Profit Tax

The rate is 24%.
The object of taxation is the amount of profit from sales of goods (work, services), other valuables (including fixed assets, material assets, intangible assets, securities), proprietary rights, and income from extra-sale operations reduced by the amount of cost of such operations.
The organizations shall be deemed any legal entities of the Republic of Belarus, foreign legal entities and international organizations, societies in participation (members to the agreement of joint activity), economic groups.

Tax concessions:
Profit of commercial companies with foreign investments (except for companies organized in the form of public joint stock companies) with the share of foreign investments in their authorized capital not less than 30%, which profit is derived from sale of goods (work, services) of domestic manufacture (except for profit derived from commercial or commercial-procurement activities) shall be exempt from tax within three years from the date of profit declaration.

Such concession shall apply to commercial companies with foreign investments in which authorized capital the share of a foreign investor has made more than 30% till 01.1.2005.

Taxable profit shall be reduced by the amount of profit allocated for financing of capital investments in the industrial-purpose objects and house-building, as well as in repayment of banking credits received and used for such purposes.

• Law of the Republic of Belarus No. 1330-XII dated December 22, 1991 “On Tax on Income and Profit”;
• Ordinance of the Council of Ministers of the Republic of Belarus No. 1817 dated December 17, 2003 “On Approval of Regulations of Assigning any Goods (Work, Services) to Goods (Work, Services) of Domestic Manufacture”.

Tax on Income

Any foreign legal entities that do not carry out activities in the Republic of Belarus through their permanent representative offices and derive income from any sources in the Republic of Belarus, shall pay income tax at the following rates:

• 15% on dividends, royalty, licenses, other income according to the list specified by the Council of Ministers of the Republic of Belarus’
• 10% on income and debt instruments (claims) of any kind;
• 40% on income from sale (paying off) any securities;
• 6% on payment for transportation, freight related to international transportation;
• 10% of customs value of any goods brought and sold at the exhibitions, trade exhibitions, fairs.

Income tax levied on foreign legal entities shall be withheld by any legal entities and individual entrepreneurs that/who pay the tax.

Should any international treaty of the Republic of Belarus establish any other rules, such rules of the international treaty shall be applied.

• Ordinance of the Council of Ministers of the Republic of Belarus No. 36 dated January 14, 2005 “On Certain Issues of Calculation of Tax on Income of Foreign Legal Entities, and Entering Changes in Ordinance of the Council of Ministers of the Republic of Belarus No. 551 dated May 12, 2004”

Tax on Income in Certain (Financial) Fields of Activity

30% – for banks and insurance companies;

40% – for other organizations on income from security transactions (40% for foreign legal entities that do not carry out activities in the Republic of Belarus through their permanent representative offices, save as otherwise is established by any international treaty).

• the banks – as a total amount of income derived within the tax period reduced by the amount of expenses charged, in accordance with the legislation of the Republic of Belarus, to production (work, services) price with respect to structure of costs included in expenses for carrying out banking activities, and income from extra-sales operations reduced by the amount of cost of such operations;
• insurance companies – as a total amount of income derived from rendering insurance services and carrying out any other kinds of activities within the tax period reduced by the amount of costs charged, in accordance with the legislation of the Republic of Belarus, to production (work, services) price with respect to peculiarities of the structure of costs included in expenses of such companies, and income from extra-sales operations reduced by the amount of cost of such operations;
• any other organizations involved in security transactions – as a difference between the sale (pay off) price of such securities within the tax period and their purchase price, with respect to cost of purchase and sale;
• should the taxable base be determined by the banks and insurance companies, such base shall be increased by the cost of labour remuneration, depreciation of capital assets, and wear and tear of intangible assets.

The taxable base of any banks with participation of foreign capital, and the banks fully owned by any foreign investors shall be reduced by the sum of deductions to the reserve (insurance) fund in the amount fixed by the constituent documents, but not more than 25 % of actually formed authorized capital.

The taxable base of any banks and insurance companies with participation of foreign investors which share in the authorized capital makes over 30% shall be reduced by the amount of profit derived from sale of their proper (own) services within three years from the date of declaration of such profit.

• Decree of the President of the Republic of Belarus No. 43 dated December 23, 1999 “On Taxation of Income Derived in Certain Fields of Activity”;
• Ordinance of the Council of Ministers of the Republic of Belarus No. 1517 dated November 30, 2004 “On Procedure of Assigning of Services of any Banks , Non-Banking Financial Institutions, and Insurance Companies to Proper Services (of Domestic Manufacture), and On Entering Changes in Ordinance of the Council of Ministers of the Republic of Belarus No. 1817 dated December 17, 2001”

Income Tax

Progressive 5-level rate scale (9%, 15%, 20%, 25%, 30%). The object of taxation is the total return of natural persons in monetary form derived within the calendar year.

NOTE. The income tax payer shall be natural persons. Legal entities shall calculate and withhold income tax from income paid to natural persons.

• Law of the Republic of Belarus No. 1327-XII dated December 21, 1991 “On Income Tax from Natural Persons”