are imposed on buyers or customers
or the violation o contractual terms these penalties
include VAT at the above rates.
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2.5. Tax base
Companies calculate their VAT base as the sale
price o goods, including excise, i applicable. For
commissioners and agents, the tax base is based
on commission or ee income. A shipping companys
VAT base is the amount o shipping ees in accordance
with a shipping contract. I a contractor sells
construction work perormed by subcontractors, the
VAT base or the contractor is the cost o the work
carried out by the contractor without subcontractor
costs. For imports, the tax base is the customs value plus
customs duty and excise where applicable.
I goods are sold at regulated retail prices that include
VAT, the VAT base will be the dierence between the
sale and acquisition price o these goods. Both the
sale price and acquisition price should include VAT. The
VAT base or the sale o securities, reusable packaging
and health resort vouchers, as well as imported
vehicles included in a list approved by the President,
is determined in a similar way.
The ree-o-charge transer o goods (provision
o services or execution o work) is also subject
to VAT, except or non-taxable transers. The tax base
is determined as the cost price o the goods (work
or services) in question, or as the acquisition price in the
case o a ree-o-charge transer o acquired goods.
The VAT base or goods imported into the territory
o the Republic o Belarus is the total o their customs
value and the applicable customs and excise duties (or
goods that are subject to excise duties). I processedgoods are exported rom the customs territory, the VAT
base is determined as the cost o their processing.
2.6. VAT output, VAT input and oset rules
The invoice method o calculating VAT liabilities
is applied in Belarus. The VAT liability o a taxpayer
is calculated as the product o the tax base and the
tax rate. VAT payable to the authorities is determined
as the dierence between VAT calculated by taxpayers
and charged to customers (output VAT) and VAT
paid to suppliers o goods (work or services) (VAT
invoiced to taxpayers or input VAT), which is related
to production/sales activities, or other VAT-able
transactions.
I input VAT exceeds output VAT, the payer is not obliged
to pay VAT, and the dierence is carried over, without
penalty, and is either deducted rom the tax liability
in the next period, or reunded to the payer.
Input VAT on purchased business supplies is generally
recoverable when the supplies are received, or when
customs VAT is paid and accounted or in the book
accounts. Nevertheless, legal entities that operate on a
cash basis (i.e. whose prot is accounted or according
to the accounting policy when both delivery and
payment have taken place) can only oset previously
paid VAT.
VAT is recoverable on the basis o primary documents
(customs declarations, waybills, delivery/acceptance
certicates) that indicate VAT invoiced by suppliers and
to be paid to them.
Organizations that do not carry out any entrepreneurial
activities in Belarus should include input VAT amounts
into the cost o purchased goods (work, services and
property rights).
I the purchased goods (work, services or property
rights) are used in production and/or i tax-exempt
goods (work, services or property rights) are sold, the
VAT paid upon the purchase should be included into the
taxpayers deductible expenses.
One o two VAT oset methods may be used
by taxpayers in their accounting policy: the separate
accounting method or the VAT-able supply ratiomethod.
Starting rom 2011, taxpayers are allowed to oset VAT
paid on xed and intangible assets in the previous tax
period, in the current tax period. These amounts are
to be oset in equal portions o one twelth in every
reporting period (i a calendar month is recognized
as the reporting period) or one quarter (i a calendar
quarter is recognized as the reporting period). However,
VAT rom previous tax periods may be oset in ull.
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2.7. Import VAT
VAT is collected by the customs authorities when goods
are imported into the customs territory o the Republic
o Belarus. VAT on goods imported into Belarus rom
Customs Union member states is collected by the
Belarusian tax authorities. Depending on the type
o goods imported, VAT is applied at a rate o either
10% or 20%.
Certain goods may be exempt rom import VAT. These
include, among other things, goods and cash registered
as oreign aid, goods or ocial use by oreign
diplomatic representatives (or or personal use by their
diplomatic and/or administrative and technical
personnel) who are non-residents, equipment or
research activities, and certain vehicles, in accordance
with the Presidents List.
