belarus - pkf international · belarus does not impose estate tax, gift taxes or a net worth tax....

2016/17

Belarus

PKF Worldwide Tax Guide 2016-17 1

FOREWORD A country's tax regime is always a key factor for any business considering moving into new markets. What is the corporate tax rate? Are there any incentives for overseas businesses? Are there double tax treaties in place? How will foreign source income be taxed? Since 1994, the PKF network of independent member firms, administered by PKF International Limited, has produced the PKF Worldwide Tax Guide (WWTG) to provide international businesses with the answers to these key tax questions. As you will appreciate, the production of the WWTG is a huge team effort and we would like to thank all tax experts within PKF member firms who gave up their time to contribute the vital information on their country's taxes that forms the heart of this publication. The PKF Worldwide Tax Guide 2016/17 (WWTG) is an annual publication that provides an overview of the taxation and business regulation regimes of the world's most significant trading countries. In compiling this publication, member firms of the PKF network have based their summaries on information current on 30 April 2016, while also noting imminent changes where necessary. On a country-by-country basis, each summary such as this one, addresses the major taxes applicable to business; how taxable income is determined; sundry other related taxation and business issues; and the country's personal tax regime. The final section of each country summary sets out the Double Tax Treaty and Non-Treaty rates of tax withholding relating to the payment of dividends, interest, royalties and other related payments. While the WWTG should not to be regarded as offering a complete explanation of the taxation issues in each country, we hope readers will use the publication as their first point of reference and then use the services of their local PKF member firm to provide specific information and advice. Services provided by member firms include: Assurance & Advisory;

Financial Planning / Wealth Management;

Corporate Finance;

Management Consultancy;

IT Consultancy;

Insolvency - Corporate and Personal;

Taxation;

Forensic Accounting; and,

Hotel Consultancy. In addition to the printed version of the WWTG, individual country taxation guides such as this are available in PDF format which can be downloaded from the PKF website at www.pkf.com

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IMPORTANT DISCLAIMER This publication should not be regarded as offering a complete explanation of the taxation matters that are contained within this publication. This publication has been sold or distributed on the express terms and understanding that the publishers and the authors are not responsible for the results of any actions which are undertaken on the basis of the information which is contained within this publication, nor for any error in, or omission from, this publication. The publishers and the authors expressly disclaim all and any liability and responsibility to any person, entity or corporation who acts or fails to act as a consequence of any reliance upon the whole or any part of the contents of this publication. Accordingly no person, entity or corporation should act or rely upon any matter or information as contained or implied within this publication without first obtaining advice from an appropriately qualified professional person or firm of advisors, and ensuring that such advice specifically relates to their particular circumstances. PKF International Limited (PKFI) administers a family of legally independent firms. Neither PKFI nor the member firms of the network generally accept any responsibility or liability for the actions or inactions of any individual member or correspondent firm or firms. PKF INTERNATIONAL LIMITED JUNE 2016 © PKF INTERNATIONAL LIMITED All RIGHTS RESERVED USE APPROVED WITH ATTRIBUTION

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STRUCTURE OF COUNTRY DESCRIPTIONS A. TAXES PAYABLE

COMPANY TAX CAPITAL GAINS TAX BRANCH PROFITS TAX VALUE ADDED TAX (VAT) OTHER TAXES – CUSTOMS DUTIES OTHER TAXES – ESTATE AND GIFT TAXES

B. DETERMINATION OF TAXABLE INCOME

CAPITAL ALLOWANCES INVESTMENT DEDUCTION STOCK / INVENTORY DIVIDENDS INTEREST DEDUCTIONS LOSSES INCENTIVES

C. FOREIGN TAX RELIEF D. CORPORATE GROUPS E. RELATED PARTY TRANSACTIONS F. EXCHANGE CONTROL G. PERSONAL INCOME TAX H. TREATY AND NON-TREATY WITHHOLDING TAX RATES

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MEMBER FIRM City Name Contact information Minsk Anastasia Belenkevich +375 17 262 5223 [email protected] BASIC FACTS Full name: Republic of Belarus Capital: Minsk Main languages: Belarusian, Russian Population: 9,498,700 (2016 estimate) Major religion: Christianity Monetary units: Belarusian Ruble (BYR) Internet domain: .by Int. dialling code: +375 KEY TAX POINTS Belarus resident companies are subject to tax on their worldwide income. Non-resident

companies are subject to tax on their Belarus source income only which is derived from a permanent establishment (PE) in Belarus. Where a non-resident’s Belarus PE does not have any business activity it will be subject to withholding tax on its Belarus sourced income. The standard corporate profits tax rate is 18%.

