Urgent tax news from Belarus!

13.03.2024

Resolution of the Council of Ministers No. 164 of 07.03.2024 increased the tax rate on income of foreign organizations that do not operate in Belarus through a permanent representative office to 25% on dividend income.

The 25% rate will be applied:

• from 1 April 2024 to 31 December 2026,
• in respect of dividends paid to foreign organizations whose location is a state included in the list of "unfriendly" states.

Also, the above resolution suspends certain provisions of Double Taxation Agreements concluded with 27 states from 1 June 2024 to 31 December 2026.

USA, France, Denmark, Poland, Sweden, Belgium, Lithuania, Latvia, the Netherlands, Czech Republic, Bulgaria, Estonia, Romania, Cyprus, Switzerland, Slovakia, Austria, Hungary, Croatia, Macedonia, Italy, Germany, Finland, Ireland, Slovenia, Spain, UK.

In particular, the provisions governing the generation of income in the form of dividends, interest, and income from the alienation of property have been suspended.

Summary:

1. If an individual tax resident of a state from the list of "unfriendly" states receives income in the form of dividends from a Belarusian company, the rate of income tax on individuals  will be 25% of the amount exceeding 200,000 BYN. This will not affect the founders-residents (participants) of HTP.
2. If legal entities and individuals from "unfriendly" countries receive  income in the form of interest from a Belarusian company, the rates of income tax of foreign organizations and income tax on individuals will be  10% and 13% respectively.  
3. If legal entities and individuals from "unfriendly" countries receive  income from the sale of shares in the charter fund of a Belarusian company, the rates of income tax for foreign organizations and personal income tax  will be 12% and 13%, respectively. 
4. If Belarusian tax residents receive income from "unfriendly" countries, we consider that the provisions of the national legislation on the possibility of offsetting tax amounts paid abroad will be applied.

In any case, we are awaiting official clarification from the Ministry of Taxes and Duties.