| Belarus Income Tax Rate Belarus individual income tax rate for 2009 is a flat 12%.
Income in the form of dividends, income from business and private notary activities are taxed at 15% in Belarus. Income received from High Technologies Park residents under labour agreements, income of individual entrepreneurs who are residents at the High Technologies Park are taxed at 9%.
Belarus individuals are taxed on their worldwide income. Nonresidents are taxed only on Belarus source income. An individual is resident in Belarus if he / she is physically present in the country for more than 183 days in a calendar year. Taxable income in Belarus is all income regardless of source, including property, services or other benefits in-kind and income to which the taxpayer has the right of disposal, less allowable deductions and exemptions.
Tax Year: Tax year in Belarus is the calendar year.
Standard Tax Deductions: In determining the size of the tax base, the tax payer in Belarus has the right to receive the following standard tax deductions:
- A monthly tax deduction of BYR 250,000 when monthly amount of income doesn't exceed BYR 1,500,000.
- A monthly tax deduction of BYR 70,000 for each child up to 18 years old and (or) each dependant. For parents with 3 or more children under 18 years old, or disabled children under 18 years old, the standard tax deduction is BYR 140,000 per month.
- A monthly tax deduction of BYR 350,000 in the following categories of taxpayers:
. Person sick and suffering from radiation sickness from the Chernobyl accident, and those who took part in the accident
. Veterans of various wars
. Disabled person in groups I and II of all types of disabilities.
Belarus Capital Gains Tax: Capital gains are taxed as ordinary income in Belarus.
Real Property Tax: The owner of real property is subject to an annual real estate tax at a rate of 0.1% of the value of the property.
Inheritance / Estate Tax in Belarus: There's no inheritance / estate tax in Belarus.
Net Wealth Tax: There is no wealth tax in Belarus.
Social Security Contributions: In Belarus, 1% of an employee's wages is withheld by the employer for the benefit of Social Security Fund. The self-employed are required to contribute as well.
Belarus Corporate Tax RateBelarus corporate tax rate for 2009 is 24%.
A company is considered a tax resident if it is registered as a legal entity in Belarus. Residents are taxed on worldwide income. Foreign-source income derived by residents is subject to corporate tax in the same way as Belarusian-source income. Nonresidents are taxed only on Belarus source income.
Tax Incentives for Investment in Belarus
- 6 FEZ. A company has to invest at least EUR 1 million. Certain taxes at reduced rates; profit from own production are exempted from Belarus profit tax for 5 years.
- High Technology Park. Residents - exempted from almost all of taxes and duties.
- Beneficial tax regime if a business is operating in rural areas and small town centers.
- Simplified Taxation System. Companies that meet certain requirements on number of personnel and amount of gross revenues may pay a unified tax imposed on gross revenues. Tax rates are: 6%, 8% or 15%.
Land Tax: A fixed amount of tax is payable per hectare depending on the quality and location.
Real Estate Tax: Effective 01 January 2009, the list of assets subject to real estate tax has been substantially shortened. Fixed production assets in use (machine tool stations, equipment, machines, etc.) are no longer taxable. Henceforth, only buildings and facilities including construction in progress are regarded as subject to real estate tax. Previously, all fixed assets, including movable property which was regarded as fixed assets, were subject to real estate tax.
Real estate tax is imposed on the value of buildings and construction owned or in the possession of a taxpayer. Tax rate is 1% of the cost of buildings. A 2% tax rate may apply to objects of incomplete construction. The real estate tax is deductible in computing profits tax liability.
Turnover Tax in Belarus: At present, the turnover tax is levied at a rate of 1% of turnover from sale of goods and services in Belarus. The turnover tax rate is reduced from 2% to 1% beginning 01 Jan 2009. This measure considerably lessens the tax burden on legal entities.
Social Security Contributions: Employers in Belarus pay 35-38% on top of the gross salary.
Losses: In Belarus, carry forward of losses is not possible. Intra-group transfer of losses is permitted.
Natural Resources Tax: Natural resources tax in Belarus is imposed on the use of natural resources, processing / transporting oil, waste, emissions and use of packaging materials.
Tax on Dividends: Dividends received by a Belarus resident company from another Belarus company or from a nonresident company are subject to Belarus profits tax.
Capital Gains Tax: No separate capital gains tax is imposed in Belarus. Gains derived from the sale of property are taxable under the general profits tax rules. Foreign companies not operating through a permanent establishment are subject to withholding tax on income derived from the sale of shares, bonds and other securities, income from the sale of real estate situated in Belarus and certain other transactions.
Withholding Taxes in Belarus
- Withholding taxes on dividends: 15%;
- Royalties: 15%;
- Interest: 10%;
- Freight: 6%;
- Other income (sale of real estate, shares, certain agency contracts, contractual penalties, management, audit, advertising, insurance services, etc.): 15%.
Anti-avoidance Rules - Belarus Offshore Duty: Wire transfers or non-cash settlements with companies registered in offshore zones or having bank accounts in offshore zones are subject to an offshore duty in Belarus at a rate of 15%. Banks are prohibited from making money transfers to nonresidents unless offshore duty has been paid.
Belarus Value Added Tax (VAT) RatesStandard rate of Value Added Tax in Belarus is 18%.
Value-added tax (VAT) applies to most transactions in Belarus at the standard rate of 18%. A lower rate of 10% applies to supplies of certain foodstuffs and agricultural products; and services of repairs, hairdressing and laundries. Exemptions from VAT include banking and financial services, insurance, educational services and legal services supplied to individuals. The export of goods and related services including the loading, shipment and transshipment of exports are subject to 0% tax. Registration for Value-added tax is compulsory for businesses.
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