There is no specific branch profits tax in Belarus. Capital gains are taxed at 18%. Broadly, local supplies of goods and services in Belarus provided by a taxpayer as well as the

importation of goods, are subject to VAT. Supplies may be zero-rated, exempt, standard or preferential rated. The standard rate of VAT is 20%. A preferential rate of 10% applies to certain supplies.

Belarus does not impose estate tax, gift taxes or a net worth tax. For company taxation, the net profit shown in the financial statements is adjusted for tax

purposes and expenses incurred in earning income or receiving an economic benefit are allowed in full, unless the Tax Code or Presidential Regulations provide otherwise or limit or restrict the deduction.

Unless otherwise provided by a double tax treaty, dividends paid to foreign legal entities not having a permanent establishment in Belarus are subject to 12% withholding tax. Dividends distributed by a resident company to another resident company are subject to 12% withholding tax.

Thin capitalisation rules apply to legal entities in Belarus which restrict the deduction of interest to a debt-to-equity ratio of 3:1 and apply to certain controlled debt obligations.

The Tax Code empowers the tax authority to ensure that transactions between related parties reflect a third party arm’s length price i.e. an objective market value.

The tax year in Belarus is the calendar year. Belarus resident individuals are subject to personal income tax on their worldwide income whereas non-resident individuals are taxed on their Belarusian-source income only.

Employment income includes salary, any other compensation and bonuses received in cash or in kind. Employers calculate, deduct and pay the relevant tax on the compensation paid to their employees.

Social security contributions are payable by an employer at a rate of 34% (28% for pension insurance and 6% for social insurance) and by an employee at a rate of 1% of their gross compensation.

Capital gains are not paid separately but included within the total income of an individual taxpayer.

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A. TAXES PAYABLE COMPANY TAX Belarus resident companies are subject to tax on their worldwide income. Non-resident companies are subject to tax on their Belarus source income only which is derived from a permanent establishment (PE) in Belarus. Where a non-resident’s Belarus PE does not have any business activity it will be subject to withholding tax on its Belarus sourced income. The standard corporate profits tax rate is 18% however a reduced tax rate applies to the following oncome: Dividends paid to Belarus companies (12%); Income (profits) of producers of high-technology products (10%); Belarus has several tax regimes as follows: (1) Simplified system of taxation:

Under the simplified system of taxation business entities are not subject to corporate profits tax and under certain conditions, to VAT (and some other taxes), but instead pay a unified tax of either 5% of gross revenues or, if the business entity continues to pay VAT, 3% of gross revenues.

(2) Unified tax on agricultural producers: A 1% unified tax rate applies to the gross revenues of agricultural producers from the sale of goods (works and services) and other property and income derived from non-sales transactions. For an agricultural entity to apply the unified tax method at least 50% of its annual gross revenue must be from the sale of its own manufactured crop products (excluding flowers and ornamental plants), livestock products, fish breeding and bee breeding products.

(3) Tax on gambling industry: Gambling (except for lotteries) is subject to fixed tax rates. The rate depends on the amount of operational gambling equipment used. An additional gambling tax of 4% applies to the positive difference between the amount of received bids and the fund to be paid to the winner.

(4) Tax on income generated by lottery sales: Lottery sales are subject to an 8% tax rate on the gross revenue less the awarded prize fund.

(5) Tax on electronic interactive games: An electronic interactive games tax applies at 8% to the difference between the amount of revenue from the electronic interactive games and the fund to be paid to the winner(s).

