Andrey Slabko, Lawyer
Decree of the President of the Republic of Belarus dated December 31, 2019 No. 503 “On taxation” (hereinafter - Decree No. 503) introduced extensive amendments to tax legislation. Changes can be divided into several parts.
Change in tax rates
Clause 1 of Decree No. 503 establishes the rates of certain taxes (Appendix 1-8), as well as the amount of income exempted from income tax from individuals (Appendix 9), the size of tax deductions for income tax from individuals (Appendix 10).
According to subclause 4.2. of the Decree, the income tax rate for taxation of profits earned by the Forex company, the National Forex Center from operations on non-deliverable OTC financial instruments, is 25 percent.
Subclause 9.2. Clause 9 of Decree No. 503 establishes land tax rates for land plots for which the area of land plots is used as the tax base of land tax (except for lands and land plots specified in clauses 2-5 of Article 241 of the Tax Code).
Subclauses 9.3. and 9.4. land tax rates for agricultural land occupied by capital structures (buildings, structures), their parts and other objects, as well as a specific tax rate for the extraction (removal) of natural resources in relation to potash salts have been established.
Application of standard tax deduction
So, amendments have been made to the procedure for applying the standard tax deduction: such a deduction is applied in 2020 by individual entrepreneurs, notaries engaged in notarial activity in a notary office, lawyers who carry out advocacy activities individually, who do not have a job place during the reporting (tax) period (part) of it of the main work (service, study), if the amount of taxable income reduced by the amount of expenses provided for in Article 205 of the Tax Code does not exceed in the corresponding quarter 2126 rubles. The size of the standard tax deduction is provided in Appendix 10, the procedure for applying the deduction is provided in part 5, clause 2 of article 209 Tax Code.
Informing Ministry of Taxation Inspection Board on the purchase of crop products from individuals
Organizations that will purchase crop products from individuals in 2020 should submit to the tax authority at the place of registration information on income paid in the territory of the Republic of Belarus to such citizens no later than April 1, 2021 if the amount of income paid in 2020 exceeded 2571 Belarusian rubles per day (paragraph 3 of Decree No. 503).
Additional income tax benefits
Separate income tax privileges have also been established. So, subparagraph 4.1. paragraph 4 establishes the types of income exempted from taxation:
- one-time payment for health improvement made to employees of budget organizations who are not civil servants and military personnel, employees of paramilitary organizations (with special ranks);
- monetary compensation for the costs of hiring residential premises, paid at the expense of compulsory collection to employees of enforcement agencies sent in the order of transfer to another locality, as well as young professionals sent to work in enforcement agencies not at the place of residence;
- income received from agreements concluded with market participants of non-deliverable OTC financial instruments to perform operations with non-deliverable OTC financial instruments
Deferred income tax payment for foreign organizations
Foreign organizations that operate in Belarus through a permanent establishment shall transfer to the budget the amounts of the calculated and withheld income tax from individuals no later than the 22nd day of the month following the month in which the period specified in paragraphs 3 and 4 of article 180 of the tax code expires:
- 180 days continuously or in the aggregate in any 12-month period, beginning or ending in the corresponding tax period - for works (rendering services) performed on the territory of Belarus;
- for a construction site, installation or assembly facility - if such facilities exist for more than 180 days in any 12-month period beginning or ending in the relevant tax period.
If a longer period is defined by the relevant international Treaty of the Republic of Belarus on taxation, the transfer of this tax to the budget is carried out no later than the 22nd day of the month following the month in which the period defined by such an international Treaty expired. At the end of these periods, income tax is transferred to the budget in the General order.
This benefit will allow to use monetary resources that were previously subject to transfer to the budget for the development of the project of a foreign organization during these periods.
Refund of overdeducted income tax amounts
Sub-paragraph 4.4. paragraph 4 of Decree No. 503 amended the procedure for returning overdeducted income tax amounts to the payer if the total amount of income tax to be transferred by the tax agent to the budget for upcoming payments is not sufficient to make such a refund.
Reducing the criteria for applying benefits for organizations that employ disabled people
For organizations that employ disabled people, changes have been made to the procedure for applying VAT, income tax and real estate tax benefits: such organizations can apply the benefits established by decree No. 503 if the number of disabled people in such organizations is at least 30 percent. These benefits are as follows: VAT-exemption of turnover on the sale of goods (works, services); for profit tax – gross profit is exempt from tax (except for profit received from trade and purchasing and intermediary activities, as well as income from renting out property (transfer to financial lease (leasing)), other paid or gratuitous use of property); for real estate tax-exemption from real estate tax.