2.8. Payments and fling tax returns
The standard VAT period is a calendar year; the VAT
reporting period is a calendar month or a calendar
quarter at the taxpayers own choice. A VAT return
is due by the 20th o the month ollowing the reporting
period, and the tax is calculated based on the amount
o tax accumulated rom the beginning o the year.
VAT is payable by the 22nd o the month ollowing the
reporting period.
International cooperation with
other Deloitte practices
ensures a direct and efcienttranser o knowledge.
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3. Excise Tax
3.1. Taxpayers
The ollowing entities are excise tax payers:
Belarusian legal entities
Foreign and international organizations, including those
that are not legal entities
Simple partnerships (contract partners in joint activities)
Individual entrepreneurs
In certain cases individuals upon importing goods into
Belarus.
Branches, representative oces and other separate
sub-divisions o legal entities with their own separate
balance sheets and a current, settlement or other bank
account must calculate and ulll the tax liabilities
o legal entities.
3.2. Objects o taxation
Excise tax is imposed on both imports and the
manuacture o a specic list o goods, the primary
categories o which include:
Alcohol, spirits, beer, cider, tobacco
Oil or diesel and/or petrol engines
Petrol, diesel
Automobiles and minibuses
Fixed rates are applied to these goods.
Exports o excisable Belarusian goods are exempt rom
excise tax.
Excise duty is accrued on a monthly basis on the saleamount o excisable products which are manuactured
and/or imported, and used or companies own
purposes (e.g. or testing and sampling purposes).
Excise tax is payable on a monthly basis by the 22nd day
o the ollowing month.
Certain excisable goods may only be sold in Belarus
i they bear a special excise stamp. Certain alcohol and
tobacco products require an advance payment in the
orm o an excise stamp, which must be attached
to each item prior to its sale. The stamps are purchased
rom the tax authorities on a prepayment basis at the
cost o BYR 100 (approx. USD 0.033) per stamp or
alcohol products and BYR 40 (approx. USD 0.013) per
stamp or tobacco products.
4. Property tax
4.1. Taxpayers
The ollowing entities pay property tax:
Belarusian legal entities
Foreign and international organizations, including those
other than legal entities
Simple partnerships (contract partners in joint activities)
Individuals
Branches, representative oces and other separate
sub-divisions o Belarusian legal entities which have their
own separate balance sheets and have bank accounts
that were opened by the legal entity and whose ocials
have the right to manage these bank accounts, must
calculate the amount o taxes, duties and/or ees on the
taxable items and discharge the tax liabilities o the legal
entities in question.
Please note that a legal entity is considered to be
a taxpayer i it is acting as a lessee under a lease
contract and i the contract in question is signed
by a oreign legal entity that does not act through
a permanent establishment in Belarus, or with a oreign
individual.
4.2. Objects o taxation
The tax is imposed on the residual cost o production
and non-production buildings that are owned or are
in the possession o the taxpayer, and on the cost
o building work and construction in progress, within
the timerames set out in the design and estimate
documentation.
4.3. Tax rate
The annual property tax rate is 1%: or legal entities and
0.1% or individuals. A 2% rate is applied to the cost
o projects o above-standard construction in progress
i the organization is building the real estate itsel.
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4.4. Tax allowances
The tax is not imposed on:
Buildings and acilities designated or social or cultural
use, as well as those which orm part o the
housing portolios o local Councils o Deputies and
other organizations (excluding those that belong
to organizations based in residential buildings containing
a number o fats, where these buildings do not house
individual residents)
Buildings and structures that have been temporarily put
out o operation
Buildings and structures designed to protect the
environment and/or improve environmental conditions,
as specied by the President
General-purpose roads including roads with drains,
pavements, articial constructions, and street urniture
to organize road trac and associated inrastructure
Agricultural buildings and structures used to grow crops,
or bee-keeping or or animal husbandry
New buildings and structures belonging to an
organization that were rst put into service within a year
o being commissioned.
