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The
value-added tax is collected from turnover from sale of commodities (work or
services) in the territory of the Republic of Belarus in conformity with the
Law of the Republic of Belarus "On Value-Added Tax" at the rates of
20%, 10% (according to the list of food products and children's products) and
0% (when products are exported). The zero rate is applied to export of
transport services, construction and operations on processing of raw material
imported into the country in exchange of finished products. The zero rate is
also applied to export of commodities to foreign countries other than the CIS
countries, Baltic States and states with which agreements have been made
regulating issues of collection of indirect taxes according to the principle of
the country of destination.
The
rate of 20% is applied to turnover on sales of commodities from the Republic of
Belarus: to Georgia, Russia and Turkmenistan.
Excise.
In conformity with the Law of the Republic of Belarus "On Excise"
(with due account of amendments and additions) the excise payers are legal
entities: manufacturing excisable commodities; importing excisable commodities
into the customs territory of the Republic of Belarus and/or selling excisable
commodities imported into the customs territory of the Republic of Belarus.
As
regards excisable commodities made from raw material imported to the Republic
of Belarus in exchange of finished products, the excise payers are enterprises
manufacturing such commodities (processing raw material). The list of excisable
commodities and the excise rates are established by the Government of the
Republic of Belarus. The list of excisable commodities includes alcoholic,
tobacco, jewelry and fur products as well as automobiles and oil products.
Alcohol,
alcohol-containing juice realised for the production of wine, liquid coloured
vodka, alcohol dietary vinegar as well as raw alcohol for rectification strong
drinks, soft drinks and medicines are not taxed with excise if the enterprises
of the Republic have the right to produce them.
Excise
is not paid on crude oil imported into the territory of Belarus.
Commodities
are not taxable that are designed for production purposes and imported by
artificial persons into the territory of the Republic of Belarus by contracts
payment for which are made at the expense of foreign credits given against
guarantee of the Government of the Republic of Belarus.
The
tax on immovable property. The annual rate of the tax on immovable property is
established at 1%. It is applied to the residual cost of the fixed production
and non-production assets.
The
land tax is mandatory for all landowners, land users, including land leasers
and landowners.
The
land tax is imposed on the following lands:
·
agricultural
lands,
·
lands of centres
of population,
·
land belonging to
industry, transport, communication and defence facilities and lands of other
usage,
·
lands of the
forestry fund,
·
lands of the
water fund.
The size of the land
tax is determined depending on the quality and location of the land lot and
does not depend on the results of economic activities of the landowner or land
user. The size of the land tax on agricultural land is determined according to
the land cadastre assessment (a special table is used to determine the tax).
The ecological tax. The
ecological tax is imposed on discharge (release) of contaminants into the
environment as well as on the volume of extracted natural resources and the
volume of processed oil and oil products.
The extraordinary tax
and mandatory deductions into the state employment fund are to be paid by legal
entities at 5% of the wages fund as a single fee.
Deductions to the
social protection fund of the population constitute up to 35% of the wages
fund.
The tax on incomes it
to be paid by credit and financial institutions and insurance at the rate of
30%; by other legal entities on incomes from stock transactions - at the rate
of 40%.
The tax on sale of
automotive fuel is established by the Law of the Republic of Belarus "On
The Budget Of The Republic Of Belarus For 2001" in the amount of 20% of
the cost of sold automotive fuel.
Local taxes and duties.
In conformity with the Law of the Republic of Belarus "On The Budget Of
The Republic Of Belarus For 2001" the tax rates are to be established by
local Councils of Deputies in the amounts not exceeding:
·
on the tax on
sale of commodities in the retail trade network - 5% from the revenues obtained
from sale of commodities (work or services);
·
on targeted fees
and the advertising tax - 5% from the profit (income) remaining at disposal of
the legal entity (together with the mentioned targeted fees and tax);
·
on fees for the
making (purchase) of wild plants (their parts), mushrooms, technical and
medicinal vegetation raw materials - 5% from the cost of the volume of such
making calculated from the average purchase price for this products in the
relevant region; and for the resort fee - 3% from the cost of the resort
services.
The tax to the economy
stabilisation fund is collected at the rate of 2.5% of the revenues received
from the sales of commodities, work or services.
The tax to the fund for
support of agricultural producers is paid at the rate of 2% from the revenues
(gross income) obtained from the sale of commodities, work or services.
Taxation of enterprises with foreign
investments
Enterprises with
foreign investments are to pay taxes, duties and deductions in conformity with
the legislative acts of the Republic of Belarus and as provided for by the Law
of the Republic of Belarus "On Foreign Investments In The Territory Of The
Republic Of Belarus" and other legislation of the Republic of Belarus.
Privileges, except for general privileges, cover foreign and joint enterprises
when they are aimed at creating a favourable investment climate in the country.
Enterprises with the
share of a foreign investor over 30% have a number of privileges on taxation.