COMPANY TAX ADMINISTRATION The basic tax reporting period is the calendar quarter and tax returns must be filed within 20 days of the month following the end of the reporting quarter. Any corporate profits tax liability must be paid within 22 days of the month following the end of the respective reporting quarter. Corporate profits tax for the fourth quarter of 2015 must be paid by 22 December 2015 in an amount equal to two-thirds of the tax payable in the third quarter of 2015 with subsequent additional payment or reduction not later than 22 March 2016. A penalty of 20% of the unpaid tax but not less than 10 basic units may arise where there is non-payment or an incomplete payment of tax. A penalty of up to 10% of the unpaid tax, but not less than 10 basic units, may arise if a tax return is submitted late. In addition to these penalties, a further penalty is applied for every day of delay in tax payment. The penalty is assessed on the basis of the refinance rate established by the National Bank of the Republic of Belarus (currently, 25%). CAPITAL GAINS TAX Capital gains are taxed at 18%.

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BRANCH PROFITS TAX There is no specific branch profits tax however a permanent establishment (PE) of a non-resident legal entity will pay tax on profits attributable to it. A PE can include any place through which a foreign legal entity regularly carries out its business activities in Belarus. VALUE ADDED TAX (VAT) Broadly, local supplies of goods and services in Belarus provided by a taxpayer as well as the importation of goods, are subject to VAT. Supplies may be zero-rated, exempt, standard or preferential rated. The standard rate of VAT is 20%. A preferential rate of 10% applies to the following: • Local supplies of crop products (excluding floriculture, cultivation of ornamental plants),

beekeeping, livestock (except for fur production) and fisheries locally produced; and, • Import and/or local supplies of certain food products and goods for children. Normally taxpayers recognise revenue for VAT purposes on an accrual basis however, as an exception to this, revenue is recognised on a cash basis by taxpayers using the simplified taxation system and keeping simplified tax records without accounting records. VAT returns should be submitted to the tax authority on either a monthly or quarterly basis, within the first 20 days of the month following the reporting period. The payment of any VAT liability should be made within the first 22 days of the month following the reporting period. OTHER TAXES – CUSTOMS DUTIES A Customs Union exists between Russia, Kazakhstan, and Belarus, with its unified trade regulations and Customs Code. The following charges are considered Customs Duties: • Import duties; • Export duties; • Special anti-dumping and countervailing duties; • VAT and excise taxes due upon importation of goods; and, • Fees for Customs processing/services. OTHER TAXES – ESTATE AND GIFT TAXES Belarus does not impose estate and gift taxes or a net worth tax. B. DETERMINATION OF TAXABLE INCOME The net profit shown in the financial statements, calculated in accordance with the Belarus accounting standards, is adjusted for tax purposes in accordance with the Tax Code. Broadly, all costs are deductible for tax purposes that are incurred in earning income or receiving an economic benefit, unless the Tax Code of Belarus or Presidential Regulations provide otherwise or limit or restrict the deduction. CAPITAL ALLOWANCES Fixed assets (buildings, premises, equipment and vehicles) may be depreciated using the straight-line method, the indirect disproportionate method, and the production method in accordance with the rates prescribed in the Tax Code. Land is not depreciated. Broadly, fixed assets can be divided into five basic groups and the depreciation rate or rates of each group are as follows:

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Group Description of the assets Annual rate of depreciation

1 Buildings and constructions, premises 1% / 2%

2 Vehicles and equipment 10%

3 Cars and vehicles 12.5%

4 Inventories (furniture, tools, etc.) 10%

5 Computers and other related devices 20% INVESTMENT DEDUCTION For corporate profits tax purposes, a percentage of the initial value of acquiring or reconstructing tangible assets (value of investments for reconstruction) can be deducted, as follows: Up to 10% - Buildings and structures: not more than Up to 20% - Machinery and equipment, and certain transport vehicles: Please note that the tax base (the initial cost of the asset) is not reduced by the investment allowance for tax depreciation purposes STOCK / INVENTORY The domestic accounting legislation allows for the following stock / inventory valuation methods: • First in first out (FIFO); • Cost of each unit; and, • Average cost. The stock / inventory valuation method used for corporate income tax purposes must be the same as the taxpayer’s accounting policy. DIVIDENDS Unless otherwise provided by a double tax treaty, dividends paid to foreign legal entities not having a permanent establishment in Belarus are subject to 12% withholding tax. Dividends distributed by a resident company to another resident company are subject to 12% withholding tax. Since the dividends have been subjected to withholding tax at source they are not again taxed under corporate income tax in the hands of the recipient. Where a foreign entity pays a dividend to an entity in Belarus, the dividend received is subject to 12% corporate income tax even though withholding tax may have been deducted at source by the foreign paying entity. INTEREST DEDUCTIONS Thin capitalisation rules apply to legal entities in Belarus which restrict the deduction of interest to a debt-to-equity ratio of 3:1 for non-resident companies and a debt-to-equity ratio of 1:1 for resident companies and apply to the following controlled debt obligations: Between private persons being founders (participants) of one company; When one party acts as a founder (participant) of another company if direct and (or) indirect