4.5. Payments
Tax is calculated annually or legal entities, subject to the
existence o buildings and structures, as o 1 January
o the respective calendar year. This is based on the
residual cost and the cost o buildings and structures
o above-standard construction in progress, and the
approved annual tax rates. Tax or individuals is set
according to an assessment o the buildings by the
President.
Legal entities should pay tax on a quarterly basis and
in our equal installments by the 22nd day o the rst
month o each quarter.
The amount o real estate tax paid to a oreign state
may be oset against the amount o real estate tax paid
to the Belarusian government, irrespective o whether
such an oset is provided or by a relevant double tax
treaty or not. In order to receive this oset, taxpayers
are required to submit a certicate conrming the
payment o tax to the oreign state in question.
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5. Environmental tax and mining tax
5.1. Taxpayers
The ollowing entities are payers o environmental and
mining tax:
Legal entities
Owners o production waste
Individual entrepreneurs
5.2. Objects o taxation
The ollowing items are subject to this type o taxation:
Volume o air pollution emissions
Volume o sewage water and environmental pollutants
Volume o production waste subject to storage and
underground disposal
Volume o material harmul to the ozone layer (including
that contained in products) imported into Belarusian
territory
Volume o extracted or processed natural resources
Ozone-destroying materials imported into Belarusian
territory are taxable at the rate o BYR 23,000
(approximately USD 7) per kilogram o harmul ozone
material (including that which is contained in products.)
The environmental tax and natural resource extraction/
processing tax rates are determined pursuant to the
Appendices to the Special Part o the Tax Code o the
Republic o Belarus.
The co-ecient is determined or environmental tax
rates in amounts varying rom 0.006 to 0.9, depending
on the type o waste. The limits (volumes) o permissible
environmental pollutants and extracted/processed
natural resources are subject to restrictions. I the
set limit is exceeded, or the extraction (procession)o natural resources is carried out beyond the limits
(volumes) determined by the eective legislation, tax
o ten times the determined rate must be paid.
6. Land tax
Both Belarusian and oreign legal entities and individuals
that have been granted lietime ownership rights
to plots o land in Belarus with hereditary succession,
or permanent or temporary use o the land, or to whom
land has been transerred into private ownership, are
deemed to be payers o land tax.
The object o land tax is a plot o land that is owned,
held or used by the taxpayer.
The amount o land tax on agricultural land
is determined based on the cadastral value o the
plot o land and is established as an annual xed
payment per hectare o the plot o land; i the cadastral
value is not established, the agricultural land tax rate
is calculated in the amount o the average rate o the
land tax determined or every region.
The amount o land tax on populated land is calculated
in percentage terms, based on the cadastral value o the
plot o land, depending on the use o the land and
subject to the category o the respective locality.
The amount paid on leased plots o land is specied
in the relevant contract.
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7. Simplifed system o taxation
Both legal entities and individuals may qualiy or
the simplied system o taxation within a particular
calendar year, provided that they meet the criteria below
throughout the year:
Total headcount is not in excess o 100 employees
on average
Total gross revenue is not in excess o BYR 3.09015
billion
The simplied system o taxation replaces the ollowing
taxes and payments: corporate income tax, property tax,
land tax, environmental tax, natural resource extraction/
processing tax, services tax, inrastructure development
duty and value-added tax, where total headcount does
not exceed 15 employees and total revenue does notexceed BYR 1.1772 billion.
The tax base is the gross revenue, comprising the
proceeds rom goods (work and services) property rights
and non-operating revenue over the reporting period.
Subject to certain conditions, retail enterprises and
public catering companies are entitled to use taxable
income as their tax base.
