The tax system of Belarus is constantly improving in its simplification, in reducing the tax burden on business. The state together with the business community is working on proposals to improve tax legislation, it is planned to create a separate structure – the Public Advisory Council on Tax Policy under the Ministry of Finance. The main act of tax legislation is the Tax Code (TC), which has a General and Special parts.
Belarus has a General tax regime and special tax regimes.
The General procedure provides the payment of the following republican taxes, fees (duties) and local taxes and fees:
Republican taxes, fees (duties):
– value added tax:
20% – general rate;
0% – at the sale of goods placed under the customs procedure of export, the works on their support, etc.; exported transport services; re-equipment of aircraft, railway rolling stock, for foreign entities; the goods of own production in duty-free trade; the goods in retail trade through the store; export of goods outside the Eurasian Economic Community within 3 months from purchase; the maintenance services provided directly at the airports and airspace; repair and maintenance of vehicles registered in foreign countries, etc.
10% – at the sale of the plant growing, beekeeping, animal husbandry products made in the territory of Belarus; import and (or) sale of food products and goods for children according to the list;
9.09% or 16.67% – at the sale of goods at regulated retail prices, including value added tax;
25% – at the sale of telecommunication services.
– excise duties (rates are set by the Annex to the Tax Code and depend on the category of goods);
18 % – general rate;
10% – in case of sale of high-tech goods of own production; also used for science and technology parks and their residents;
25% – for banks and insurance companies;
– income tax of foreign organizations that do not operate in Belarus through a permanent representation:
15% – general rate;
12% – dividends and related income; income from disposal of shares in the authorized fund (shares, shares) of organizations located in Belarus;
10% – income from debt obligations of any kind;
6% – income from international transportation;
5% – on dividends, income from debt obligations, royalties, if the source of payment of such income is a resident of the Hi-Tech Park;
-income tax of individuals (13% of the general rate),
-real estate tax:
1% – for organizations;
2% – in the presence of the objects of incomplete construction at the organizations;
0.1% – for individuals;
0.2 % – in the presence on the property right from two premises at physical persons.
-land tax (rates are set as a percentage and as a fixed payment per hectare and vary depending on the categories of land);
– environmental tax (rates are set in rubles according to the Annex to the Tax Code);
-tax on extraction (withdrawal) of natural resources (rate depends on the type of natural resources);
– fee for passage of motor vehicles of foreign countries on public roads (rate depends on the type of motor vehicle and its permissible total weight);
Local taxes and fees:
-dog ownership tax (depending on the danger of the breed, in basic values)
-resort fee (rate not more than 5%)
-harvesting fee (rate not more than 5%)
During import of goods (services) customs duties are subject to payment, according to the International Acts of the Eurasian Economic Union (EurAsEC) they are:
-import customs duty (rates are determined according to the Common customs tariff of the Eurasian Economic Union applicable to the goods imported to the territory of the EurAsEC);
-VAT at the rate of 20%;
– excise duties (fixed and interest rates are set, they are the same for imported goods and for the goods produced in the territory of Belarus; set in respect of: alcohol, alcohol-containing products; tobacco products; fuel; gasoline; gas; engine oil; household chemical goods);
-customs duties (obligatory payments charged for customs operations related to the release of goods, customs escort of vehicles, and for other actions).
There are three generally established taxes in Belarus, which are calculated from salary. They include an income tax of 13% and two contributions:
1. on pension insurance (in case of reaching retirement age, disability and loss of breadwinner).
It is paid to the Social Protection Fund.
As a general rule, the pension contribution in the amount of 28% is paid by employers; in the amount of 24% – if the volume of agricultural products of the employer is more than half of all production; in the amount of 5% – consumer cooperatives, partnerships of owners, horticultural associations, public associations of disabled people.
Individual entrepreneurs; notaries and lawyers; artisans; creative workers; individuals providing services in the field of agroecotourism; people working under civil contracts with individuals; people working outside Belarus, in diplomatic and consular offices, in the offices of international organizations pay their own contributions in the amount of 29%.
2. on compulsory insurance against industrial accidents and occupational diseases.
It is paid to the Belarusian Republican Unitary Insurance Company “Belgosstrakh”.