participation of the former is not less than a 20%; When a party is directly or indirectly accountable to or controlled by the other party; Between companies if one party directly and (or) indirectly participates in these companies and

its participation in each company is not less than 20%; When physical persons are married, are close relatives or are in in-law relationship; Between the grantor, custodian and beneficiary as well as between the custodian and companies

the property of which is under custody; Between companies in which the collective executive body or board of directors has more than

50% of the same physical persons together with related parties as described in the fifth bullet above.

The thin capitalization rules do not however apply to banks, insurance companies, or to lessors or

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landlords in certain circumstances. LOSSES Tax losses can be carried forward and utilised against future taxable profits arising in the subsequent 10 years (commencing with 2011 tax losses), although some restrictions apply. Tax losses which have arisen from certain operations may only be utilised against taxable profits arising from the same operations. If tax losses are not attributable to a particular group they are carried forward generally regardless of the operations or activities in which they were incurred. Tax losses may not be carried back. INCENTIVES There are several locations where incentives arise in Belarus: (1) Taxation of residents of the High Technologies Park; (2) Taxation of the members of the Infopark Science and Technology Association; (3) Taxation of the members of the China-Belarus Industrial Park; (4) Free-economic zones; and, (5) Taxation of commercial organizations and individual entrepreneurs engaged in medium-sized or

small towns and rural areas. Please note that special conditions and procedures apply for claiming the above and other benefits. C. FOREIGN TAX RELIEF Subject to the Belarus tax authorities being provided with the certificate issued by the foreign competent authority confirming the amount of tax paid (withheld) in the foreign state, a tax credit for the foreign tax paid by, or withheld from, a Belarusian taxpayer will be granted. Tax paid abroad on foreign-source income derived by a Belarusian legal entity may be credited against its corporate income tax (CIT) liability. The amount deducted however cannot exceed the equivalent amount of Belarus tax calculated on the foreign-source income. D. CORPORATE GROUPS Each entity in Belarus is taxed separately as a stand-alone entity. The tax legislation does not provide for tax groups or group taxation. E. RELATED PARTY TRANSACTIONS The Tax Code empowers the tax authority to ensure that transactions between related parties reflect a third party arm’s length price i.e. an objective market value. Tax authorities can check whether prices set by particular taxpayers are in line with market prices when conducting a tax audit. In particular, they can apply the market price in: (1) Sale transactions of immovable property/real estate when the transaction price is 20% lower than

the market price; (2) Foreign-trade transactions between related parties or with an offshore party when the transaction

price (price of a number of transactions with one person per year) is greater than BYR 1 billion; (3) Transactions inside the country with a related party exempt from paying profit tax in the tax

period when the transaction took place. (4) Other foreign-trade transactions (not mentioned in points (1) – (3)) on strategic goods included in

the list issued by the Government of the Republic of Belarus when the transaction price (price of a number of transactions with one person per year) is greater than BYR 10 billion;

(5) Other transactions (not mentioned in points (1) – (3)) of organisations included in the List of large-scale payers when the transaction price (price of a number of transactions with one person per year) is greater than BYR 10 billion.

