Taxation

Posted in Procedure of creation and registration of commercial organization

Current tax legislation of the Republic of Belarus has established the following taxes and compulsory payments payable by organisations with foreign investments:

Compulsory payments to the budget calculated on basis of the proceeds of an organisation:

A duty payable to the national fund of support of agricultural producers, foodstuffs and agrarian science - 1%

Value-added tax

The principal normative act is the Law of the Republic of Belarus "On Value-added Tax" dd. 19.12.1991 (with subsequent alterations and addenda).

The object of taxation is the turnover from the sales of goods (works, services) and property rights on the territory of the Republic of Belarus, as well as goods imported into the customs territory of the Republic of Belarus.

Tax rate: 18%, in some cases 0%; 10%; 24 %, 9.09%, or 15.25%.

Profit tax

The principal normative act is the Law of the Republic of Belarus "On Benefits and Profits Tax" dd. 22.12.1991 (with subsequent alterations and addenda).

Tax rate: 24%.
The profits of commercial organisations with foreign investments (except for foreign commercial organisations in the form of an open joint-stock company), where the share of a foreign investor in the statutory fund exceeds 30 per cent, realised from the sales of made-in goods (works, services), except for trade activity and trading and purchasing activity, shall be exempted from the tax payment within three years as of the moment of profit reporting. This preference applies to commercial organisations with foreign investments where the share of a foreign investor in the statutory fund exceeded 30 per cent as of 1 January 2005.

The rules of rating of goods (works, services) as made-in goods (works, services) shall be determined by the Council of Ministers of the Republic of Belarus or a body authorised by it.

The right to obtaining the preference can be implemented by an organisation by means of submitting a relevant document proofing that the goods (works, services) belong to the category of made-in goods (works, services).

The right to obtaining the preference can be implemented by an organisation on condition that each member (shareholder) has generated his share in the statutory fund at the rate of no less than 50% of the amount provided for by the constitutive documents within a year as from the date of registration. A certificate issued in accordance with the procedure established by the legislation shall be a documentary confirmation of the fact of formation of the statutory fund.

In the event of failure to make required contributions to the statutory fund in corpore before the expiry of two years as from the date of registration, the profit tax shall be calculated in full for the whole period of activity of the organisation. The profit tax for the second year of activity shall be payable taking into account the financial sanctions provided for by the legislation of the Republic of Belarus. At that, the profit tax preference shall be terminated and shall not be renewed subsequently.

In the event of creation of commercial organisations with foreign investments, the constitutive agreement of which provides for the implementation of building and assembly jobs in contribution to the statutory fund, the Council of Ministers of the Republic of Belarus shall have the right to extend the period of contributions to the statutory fund additionally by the period of two years.

The accumulated assets of commercial organisations with foreign investments, except for the funds whose resources are aimed at material stimulation and social and cultural development, shall be liable to taxation during the liquidation of the organisation on basis of their depreciated cost.

The profit realised from sales of high-technology made-in goods (works, services) (except for trade activity and trading and purchasing activity) by the organisations included in the list of high-technology organisations, which is approved of by the President of the Republic of Belarus, shall be taxable on basis of the rate decreased by 50%.

The monetary funds released as a result of granting a profit tax preference in accordance with the present clause, shall be used by the above-mentioned organisations for financing of technical re-equipment.

Excise tax

The principal normative act is the Law of the Republic of Belarus "On Excise Tax" dd. 19.12.1991 (with subsequent alterations and addenda).

Excises are introduced for alcohol and alcohol-containing solutions, tobacco products, alcoholic products and beer, crude oil, motor petrol, diesel fuel, other fuels used in motor cars, oil for diesel and / or carburettor (injector) engines, minibuses and passenger cars, including those transformed into lorries, irrespective of the engine displacement, with exception of passenger cars intended for prophylaxis and rehabilitation of disabled persons.

Land payments

The principal normative act is the Law of the Republic of Belarus "On Land Payments" dd. 18.12.1991 with subsequent alterations and addenda.

The amount of land payments depends on location and quality of the ground area.

Real estate tax

The principal normative act is the Law of the Republic of Belarus "On Real Estate Tax" dd. 23.12.1991 with subsequent alterations and addenda.

Tax rate: 1% per year. This tax is payable on basis of the value of buildings, constructions and transmitting units in property or ownership of joint ventures / foreign enterprises, and suspended construction objects.

Compulsory payments calculated from the wages fund of joint ventures / foreign enterprises:

State social insurance fund - 35%.

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