The tax rates are as ollows:
8% or non-VAT payers (both legal entities and
individual entrepreneurs)
6% or VAT payers (both legal entities and individual
entrepreneurs)
3% applicable to revenue rom goods sold and services
rendered outside o Belarus
15% or retail enterprises and public catering companies
(both legal entities and individual entrepreneurs)
Deloitte tax consulting
services cover all o the tax
matters that aect companies
and individuals, irrespectiveo their size or sphere
o activity.
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Other taxes
1. Oshore duty
1.1. Oshore duty payers
According to the General Part o the Tax Code, the
ollowing types o organizations pay Belarusian oshore
duty:
Belarusian legal entities
Foreign and international organizations, including those
that are not legal entities
Simple partnerships (contract partners in joint activities)
Branches, representative oces and other separate
sub-divisions o legal entities with their own separate
balance sheets and a current or other bank account.
1.2. Objects o taxation
The ollowing transactions are subject to oshore duty:
Transers o monetary unds by a resident to a
non-resident in an oshore zone or to another
company, to which an oshore resident has obligations,
or into an oshore bank account
Non-cash settlements with any non-resident
Transers o property rights and/or obligations between
parties, one o whom is a resident o the Republic
o Belarus and the other a non-resident registered in an
oshore zone
Oshore duty does not apply to the ollowing
transactions:
Transers o monetary unds by the state authorities
in order to discharge Belarusian obligations
to international organizations, in accordance with
international or intergovernmental agreements
Transers o monetary unds rom Belarusian banks
by VISA and MasterCard transactions to non-residents
or owners o international payment systems who are
registered in oshore zones or who have bank accounts
in these zones.
Transers o monetary unds to repay credit, loans and
interest
Transers o monetary unds in accordance with
contracts to transport goods by sea
1.3. Tax rate
The oshore duty rate is 15% o the transerred sum.
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Belarusian-sourced incomeo oreign companies
Elimination o double taxation
The Republic o Belarus has signed more than 60
international double tax treaties providing or a lower
tax rate or ull tax exemption. Where there is no valid
double tax treaty, Belarusian tax legislation permits
prot tax and real estate tax paid in oreign countries
to be oset against the payment o the relevant taxes
in Belarus.
In order to take advantage o a lower tax rate or tax
exemption in accordance with an international treaty,
prior to payment the oreign company must provide
the Belarusian tax agent with conrmation o their
tax residency, signed by a competent authority in the
oreign country. The Belarusian tax authorities may
also require a Belarusian or a Russian translation o the
conrmation.
I this conrmation is not provided prior to payment,
and the oreign company suers a withholding rate
greater than that stipulated by the agreement, it is
possible to apply or a reund within three years
o making the payment. In theory, upon receiving the
proper documentation, the Belarusian tax authorities
should reund any excess tax no later than one month
ater the application date.
Special provisions allow oreign banks and airlines
to bypass the residence conrmation requirements,
provided that they have a copy o an extract rom the
international publications The Bankers Almanac,
The International Bank Identier Code, or The Airline
Coding Directory.
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Withholding tax
Withholding tax on the income o oreign legal entities
that do not operate in the Republic o Belarus through
permanent establishments is compulsory - particularly
on the ollowing types o Belarusian-sourced income or
oreign entities that are resident in Belarus:
Dividends 12%
Income rom the disposal o shares in charter capital,
stocks and/or interest o legal entities located in Belarus
12%
Royalties (including payments or leased property)
15%
Licenses 15%
Interest 10%
Freight (charges or international shipping and
orwarding services, except or international
transportation by sea) 6%
Other income - 15%
For tax purposes, royalties include payments or the
use o or granting the right to use property and rights
to copyrighted items, including literary and scientic
works, computer programs and other copyrighted work.
This also extends to objects o allied rights, including the
creation o soundtracks to programs by broadcasting
companies, as well as payments or any license, patent,
trademark, service mark, business name, drawing, utility
model, diagram, ormula, industrial standard or process.