The Belarus tax authorities apply the following transfer pricing methods: • Comparable uncontrolled price method (CUP);

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• Resale price method; • Cost plus method; • Comparable profits method; • Profit split method. F. EXCHANGE CONTROL Belarus imposes restrictions, special reporting and controls with respect to transactions involving foreign and national currency. The Belarusian Ruble (BYR) has restricted convertibility. Companies doing business in Belarus must open a bank account with a bank in Belarus. G. PERSONAL INCOME TAX The tax year in Belarus is the calendar year. Belarus resident individuals are subject to personal income tax on their worldwide income whereas non-resident individuals are taxed on their Belarusian-source income only. For tax purposes, an individual is treated as a tax resident of Belarus if they are present in Belarus for more than 183 days in a calendar year otherwise they are considered a non-resident. Employment income includes salary, any other compensation and bonuses received in cash or in kind. Employment income received by an individual from a foreign company or entrepreneur is treated as foreign income for personal income tax purposes, regardless of the place where the employment duties were actually performed. Belarusian tax residents may claim several deductions in determining their taxable income. Employers calculate, deduct and pay the relevant tax on the compensation paid to their employees. Social security contributions are payable by an employer at a rate of 34% (28% for pension insurance and 6% for social insurance) and by an employee at a rate of 1% of their gross compensation. A flat personal income tax rate of 13% applies to all dividends received by a resident. Non-residents receiving dividends from local sources are subject to 13% personal income tax which is withheld at source. Generally, interest received from bank deposits in Belarus is not subject to personal income tax. Self-employed individuals are broadly subject to personal income tax at a flat rate of 16% (although a specific flat rate of 9% applies to certain types of income). Self-employment income, assessed on an annual basis, consists of annual gross income less associated documented expenses. Personal income tax is paid on a quarterly basis where a self-employed individual has a business and has registered as a private entrepreneur with the appropriate registration authority. Under certain circumstances an individual entrepreneur may opt to use a specific tax regimes (simplified taxation and single tax). Generally, any other income is included in regular income and taxed at 12% (or 9% which applies to certain types of income). Capital gains are not paid separately but included within the total income of an individual taxpayer. Under Belarusian tax law, relevant deductions in the following four categories are deductible against a taxpayer’s personal income tax liability: • Social tax deductions; • Standard tax deductions; • Property tax deductions; and, • Professional tax deductions. H. TREATY AND NON-TREATY WITHHOLDING TAX RATES Please find below a table showing the withholding tax rates for dividends, interest and royalties under the various tax treaties including former USSR’s treaties which Belarus still honours:

Dividends (%)

Interest (%)

Royalties (%)

Non-Tax Treaty Countries: 12 10 15

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Dividends (%)

Interest (%)

Royalties (%)

Tax Treaty Countries:

Armenia 10/121 0/1021 10/1545

Austria 5/125 0/5/1032 5/1546

Azerbaijan 12 0/1021 10/1545

Bahrain 5 0/547 5

Belgium 5/125 0/1025 5

Bulgaria 10/1248 0/1021 10/1545

China 10/1248 0/1044 10/1545

Croatia 5/125 10 10/1545

Cyprus 5/10/124 5/1049 5/1546

Czech Republic 5/1035 0/547 5

Denmark16 12 0 0

Egypt 12 10 15

Estonia 10/1248 0/1018 47 10/1545

France16 12 0/1017 0

Finland 5/125 0/5/1033 5/1546

Germany 5/1229 0/5/1030 3/5/1531

Hungary 5/125 5 5

India 10/127 0/1027 47 15

Iran 10/127 0/5/1021 49 5/1546

Ireland 0/5/1040 5 5

Israel 10/1248 0/5/1019 5/10/1528

Italy 5/125 0/8/1038 6/1547

Japan17 12 0/1044 0/10/1513

Kazakhstan 12 0/1021 15

Korea (North) 10/1248 0/1018 21 10/1545

Korea (South) 5/125 0/1015 5

Kyrgyzstan 12 0/1021 15

Kuwait 0/523 0/521 10

Latvia 10/1248 0/1018 47 10/1545

Lebanon 7.5 0/521 5

Lithuania 10/1248 0/1018 47 10/1545

Macedonia 5/125 10 10

Malaysia16 12 0/1018 21 27 10/1514

Moldova 12 0/1027 15

Mongolia 10/1248 0/1039 10/1545

Netherlands 0/5/125 22 0/520 3/5/10/156

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Dividends (%)

Interest (%)

Royalties (%)