The cost of fuel - on the normalized costs according to the decision of the head or the conclusion of the test laboratory
One of the key provisions of Decree No. 503 is contained in part 1 of paragraph 6 and relates to the attribution of the cost of fuel and lubricants to expenses: the cost of paying for the cost of fuel for motor vehicles, ships, machines, mechanisms and equipment spent within the norms established by the head of the organization independently or by contacting an accredited testing laboratory is included in the normalized costs.
New benefits for research organizations and science and technology parks
Paragraph 7 establishes benefits for real estate tax and land tax for organizations that are scientific organizations and scientific and technological parks. Thus, capital structures (buildings, structures) and their parts are exempt from real estate tax if they are owned or leased by such organizations. Also, land plots (parts of them) of scientific organizations and scientific and technological parks, and land plots (parts of them) on which capital structures (buildings, structures) are located, their parts leased, or other paid or gratuitous use of scientific organizations and scientific and technological parks are exempt from land tax.
Regulation of the land tax tax base
The procedure for determining the tax base of land tax for 2020 has been established. For example, the tax base of land tax for residential multi-apartment, residential estate (including horticultural associations and dacha cooperatives) and recreational zones is set in Belarusian rubles as of the date of evaluation of these zones, indexed using the established consumer price growth index for 2018 and forecast consumer price growth indices for 2019 and 2020. For public-business and industrial zones - in Belarusian rubles on the date of evaluation of these zones, indexed using the forecast consumer price growth index for 2020.
Regulation of the simplified tax system
Decree No. 503 amended the procedure for applying the simplified tax system. Thus, for organizations to use the USN with the payment of value-added tax, the gross revenue (determined by the rules of the tax code of the Republic of Belarus) must not exceed 2,046,668 Belarusian rubles. To use simplified taxation system without paying VAT revenue should not exceed 1 404 286 rubles.
If individual entrepreneurs wish to apply the USN with VAT, they should not exceed the gross revenue of more than 441,000 Belarusian rubles.
The transition to the USN in 2021 is possible if the gross revenue for the first 9 months of 2020 does not exceed 1,538,843 Belarusian rubles and 330,750 Belarusian rubles for organizations and individual entrepreneurs, respectively.
To keep records in the book of income and expenses, the organization's revenue must not exceed 774,900 Belarusian rubles.
Reduced state fee for obtaining an extract from the unified state register in electronic form
Paragraph 11 of the Decree stipulates that the rate of the state fee for obtaining an extract from the Unified state register of legal entities and individual entrepreneurs (hereinafter-usr) in the case of obtaining an extract through the usr portal, is reduced by 50 percent and is 13.50 rubles. This state duty rate is valid only if you receive the statement in electronic form: the statement is sent to your e-mail as soon as possible after payment. It should be noted that this version of the statement from the unified state register will not be suitable if the document needs to be legalized.
Gratuitous transfer of objects in favor of Belarus is not a realisation
According to paragraph 12 of Decree No. 503, the gratuitous transfer of property (works, services) transferred and accepted in accordance with the legislation is not recognized as a sale if such objects are transferred to the Republic of Belarus or its administrative-territorial units represented by state bodies and other legal entities. this rule is effective from may 15, 2019.
The costs for tax purposes include insurance premiums for insurance of goods for sale
In connection with the adjustment of clause 1.2. Decree No. 280 of may 19, 2008 "on the inclusion of insurance premiums for types of voluntary insurance that are not related to life insurance in the costs of production and sale of goods (works, services)" insurance premiums for voluntary insurance of goods intended for sale and property leased (transferred to financial lease (leasing) may be included in the costs of production and sale of goods (works, services). Moreover, such expenses can be included in the costs from January 01, 2019 (para. 4 p. 16 of Decree No. 503). These changes apply to relationships that have occurred since January 01, 2019.
Changes in the tax secrecy
According to paragraph 14 of Decree No. 503 from 10.04.2020 information is not recognized as a tax secret:
- provided to the payer in relation to himself;
- about the surname, proper name, patronymic (if any) of the payer-an individual, including an individual entrepreneur, the name and location of the payer-organization;
- disclosed by the payer independently or with his consent;
- publicly available, including annual accounting and (or) financial statements of organizations published in accordance with the law for public information;
- provided through a single portal of electronic services of the national automated system for organizations and individuals registered as individual entrepreneurs:
about paid types of taxes, fees (duties) and applied special tax regimes;
about the average number of employees;
contained in the annual accounting and (or) financial statements.
At the same time, it is important that the information provided through the single portal of electronic services regarding payers defined by the Council of Ministers will still constitute a tax secret.