The payers of the contribution are organizations, their separate units, as well as individuals who have concluded employment and or civil contracts with individuals. Budget organizations pay a fee in the amount of 0.1%; other entities in the amount of 0.6%. Depending on relation of the payer to a certain class of professional risk, he is established a surcharge or discount.
The payers of income tax are individuals. Income tax is levied on to the following revenue received from sources in Belarus: dividends and interest; insurance compensation; income derived from the use of intellectual property; income received from the lease of property; from the disposal of real estate, enterprises, shares, securities, rights of claim; remuneration for the performance of labor or other duties; pensions, allowances, scholarships; income derived from the use of any vehicles; from the use of pipelines, power lines, objects of the telecommunications and other means of communication.
Received from sources outside Belarus is the same list of income, but with the presence of a foreign element (income received from a foreign organization, or from an object located outside Belarus, etc.), except for the last paragraph; and also those are the amounts of compensation for moral damage received under the legislation of foreign states.
Total income tax rate – 13 %, the object of taxation – salary, bonuses, remuneration under civil law contracts;
It is calculated also by rates:
9% – in respect of the income received from the residents of the Hi-Tech Park under employment contracts; a participant (shareholder) of a resident under its share (shares); individual entrepreneurs – the residents of the Hi-Tech Park; income of individuals received under employment contracts from the residents of the China-Belarus Industrial Park “Great stone”; individuals involved in the implementation of a business project in the field of new and high technologies.
10% – for individual entrepreneurs producing goods in the territory of South-Eastern area of Mogilev region;
4% – lottery prizes;
16% – income from notarial and advocacy activities;
6% – or individual entrepreneurs engaged in retail trade in rural areas;
Fixed rates – in case residential and (or) non-residential premises, car parking spaces are rented;
0% – in respect of the dividends accrued by the residents of the China-Belarus Industrial Park “Great stone”, their founders (participants, shareholders, owners of their property).
A special tax regime is a special procedure for the calculation and payment of taxes, fees (duties), when a generally established list of taxes, fees (duties) for the relevant category of payers can be replaced by a special tax payment.
One of such regimes is a simplified tax system (STS). It provides a special procedure for determining the payers and the object, tax base, tax rate, etc., characterized by comparative simplicity of calculating the amounts of taxes. The STS is intended primarily for individual entrepreneurs and small businesses.
Legal entities, individual entrepreneurs, notaries, lawyers are recognized as tax payers under the simplified tax system.
The simplified tax system can be applied from the date of registration of a legal entity, individual entrepreneur. This requires within twenty working days to submit to the tax authority a notification of transition to the simplified system, indicating the information on the number of employees on the list, which should not exceed 100 people.
The entities already carrying out their activities have a right to switch to the STS; the transition is carried out from next year under the following conditions:
Average number of employees is no more than 100 people;
1. gross revenue on a cumulative basis for nine months does not exceed the amounts established by law.
Payment of tax under the simplified system replaces the payment of taxes, fees (duties). When applying the STS income tax (legal entities), income tax (individual entrepreneur), real estate tax, environmental tax, harvesting fee are not paid.
It is possible to apply the simplified system with the payment of value added tax and without the payment of value added tax.
Individual entrepreneurs and also legal entities with the number of employees no more than 50 people have a right to switch to the simplified system without the payment of value added tax, and the amount of the gross revenue established by law.
Tax rates under the STS:
5% of gross revenue – for non-paying VAT;
3% – for VAT payers (20%)
For comparison, when using the general system of taxation, income tax is paid at the rate of 18% and VAT (20%).
Among the special regimes of taxation: the single tax from individual entrepreneurs and other individuals; single tax for producers of agricultural products, etc.
There are special legal regimes in Belarus, which provide tax preferences: for the residents of free economic zones, Hi-Tech Park, China-Belarus Industrial Park “Great Stone”. Tax benefits are provided when doing business in rural areas, carrying out activities in the over-the-counter (OTC) market Forex (transactions with non-deliverable over-the-counter financial instruments).
Thus, the tax system of Belarus is aimed at creating the best conditions for investment, special tax regimes, tax preferences and benefits are provided, the tax policy takes into account the opinion of the business community, tax legislation is continuously improved in order to create a favorable tax climate, especially for small and medium-sized businesses.