Equally included are payments or any inormation
regarding industrial, commercial or scientic research
(including know-how), payments or the use o property
in Belarus or or granting the right to use such
property. Excluded are payments made or international
(continental and intercontinental) channels and leasing
telecommunications networks.
Other types o income include, among other things,
income derived rom training services, inormation,
management, advertisement, insurance and audit
services, and income derived rom the disposal o real
estate located in Belarus.
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Taxation o individuals
Personal income tax in Belarus
Payers
According to the law, individuals are regarded
as personal income tax payers.
Belarusian citizens and oreign nationals who are tax
residents are taxed on their worldwide income paid
in cash or in kind, and on any material benets received
during a calendar year.
Individuals who are not considered to be tax residents
o Belarus (the duration o their stay in Belarus is 183
days or less) pay tax on their Belarusian-sourced income
only.
The actual duration o stay is the period o time
an individual stays in Belarus, and is not interrupted
by trips abroad or medical treatment or business trips.
Payroll taxes
Payroll taxes resulting rom employment or civil
contracts include the ollowing:
Personal income tax (PIT)
Payments to the Social Security Fund
Payments to RUP Belgosstrakh
The employer should calculate, withhold and remit PIT
to the government on behal o the employee.
Payments to the Social Security Fund are made by the
employer (34%) and the employee (1% o their salary,
including other remuneration paid by the employer).
Payments to Belgosstrakh are made by the employer
at rates varying rom 0.1% to 2.4% o the gross payroll.
Personal income tax rates
A fat rate o 12% is applied in Belarus both to tax
residents and to those not regarded as tax residents.
Other rates apply to specic income:
9% - Income received by individuals rom residents
o the HT Park under labor contracts (except or support
personnel who service and guard premises, rooms
or plots o land)
15% - Income rom entrepreneurial and private notary
activities
Taxable income
Taxable income is dened as any and all income,
irrespective o the source, less allowable tax deductions
(standard, social, property and proessional).
There are limited types o income that are tax-exempt
in Belarus:
Pecuniary aid paid by the employer that is the taxpayers
principal place o employment is exempt rom tax at the
rate o 150 basic amounts (approximately USD 1,700)
during the year, or 10 basic amounts (approximately
USD 110) during the year i paid by other employers
Monetary unds received rom individuals who are not
individual entrepreneurs totaling 500 basic amounts
(approximately USD 5,650) rom any source within the
tax period as a result o git and immovable property
under a rental contract
Income received by way o inheritance
Income rom the state securities o Belarus and bonds
issued by banks
Income in the orm o interest received on bankaccounts and deposits with a bank situated in Belarus
It is the responsibility o the individual to declare his/her
income and to pay PIT to the authorities.
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Deloitte tax consulting
services cover all o the tax
matters that aect companies
and individuals, irrespective
o their size or sphere
o activity.
Tax returns
Individuals must calculate their PIT liability and le
a tax return/declaration in the prescribed ormat i the
ollowing applies:
(a) Income has been received rom other individuals who
are not approved tax agents
(b) Income has been received by the tax resident rom
sources based abroad
(c) Other income withholding o PIT which is not
charged by the tax agents; and income received
in certain other cases.
Filing procedures
An individual who must le a tax return/declaration
is required to do so no later than 1 March o the
ollowing tax year. The tax return should be submitted
to the local tax authorities. In the tax return, the
taxpayer must report all income received in the taxable
year and speciy every item, source, amount and date.
Social and property deductions may be made either
by the employer (during the tax period) or by the tax
authorities (at the time o ling the tax return). Taxable
income is taxed at the rates listed above.
Belarusian tax liabilities are payable by 15 May o the
year ollowing the tax year. Any overpaid tax may
be reimbursed (although this is dicult and time-
consuming in practice) or credited against any uture
tax liability, but only with regard to amounts overpaid
during the previous three years.
Elimination o double taxation
Belarus has signed a number o bilateral double tax
treaties, which, under certain conditions, enable
individuals to avoid taxation o the same income under
the tax systems o two or more countries by way
o application o tax exemption in one o the countries
or through a reduction in the tax rate.