Oman 0/534 0/534 10

Pakistan 10/127 0/1018 21 27 15

Poland 10/121 0/1027 0

Qatar 5 0/521 5

Romania 10/1248 0/1021 15

Russian Federation 12 0/1021 10/1545

Saudi Arabia 5 5 10

Slovak Republic 10/127 0/1021 5/10/158

Slovenia 5 0/541 5

South Africa 5/125 0/5/1011 5/1012

Spain17 12 0 0/524

Sweden 5/10/122 0/5/1043 3/5/10/153

Switzerland 5/125 0/5/8/1026 3/5/10/153

Syria 12 10 15

Tajikistan 12 0/1027 15

Thailand 10 0/1042 15

Turkey 10/127 0/1021 10

Turkmenistan 12 0/1021 15

Ukraine 12 10 15

United Arab Emirates 5/109 0/518 5/10/1510

United Kingdom16 0 0 0

United States16 12 0 0

Uzbekistan 12 0/1021 27 15

Venezuela 5/125 0/536 5/1037

Vietnam 12 0/1021 15 NOTES: (1) A 12% rate applies unless the recipient owns more than 30% of the capital of the payer

company (in which case a 10% rate applies). (2) A 12% rate applies unless the recipient is the actual owner of dividends (in which case a 10%

rate applies) or the recipient owns more than 30% of the capital of the payer company (in which case a 10% rate applies).

(3) A 15% rate applies unless the recipient is the actual owner of royalties (in which case a 10% rate applies) or amounts are paid for: The use of, or the right to use, patents and secret formulas or processes or for information

concerning industrial, commercial or scientific experience, where a rate of 3% applies; or, The use of, or the right to use, industrial, commercial or scientific equipment, where a rate

of 5% applies. (4) A rate of 12% applies unless the recipient owns more than 25% of the capital of the payer

company (in which case a 10% rate applies) or the recipient has invested at least ECU 200,000 in the share capital of the payer (in which case a 5% rate applies).

(5) A 12% rate applies unless the recipient owns at least 25% of the capital of the payer company (in which case a 5% rate applies). Please see note 23 below for the Netherlands

(6) A 15% rate applies unless amounts are paid for:

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The use of, or the right to use, copyright of literary, artistic or scientific works, including motion pictures and films or tapes used for television and radio broadcasting, where a rate of 10% applies;

The use of, or the right to use, industrial, commercial or scientific equipment (including vehicles), where a rate of 5% applies; or,

The use of, or the right to use, patents, brand names, designs, models, plans and secret formulas or processes, or for information related to industrial, commercial or scientific expertise, where a rate of 3% applies;

(7) A 12% rate applies unless the recipient owns more than 25% of the capital of the payer company (in which case a 10% rate applies).

(8) A 15% rate applies unless amounts are: Paid for copyright of works of literature, art or science, including motion pictures, films,

tapes and other means of transmitting images or sounds, in which case a 5% rate applies; Paid for:

• Patents, trademarks, designs, drafts, models, schemes and secret formulas or processes;

• Information concerning industrial, commercial or scientific experience; • The use of, or the right to use, industrial, commercial or scientific equipment, or

means of transportation; in which case a 10% rate applies.

(9) A 10% rate applies unless the actual owner of the dividends is a company that owns USD 100,000 or more in the company paying the dividends in which case a 5% rate applies.

(10) A 15% rate applies unless amounts are: Paid for the use of, or the right to use, copyrights of literary or artistic works, including

motion pictures or films and tapes used for television or radio broadcasting, in which case the rate is 10%; or.

Paid for the following: • The use of, or the right to use, copyrights of scientific works, patents, brand names,

designs, models, plans and secret formulas or processes • The right to use information related to industrial, commercial or scientific equipment or

vehicles • Information related to industrial, commercial or scientific expertise in which case a 5% rate applies.

(11) A 10% rate applies unless the recipient of the interest income is the government or a government authority (in which case 0% applies) or the recipient of the interest income is a bank or other financial institution (in which case a 5% rate applies);

(12) A 10% rate applies unless amounts are paid for industrial, commercial or scientific equipment, or vehicles (in which case a 5% rate applies);

(13) A 15% rate applies unless: • Amounts are paid for the use of, or the right to use, copyrights of works of literature, art or

science, including motion pictures, films or tapes for television or radio broadcasting, in which case a 0% rate applies; or,

• Amounts paid for the following: • The use of, or the right to use, patents, trademarks, designs, drafts, models, schemes

and secret formulas or processes; • Information concerning industrial, commercial or scientific experience; • The use of, or the right to use, industrial, commercial or scientific equipment; in which case a 10% rate applies.

