Эстония прекращает действие СОИДН с Беларусью
- Why has this happened?
- What is important to remember?
- What does this mean for business? REVERA’s recommendations
- Contact a lawyer for further information
Estonia Terminates the Double Taxation Treaty with Belarus
Estonia has officially notified Belarus of its decision to denounce the agreement for the avoidance of double taxation (the “DTT”). As from 1 January 2027, the agreement will cease to have legal effect and the tax provisions set out in it will no longer apply.
The changes will apply to income accrued (paid) from 1 January 2027, as well as to profits earned for tax periods beginning on or after that date.
What does this mean for residents of the two countries?
Once the treaty ceases to apply, income of Estonian tax residents derived from Belarusian sources, and income of Belarusian tax residents derived from Estonian sources, will be taxed at the rates set by the domestic tax legislation of each country – i.e. without the reliefs provided by the DTT.
The most significant changes will affect withholding taxes on passive income which was previously taxed at reduced treaty rates.
| Type of income | Rate under the DTT | Rate in Belarus – legal entities | Rate in Belarus – individuals |
|---|---|---|---|
| Dividends | 10% | 25% | 13% / 25% |
| Interest | 10% | 10% | 13% |
| Royalties | 10% | 15% | 13% / 25% |
Conclusion: The tax burden between residents of Belarus and Estonia may increase significantly.
Why has this happened?
The denunciation is a retaliatory measure in response to the actions of the Republic of Belarus.
Previously, under Resolution of the Council of Ministers No. 164, Belarus unilaterally suspended, until 31 December 2026, the application of a number of provisions of the DTT with Estonia, including those relating to:
- dividends;
- interest;
- income from the sale (alienation) of property.
In response to the partial suspension of the DTT provisions by Belarus, Estonia decided to denounce the treaty in full with effect from 1 January 2027. Thus, from 2027 onwards, relations in the field of taxation will be governed exclusively by domestic legislation.
What is important to remember?
Individuals who are tax residents of Belarus and receive income from abroad retain the possibility of crediting tax paid in a foreign state, provided that supporting documents are available.
For a foreign tax credit, the following documents are required:
- Documents evidencing the receipt of income and payment of tax, certified by the tax authority or other competent authority of the foreign state OR
- Copies of the tax return filed with the foreign tax authority and a copy of the payment document confirming the payment of tax.
What does this mean for business? REVERA’s recommendations
Companies and individuals should start planning their transactions in order to minimise the adverse impact of the increased tax burden from 2027.
We are ready to provide the following support:
Analysis of the tax implications of the DTT denunciation:
- We will assess the impact of the treaty’s denunciation on your operations, determine the applicable domestic tax rates and prepare recommendations for structuring transactions after 1 January 2027.
Advice on withholding tax and supporting documents:
- We will explain the procedure for applying domestic withholding tax rates and, where necessary, assist in preparing a full set of supporting documents.
Contact REVERA’s lawyers in advance to prepare for the change in the tax regime and protect your financial strategy.
Authors: Katsiaryna Sushko, Ihar Razduyeu.
Contact a lawyer for further information
Contact a lawyer