Privileges on the tax on profits
The tax shall not be
collected during three years from the time, when the profit is declared,
including the first profitable year, from profits of enterprises with foreign
investment when the share of the foreign investor in the authorised capital is
over 30%, when such profits is received from sale of products (work or
services) of their own manufacture, except for trade and trade and purchase
activities.
The right to this
privilege may be exercised by the enterprise when it received from the Chamber
of Commerce and Industry of the Republic of Belarus the document confirming
that these products (work or services) are products (work or services) of their
own manufacture and if each participant has formed, during the year from the
day of registration of the authorised capital, at least 50% of the amount
stipulated by the documents of foundation and 100% before two years expire from
the time of registration.
If enterprises with
foreign investment manufacture products that are very important for the
Republic, then the Government of the Republic of Belarus has the right,
according to the list set by it, to reduce the tax rate on profits up to 50%
for another period up to three years. However, if an enterprise with foreign
investment is liquidated during the period of tax holidays or during three
years after the completion of the period of tax holiday, then the enterprise is
to pay the tax on profits for this period when it had tax holiday.
An enterprise with
foreign investment has the right to form its reserve fund by reducing the
balance profits by the amount of deductions into the reserve (insurance) fund
in the amounts established in its foundation documents, but by not more than
25% of the actual formed authorised capital.
Taxable profits of
joint and foreign enterprises is to be reduced by the amount of the profit used
for financing capital investments for production purpose and housing
construction as well as for repay of banks' credits received and used to these
purposes.
Privileges on mandatory sale of currency
Enterprises with foreign investment with the share of the foreign
investor exceeding 30% of their authorised capital, when they receive currency
revenues from the sale of products (work or services) of their own, are not to
make mandatory sale of these revenues in currency provided they observe the
conditions stipulated by the legislation.
Privileges on customs fees and the
value-added tax
When property in
imported for the authorised capital, the part owned by the foreign partner is
not liable to customs fees and the value-added tax provided this property:
·
makes part of the
production assets;
·
is not liable to
excise;
·
is imported
within the time periods established by the documents of foundation when the
authorised capital was formed.
In case of sale of
imported share of the authorised capital the enterprise loses the privileges.
The customs fees and the value-added tax are collected according to the general
procedure.
Foreign legal entities
that are not conducting activities ion the Republic of Belarus through a
permanent representation and obtaining incomes from sources in the Republic of
Belarus and are resident of the country shall pay the tax at the rates:
·
dividends - at
the 15% rate;
·
royalty - at the
15% rate;
·
licenses - at the
15% rate;
·
incomes from
debts of any kind, in particular bonds (except for state bonds), bills, loans
(deposits, credits, use of temporarily free resources on accounts of the banks
in the Republic of Belarus) - at the 10% rate;
·
freight fees in
connection with the international carriage - at the 6% rate;
·
incomes from sale
of commodities at exhibitions and fairs - at the 10% rate;
·
other incomes -
at the 15% rate.
The above tax rates are
applied if otherwise is not mentioned in agreements on avoidance of double
taxation.
As for 1.01.2001, the
Republic of Belarus applied agreements on avoidance of double taxation made
with Poland, Bulgaria, Sweden, India, Ukraine, Kyrgyzstan, Yugoslavia,
Kazakhstan, Cyprus, Netherlands, Egypt, Russia, Switzerland, Uzbekistan,
Tajikistan, Belgium and Slovakia.
Along with new
agreements made by the Republic of Belarus, other agreements are applied made
earlier by the USSR with other states. However, as new agreements made by the
Republic of Belarus come into force, the agreements made by the USSR with the
respective country become invalid.
Taxation of natural persons
In conformity with the
Law of the Republic of Belarus "On Income Tax From Natural persons: the
income tax is paid by citizens of the Republic of Belarus, foreign citizens and
stateless persons.
This tax is collected
by the progressive scale from the amount of taxable income received during the
calendar year, is calculated and exacted monthly by incrementing total from the
beginning of the year by enterprises paying incomes to natural persons
depending on the amount of such incomes according to the differentiated rates
95 to 30%. Foreign and stateless persons without permanent residence in the
country pay the 20% tax on incomes received from sources in Belarus (except for
incomes from providing hired services).
Incomes obtained abroad
by Belarusian citizens and by stateless persons and foreign citizens who stay
permanently in the territory of the Republic are included into incomes liable
to taxation in the Republic of Belarus. However, for the purpose of exclusion
of double taxation the amounts of income tax paid abroad, provided it is
confirmed by relevant documents, are counted when income tax is to be paid in
the Republic of Belarus.
On completion of
the calendar year natural persons who have obtained incomes from several
sources are obliged to submit to tax authorities of the Republic of Belarus a
declaration on the total annual income for the year not later than the 1st of
March (and the detailed declaration before the 15th of April).