(14) A 15% rate applies to amounts paid for the use of, or the right to use, copyrights of motion pictures or magnetic tapes for television and radio broadcasting, or of literary and artistic works. A 0% rate applies to amounts paid for the use of, or right to use: • Patents, brand names, designs, models, plans, secret formulas or processes, or copyrights

of scientific works; • Industrial, commercial or scientific equipment; • Information related to industrial, commercial or scientific expertise.

(15) A 10% rate applies unless the interest income is derived from sales on credit of industrial, commercial or scientific equipment or if the recipient of the interest income is the government or central bank in which case a 0% rate applies.

(16) Belarus honours the double tax treaty entered into by the former USSR. (17) A 10% rate applies except for interest on bank and commercial loans in which case a 0% rate

applies.

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(18) A 10% rate applies except for interest on loans guaranteed by the government in which case a 0% rate applies.

(19) A 10% rate applies unless the recipient of the interest income is a bank or other financial institution (in which case 5% applies) or the recipient of the interest income is the government or central bank (in which case a 0% rate applies)

(20) A 0% rate applies where the: • Payer or payee of the interest income is the government, a political and administrative

division, a local government body or the central bank. • Loan is approved by the government. • Loan is provided, guaranteed or insured by the government, the central bank or other body

under state control. • Loan is provided or guaranteed by a financial institution to promote development, or the

loan is granted with respect to the acquisition of industrial, business, commercial, medical or scientific equipment.

(21) The higher rates apply unless the recipient of the interest income is the government or central bank in which case a 0% rate applies.

(22) A 0% rate applies if either the recipient owns more than: • 50% of the capital of the payer company and its capital contribution is at least ECU

250,000. • 25% of the capital of the payer company and its capital contribution is guaranteed or

insured by the government. (23) A 5% applies unless the recipient of the dividends is the government or central bank in which

case a 0% rate applies. (24) A 5% applies unless amounts are paid for the use of, or the right to use, copyrights of works of

literature, music, art or science other than motion pictures or films and tapes for television or radio broadcasting in which case a 0% rate applies.

(25) A 10% rate applies unless the: • Loan is approved by the government; • Interest income is derived from sales on credit of industrial, medical or scientific equipment

or from service supply contracts; or, • Loan relates to industrial, medical or scientific equipment or service supply contracts, it is

guaranteed by the government, and it is aimed at supporting exports; in which case a 0% rate applies.

(26) A 10% rate applies unless the: • The recipient is the actual owner of the interest income (in which case a rate of 8%

applies); • To interest on loans granted by banks (in which case a rate of 5% applies); • Following conditions is satisfied:

• The loan is approved by the government. • The interest income is derived from sales on credit of industrial, medical or scientific

equipment. • The interest income is derived from government securities. in which case a 0% rate applies.

(27) A 10% rate applies unless he loan is approved by the government in which case a 0% rate applies.

(28) A 15% rate applies unless the recipient is the actual owner of the royalties (in which a 10% applies) or the amounts are paid for copyright of works of literature, art or science, except motion pictures, or for the right to use industrial, commercial or scientific equipment or means of transportation (in which case a 5% rate applies).

(29) A 12% rate applies unless the recipient owns more than 20% of the capital of the payer company and contributes at least EUR 81,806.70 to the share capital of the payer in which case a 5% rate applies

(30) A 10% rate applies unless the recipient is the actual owner of the interest income (in which case a 5% rate applies) or interest: • Arises in Belarus and is paid to the government of Germany, Deutsche Bundesbank,

Kreditanstalt fur Wiederaufbau or Deutsche Finanzierungsgesellschaft fur Beteiligungen in Entwicklungslandern

• Is paid with respect to a loan guaranteed by the Hermes-Deckung and the recipient of the interest income is the government or central bank of Belarus

in which case a 0% rate applies. (31) A 15% rate applies unless the amounts:

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• Are paid for the use of, or the right to use, copyrights of literary and artistic works, including motion pictures and films or tapes used for television or radio broadcasting or for the use of, or right of use, all types of equipment and transportation (in which a rate of 5% applies); or,

• Are paid for the following: • The use of, or the right to use, copyrights of scientific works, patents, brand names,

designs, models, plans and secret formulas or processes; or, • The right to use information related to industrial, commercial or scientific expertise, in which case a 3% rate applies.