Thereore, according to national legislation, personal
income taxes paid in oreign countries may be credited
against Belarusian PIT, provided that the documents
conrming the amount o taxes paid into oreign
budgets are shown to the Belarusian authorities.
In other words, a taxpayer may avoid double taxation
without needing to ollow the application procedure
or international tax treaties. Proper allowance must
be made or the act that the amounts o tax paid
into a oreign budget cannot exceed the amount
o tax calculated rom the income in accordance with
Belarusian legislation.
Penalties
Individuals who ail to submit tax returns on time, pay
taxes, or who avoid the payment o taxes, are subject
to administrative and criminal liabilities.
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Customs issues
Import duties
Eective rom 1 January 2010, the rates o import
customs duties are set in accordance with the Unied
Customs Tari o the Customs Union o the Republic
o Belarus, the Republic o Kazakhstan and the Russian
Federation. The most commonly applied customs duties
rates are ad valorem, and are calculated as a percentage
o the customs value o the goods. In addition, customs
duties may be set at xed rates per unit o measurement
o goods (specic rates). A combination o both
methods is also allowed (combined rates).
Import customs duty rates depend on the classication
o the imported goods under the Unied Trade
Classication o Foreign Economic Activities o the
Customs Union. However, customs duty rates may
vary depending on the country o origin o the
goods and on certain other actors. For example,
with respect to goods originating rom developing
countries (Customs Union users o the Unied System
o Customs Preerences), the import customs duty rate
applied is 75% o the usual import customs duty rate
in accordance with the Unied Customs Tari. The list
o countries using the Unied System o Customs Union
Tari Preerences and the list o goods originating
rom developing or least-developed countries that are
granted tari preerences when imported into member
countries unied customs territory are determined
by the Customs Union Commission.
On 1 July 2010, the unied customs territory with Russia
and Kazakhstan was created. A unied economic area
is planned or the middle o 2011.
Export duties
A limited number o goods, e.g. uels and marine
products, are subject to export duties upon their
exportation outside the borders o the Eurasian
Economic Community.
Special customs procedures
The Customs Code o the Customs Union provides or
17 customs procedures.
A number o special customs procedures grant either ull
or partial relie rom customs duties. For example, ull
relie may be granted or goods that are imported into
the Customs Territory or processing and subsequent
re-export (Processing in the Customs Territory). Import
duties are not payable unless the conditions o this
procedure are violated.
A similar procedure may also be applied to goods that
are exported rom the Customs Territory or processing
and subsequently re-imported. Under this procedure
(Processing outside o the Customs Territory), relie
is granted or goods placed under the procedure o issue
or domestic consumption. Import duties are, thereore,
calculated based only on the value which has been
added to the goods outside the Customs Territory (i.e.
the processing element.)
Goods may also be registered under the temporary
import (allowance) procedure.
As the name suggests, this allows or either ull or partial
relie rom import duties and taxes or goods that are
temporarily imported into the territory o the Customs
Union. Henceorth, non-tari regulation measures
do not apply to these goods.
Certain goods may not, however, be eligible to be
listed under the temporary import procedure. Once thespecied time limit (typically two years) has expired,
the goods must either be exported rom the customs
territory or placed under a dierent customs procedure.
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Currency control issues
Currency control
Both residents and non-residents o Belarus are
permitted to have oreign currency and ruble accounts
with authorized banks.
