BELARUSIAN ECONOMY & TRADE

MINSK, Feb 16 (Prime-Tass) -- The Belarusian government will bring down turnover taxes for companies and may increase VAT, Belarus’ Deputy Tax Minister Larisa Kondratova told the parliamentary commission for budget, finance and tax policy Wednesday.

After Belarus and Russia switched to the destination basis for collecting VAT, Belarus received a chance to change taxes,” Kondratova believes. “Now we can reduce turnover taxes without reducing VAT, and we may even increase the VAT rate to 20% from the current 18%,” she said.

The government reduced in 2005 the total turnover tax rate to 3.9% from 4.15% in 2004. “Turnover taxes smother companies and promote inflation. We could cut these taxes even more if we did not have to unify the VAT rate with Russia,” Kondratova said.

Earlier, Deputy Prime Minister Andrei Kobyakov said that Belarus, unlike Russia, did not plan to reduce the VAT rate to 16% from the current 18. “In Belarus, VAT is one of most important taxes. We do not have such revenues from monopolies and natural resources like Russia, nevertheless, we have to provide budget revenues,” Kobyakov said.

Russia plans to cut VAT to 16% from 2006 and eliminate preferential rates set at 10%. End

Belarus’ MP says economic profit will not be subject to income tax

MINSK, Feb 16 (Prime-Tass) -- In Belarus economic profit [revenues from insurance contracts, share in charter capitals and operations with securities] will not be subject to income tax, Viktor Marakhin, the chairman of the lower chamber’s commission for budget, finance and tax policy, told reporters after the consideration of the new version of the law on income tax in the second reading.

“This norm received most of MPs’ remarks and the president agreed that we should cross out this article,” Marakhin said.

The bill also provides for exemption from income tax on inherited property. “However, if property is received as a gift, the recipient will have to pay taxes in full,” Marakhin said.

Besides, the bill provides for exemption from income tax on the property that has been used for more than five years. Otherwise, it would be necessary to pay the tax on the difference, Marakhin said.

The lower house of the Belarusian parliament, the House of Representatives, approved in June 2004 the new version of the law on income tax from individuals, which brings the Belarusian legislation closer to that Russian, although it preserves the differentiated income tax rates

The bill introduces the principle of residence in determining the people subject to payment of the income tax. Those staying in Belarus for more than 183 days and recognized as tax residents of the country will have to pay taxes from the incomes received both in Belarus and abroad. Those individuals that are not recognized as tax residents are to pay taxes only from incomes in Belarus.

All tax exemptions are divided into exemptions proper and tax deductions. The latter will be provided by tax agencies on production of the tax return.

The current law on income tax was adopted in 1991 and amended in 2001. End

Belarusian cos’ budget arrears up 21.9%/mo in Jan to 286.6 bln rbl

MINSK, Feb 16 (Prime-Tass) -- Belarusian companies’ budget arrears rose 21.9% on the month in January to 286.6 billion Belarusian rubles as of February 1, an official with Belarus’ Tax Ministry told Prime-Tass Wednesday.

According to ministry sources, the rise in traditional due to long Christmas holidays in early January. “The hike in arrears is not really indicative,” a representative with the ministry said.

Of the total arrears, charged but unpaid VAT amounted to 103.8 billion Belarusian rubles as of February 1, up 36% in January.

Excise budget arrears amounted to 65.7 billion Belarusian rubles as of February 1, up 9.5% in January.

Budget arrears formed by unpaid tax on sales proceeds rose 17.8% in January to 50.2 billion Belarusian rubles.

Profit tax budget arrears increased 68.4% on the month in January to 9.6 billion Belarusian rubles.

Tax credits issued to domestic companies went down 1.7% on the month in January to 211 billion Belarusian rubles.

Deferred tax payments to the state budget rose 0.3% in January to 274.6 billion Belarusian rubles.

Belarus’ total budget arrears decreased 5.9% on the year in 2004 to 235.2 billion Belarusian rubles as of January 1, 2005. End (2,168 Belarusian rubles - U.S. $1)

10/02/2005

Tax Ministry specifies offshore duty exemption procedure

MINSK, Feb 10 (Prime-Tass) -- Belarus’ Tax ministry has specified the procedure of exemption of domestic companies from the 15% offshore duty, an official with the ministry told Prime-Tass Thursday.

The ministry decided that domestic companies would be exempted from the offshore duty when a domestic company repays to a foreign company registered in an offshore area the funds that had been received by mistake or in excess of the planned sum or repays to a foreign shareholder its contribution to the charter capital of companies being liquidated in Belarus.

Currently three types of financial transactions are subject to offshore duty: transfer of money to a foreign company registered in an offshore area or to an account in an offshore area; discharge of obligations in non-monetary form to a foreign company registered in an offshore area; and transfer of property rights between a Belarusian company and a foreign company registered in an offshore area.

Earlier, the ministry decided that the offshore duty should not be levied from repayment of loans, including discharge of international liabilities by the state and in other cases if the president decides so. End

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taxation

Belarus’ govt set to cut turnover tax, may raise VAT

Belarus’ MP says economic profit will not be subject to income tax

Belarusian cos’ budget arrears up 21.9%/mo in Jan to 286.6 bln rbl

Tax Ministry specifies offshore duty exemption procedure