(32) A 10% rate applies unless the recipient is the actual owner of the interest income (in which case a 5% rate applies) or the following conditions are satisfied: • The loan is approved by the government. • The recipient of the interest income is the government or central bank. • The interest paid on the loan or credit is guaranteed or secured by the government

(including the Osterreichische Kontrollbank Aktiengesellschaft). in which case a 0% rate applies.

(33) A 10% rate applies unless the recipient is the actual owner of the interest income (in which case a 5% rate applies) or the recipient of the interest income is the government, the central bank, the Finnish Fund for Industrial Cooperation (FINNFUND) or Finnish Export Credit (FINNVERA) (in which case a 0% rate applies).

(34) A 5% applies unless the recipient of the dividends is the government, central bank or the Governmental General Reserve Fund of Oman, in which case a 5% rate applies.

(35) A 10% rate applies unless the recipient owns at least 25% of the capital of the payer company, in which case a 5% rate applies.

(36) A 5% rate applies unless any of the following conditions are satisfied, in which case a 0% rate applies: • The recipient of the interest income is the government or a government authority. • The interest is paid on loans guaranteed by the government. • The interest is paid on loans aimed at promoting exports or connected to the supply of all

types of equipment and transport vehicles by an enterprise of the other contracting state. • The interest is paid with respect to sales of all types of equipment and transport vehicles.

(37) A 10% rate applies unless the royalties are paid for the use of, or the right to use: • Scientific copyrights, software or trademarks • All types of equipment and transport vehicles in which case a 5% rate applies.

(38) A 10% rate applies unless the recipient is the actual owner of the interest income (in which case an 8% rate applies) or the interest is paid: • By the government or a government authority. • To the government or a government authority, local agency or body (including a financial

institution) that fully belongs to the state or governmental body. • To any other agency or body (including a financial institution) on loans provided with

respect to the application of an agreement entered into between the contracting states. in which case a 0% rate applies.

(39) A 10% rate applies unless the loan is provided to the government or central bank in which case a 0% rate applies.

(40) A 10% applies unless the recipient owns at least 25% of the capital of the payer company (in which case a 5% rate applies) or the recipient of the dividends is: • The National Treasury Management Agency of Ireland; • National Reserve Pension Fund of Ireland; • Any other organization, including an agency or institution that is fully, or mainly owned, by

the government in which case a 0% rate applies.

(41) A 5% rate applies unless the recipient or payer of the interest income is the government, a local authority or central bank (in which case the rate is 0%).

(42) A 0% rate applies if the recipient of the interest income is the government, central bank or an institution with capital that is fully owned by the government or local authorities.

(43) A 10% rate applies unless the recipient is the actual owner of interest (in which case a rate of 5% applies) or the: • Payer or payee of the interest income is the government, a political and administrative

division, a local government body or the central bank. • Loan is approved by the government.

Belarus


• Loan is granted and guaranteed by the state financial body to promote exports if the loan is provided or guaranteed on preferential terms.

• Loan is granted by a bank to promote exports. • Interest is paid on a debt that arises with respect to the sale on credit of merchandise or

industrial, business or scientific equipment. in which case a 0% rate applies.

(44) A 10% rate applies unless the recipient of the interest income is the government, central bank, other government agency or a financial institution in which case a 0% rate applies.

(45) A 15% rate applies unless the recipient is the actual owner of the royalties in which case a 10% rate applies.

(46) A 15% rate applies unless the recipient is the actual owner of royalties in which case a 5% rate applies.

(47) The higher rate applies unless the recipient of the interest income is the government or a local government body, the central bank or another government company or financial institution in which case a 0% rate applies.

(48) A 12% rate applies unless the recipient is the actual owner of the dividends in which case a 10% rate applies.

(49) A 10% rate applies unless the recipient is the actual owner of the interest income in which case a 5% rate applies.

belarus - pkf international · belarus does not impose estate tax, gift taxes or a net worth tax....

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