The Currency Control Law separates transactions
involving oreign currency and securities in oreign
currency into two groups:
Current currency transactions, which have ewer
restrictions
Currency transactions associated with the movement
o capital, which may require permission rom the
National Bank o Belarus (the NBRB)
The eective legislation provides a closed list
o current currency transactions:
Settlements related to exported and/or imported goods
(except or monetary unds, securities and real estate),
proprietary inormation, exclusive rights to the results
o intellectual activity, work or services
Settlements related to leasing out property or acquiring
property under lease
Transer and receipt o dividends and other investment
income
Non-trading operations:
- Transers and receipt o unds or the payment
o wages and salaries, stipends, pensions, alimony,
state benets, allowances and compensation, as well
as disbursements or damages
- Transers o unds or the purpose o reimbursing
expenses in connection with employee business trips
abroad
- Transers and receipt o inherited unds and undsreceived rom selling inherited property
- Transers and receipt o unds related to the death
o citizens, including transportation and other burial
expenses
- Receipt o monetary compensation or the victims
o political repression, as well as members o their
amilies and their heirs
- Payment o unds in order to maintain Belarusian
diplomatic missions and consular institutions abroad
- Receipt o unds by judicial and arbitration
authorities, including notaries, investigation and other
law enorcement agencies in connection with the
above authorities
- Receipt o unds in connection with court rulings and
other procedural documents
- Transer o membership ees to public, religious
or international organizations as well as other
obligatory payments or participation in international
organizations
- Transer and receipt o Belarusian rubles, oreign
currency, transer and receipt o other oreign
currencies under git contracts, including donations,
in compliance with Belarusian legislation
- Residents taking currency valuables received rom
non-residents into custody
- Payment o taxes and other compulsory payments
envisaged by the legislation o Belarus or other
countries
- Transers o unds or duties and other payments
to patent authorities
- Transers and receipt o unds in connection with
participating in conerences, seminars, sporting
events, exhibitions and airs
- Repayment o unds transerred due to an error
- Other transactions listed by the President o Belarus
or, upon the Presidents initiative, by the Belarusian
Council o Ministers, including those envisagedby international treaties ratied by Belarus
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Currency transactions associated with the
movement o capital
Currency transactions associated with the movement
o capital include currency transactions between
residents and non-residents, other than those classied
as current currency transactions.
Residents may perorm currency transactions associated
with the movement o capital on the basis o the
National Banks permits, except as otherwise expressly
stipulated by legislation. The transactions below require
permits:
Acquisition o shares to be distributed among the
ounders, and acquisition o a share in the statutory
und or in a non-residents property
Acquisition o securities rom non-residents, as issued
by non-residents, except or the acquisition o shares
to be distributed among the ounders
Acquisition o property outside o Belarus and treated
as real estate under Belarusian legislation
Placing money in a non-residential bank account
or transerring money to non-residents (other than
to non-resident banks) under a trust management
contract
Extension o loans
Settlements relating to the liabilities o subjects/
residents o currency transactions (other than banks)
to non-residents under suretyship or guarantee
agreements concluded between them
Receipt o credit and/or loans or a period o over 180
days, providing that at least one o the conditions below
is met:
- The interest rate or a credit and/or a loan exceedsthe limit set by the Board o Directors o the National
Bank (14% per annum or currency transactions
in USD and EUR and the renancing rate o the
relevant central or national bank, eective as o the
date o receiving a credit and/or loan by the currency
transaction subject-resident, increased by 5%)
- The interest rate or a credit and/or loan in case
o a delay in the repayment o a credit and/or a loan
(in the amount o the increase in the interest or the
delay in repayment o the credit and/or loan) and the
penalty amount in total exceed 0.01% or each day
o delay (3.65% per annum). To work out this rate, the
penalty amount should be expressed as a percentage
i it is expressed as a xed amount in the contract.
- Apart rom the interest rate or a credit and/
or a loan, the agreement between a currency
transaction subject or resident (except or a bank)
and a non-resident (except or a non-resident bank)
provides or additional payments, except or the
interest rate on delays in repaying a credit and/or
a loan (in the amount o the increase in the interest
or the delay in repayment o a credit and/or loan
as well as payments related to paying the penalty)
- A credit and/or a loan is used to ulll a residents/
borrowers monetary obligations not through their
bank account
- Obligations related to the repayment o a credit
and/or a loan are not ullled through the borrowers
account
- A creditor or a lender is registered with the state
register o the country (in the country) in which
a preerential tax regime applies and/or which
permits the non-disclosure o inormation on nancial
transactions (oshore zones)
Settlements relating to the obligations o a currency
transaction subject/resident (except or a bank) and to a
non-resident based on a duly concluded agreement
on the assignment o a debt or claim
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The law On currency regulation and currency control
contains a list o currency transactions related to the
movement o capital that do not require permission
rom the National Bank.
Banks and customs authorities are responsible or
controlling the correct and timely payment o costs
and the receipt o goods or services under export and
import contracts, regardless o the currency used in the
settlement.
Obligatory conversion o export revenue
Belarusian legal entities are currently required to convert
30% o their oreign currency export revenue into
Belarusian rubles by selling through authorized banks
within seven working days o receipt.
Purchase o oreign currency
Currency transaction subjects may purchase oreign
currency, on the ollowing conditions:
Currency transaction subjects/residents may only
purchase oreign currency on the exchange market
via a designated bank (i.e. the bank with which
the residents in question have opened an account
specically intended or the receipt o oreign currency
purchased on the Belarusian internal exchange market,
or any other account whatsoever specically opened
in order to make bank transer transactions related
to purchasing, selling or converting oreign currency)
Currency transaction subjects/residents may purchase
oreign currency on the o-exchange market:
- rom a designated bank (i.e. the bank with which
the residents in question have opened an account
specically intended or the receipt o oreign currency
purchased on the Belarusian internal exchange
market, or any other account whatsoever specically
opened in order to make bank transer transactions
related to purchasing, selling or converting oreign
currency); or
- rom a selling bank.
As there is instability in the Belarusian currency
market, the National Bank may introduce limitations
on purchases o oreign currency or the settlement
o import contracts.
Deloitte oers a wide range
o services and is able
to deploy experienced
proessionals with extensive
knowledge and specializedskills to work or clients
across a wide range o sectors.
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Payments or imports
Please note that the NBRB currently prohibits
advance payments under oreign economic contracts
involving import transactions. This prohibition applies
to Belarusian rubles as well as to oreign currency.
An exception is made or importers acquiring raw
materials under the terms o an advance payment
or the urther production o export-oriented goods.
Eective rom 15 January 2009, these importers are only
entitled to make advance payments using their own
export proceeds in oreign currency. Advance payments
may also be made rom loans.
In other cases, advance payments made to a
non-resident rom a Belarusian bank account may only
be perormed i the importer has permission rom the
NBRB. In order to obtain permission rom the NBRB,
an importer should submit an application orm rom
the Belarusian Council o Ministers and a copy o the
oreign trade contract. The NBRB is entitled to request
additional documents related to the transaction.
Enorcement o currency regulations
Belarusian legislation provides or penalties or any
breach o currency regulations, both or the individual
carrying out the transaction and the Belarusian bank
that, as a currency control agent, is obliged to ensure
compliance with legislation. The range o penalties
includes the ollowing:
Penalties up to a maximum o 100% o the value o the
transaction in question
Invalidation o any licenses or permits previously
issued by the currency control authorities to both the
participant and the bank involved
Currency control measures include the ollowing:
Settlements relating to transactions between Belarusian
residents (including companies with oreign investments)
may only be conducted in Belarusian rubles, with a ew
exceptions.
Settlements between residents and non-residents
o the Republic o Belarus may be perormed in a reely
convertible oreign currency or in Belarusian rubles.
There are also strict rules relating to oreign currency
held in cash when the use o cash is possible.
Furthermore, there are limitations on the amount
o oreign currency that a company may keep in its cash
oce.
Anti-money laundering legislation provides or additional
measures to be taken by the authorities in order
to prevent illegal operations. These measures include the
registration o suspicious transactions, communication
o inormation to the tax authorities and other special
bodies, inspections and audits o suspicious transactions
by