Corporate tax in Belarus

Summary

Corporate Profits Tax Rate (%) 18 / 25 (a)
Capital Gains Tax Rate (%) 18 / 25 (b)
Withholding Tax Rate (%) (c)
Dividends 12
Interest 0 / 10 (d)
Royalties 15
Freight and Transportation 6
Capital Gains 12
Other Income 15 (e)
Net Operating Losses (years)
Carryback 0
Carryforward 10

a) The 18% rate is the standard profits tax rate. The 25% rate applies to profits of banks and insurance companies. Certain activities are subject to special tax rates and tax incentives are available. For details, see Section B.

b) The 18% rate is the standard profits tax rate. The 25% rate applies to profits of banks and insurance companies.

c) Withholding tax applies to income derived from sources in Belarus by for­eign legal entities that do not carry out business activities in Belarus through a permanent establishment. Withholding tax rates may be reduced or elimi­nated under applicable double tax treaties. For a table of treaty withholding tax rates, see Section F.

d) This withholding tax applies to income derived from debt obligations, such as borrowings or loans, that are not formalized by securities. Exemption is available for certain public debts and certain types of bonds. Interest from certain loans is exempt from withholding tax in 2016. This exemption applies to companies whose permanent location is confirmed by the Bankers Alma­nac (except for residents of offshore zones).

e) The Tax Code specifies the types of income subject to withholding tax.

Taxes on corporate income and gains

Corporate profits tax. Companies incorporated in Belarus are subject to corporate profits tax on their worldwide income. Non­residents that carry out business activities in Belarus through a permanent establishment are subject to the corporate profits tax only on the income derived from their activities carried out in Belarus through such permanent establishment.

Income derived from sources in Belarus by nonresidents that do not carry out business activities in Belarus through a permanent establishment is subject to withholding tax. For withholding tax rates, see Sections A and F.

Rates of corporate profits tax. The standard corporate profits tax rate is 18%. A 25% rate applies to profits of banks and insurance companies.

Reduced tax rates apply to the following types of income:

  • Profits of organizations that are members of the scientific and technological association founded by Belarusian State University and profits from the sale of information technologies and ser­vices for their development: 5%
  • Profits of producers of high-technology products: 10%
  • Dividends paid to Belarusian companies: 12%
  • Profits of science and technology parks, technology-transfer centers, and residents of science and technology parks (except for corporate profits tax that is calculated, withheld and remit­ted by a tax agent): 10%

Tax exemptions and reductions. Belarus offers various tax exemp­tions and reductions. Some of these exemptions and reductions are summarized below.

Certain types of income are not subject to tax, including divi­dends accruing to the following:

  • Belarusian societies of disabled people, Belarusian societies of deaf people, Belarusian societies of sight-disabled people (for dividends received from unitary enterprises [commercial organi­zations that do not have shares or participatory interests] owned by these Belarusian societies)
  • Venture organizations and Belarusian innovation funds (for dividends received from innovation organizations)

If certain conditions are met, profits subject to tax can be decreas­ed by amounts used to finance state social objects (including educational, health care, sports and religious organizations) or used for construction or reconstruction of sports facilities, up to 10% of taxable profits.

Profits derived from certain business activities are exempted from the tax, including the following:

  • Manufacturing of food products for infants
  • Services of hotels located in tourist locations approved by the President of Belarus for the first three years of operation
  • Transactions with government securities, securities of the national Bank of the Republic of Belarus and some other securities
  • Investment of insurance reserves on voluntary life insurance agreements if the profit is used to increase funds accumulated in the personal accounts of the policyholders

All the benefits described above can be claimed only if special conditions and procedures are met and, in certain circumstances, if special state permits are received.

Free-economic zones. A free-economic zone (FEZ) is located in each of the six regional centers of Belarus (Brest, Gomel, Grodno, Minsk, Mogilev and Vitebsk). An FEZ resident is exempt from profits tax for five years beginning on the date on which profits are declared for the first time. After the end of the five-year period, the FEZ resident pays corporate profits tax at 50% of the standard rate, but the tax rate may not exceed 12%.

In addition, an FEZ resident may apply a reduced value-added tax (VAT) rate of 10%.

The benefits mentioned above are provided to an FEZ resident with respect to the following profits:

  • Profits received from goods (works and services) manufactured by an FEZ resident and sold to other FEZ residents, foreign legal entities or foreign individuals
  • Profits from goods manufactured by a resident of an FEZ and realized in Belarus if the goods are defined as substitutes for imported goods on the list specified by the government and approved by the President of Belarus

Special tax regimes. Belarus has several tax regimes, which are summarized below.

Simplified system of taxation. Business entities may pay a unified tax under a simplified system of taxation. Business entities that pay the unified tax are not subject to corporate profits tax, and under certain conditions, to VAT (and some other taxes). Under this system, the tax due is either 5% of gross revenues or, if the business entity continues to pay VAT, 3% of gross revenues. Certain types of non-operating income are subject to a 16% rate.

Unified tax on agricultural producers. Agricultural producers may pay a unified tax at a rate of 1% of gross revenues from the sale of goods (works and services) and other property and income de­rived from non-sales transactions. An agricultural entity can pay the unified tax if its annual gross revenue consists of at least 50% of revenue from the sale of its own manufactured crop products (excluding flowers and ornamental plants), livestock products, fish breeding and bee breeding products.

Tax on gambling industry. Gambling (except for lotteries) is sub­ject to fixed tax rates, depending on the number of items of operatio nal equipment used (for example, gambling tables, slot machines and gambling equipment used to register betting). The positive difference between the amount of received bids and the composed winning fund (fund to be paid to the winner) is subject to additional gambling tax at a rate of 4%.

Tax on income generated by lottery sales. Lottery sales are sub­ject to an 8% tax rate on the gross revenue less the awarded prize fund.

Tax on electronic interactive games. The tax base for the tax on electronic interactive games equals the difference between the amount of revenue from electronic interactive games and the composed winning fund (fund to be paid to the winner). The tax rate is 8%. Revenue from electronic interactive games is exempt from corporate profits tax. Turnover received from stakes (bets) with respect to the holding of electronic interactive games is exempt from VAT.

Tax on imputed income. Providers of car maintenance and repair services are subject to 5% tax on imputed income. The tax base for the tax on imputed income is calculated by multiplying the average monthly number of employees by the monthly basic prof­itability of car maintenance and repair services per employee.

Taxation of commercial organizations and individual entrepre­neurs engaged in medium-sized or small towns and rural areas. Commercial organizations and individual entrepreneurs engaged in business in medium-sized or small towns and rural areas may qualify for exemption from the following taxes, duties and other obligations:

  • Corporate profits tax and personal income tax, respectively, dur­ing the seven-year period after the registration of the business
  • Real estate tax on assets located in medium-sized or small towns and rural areas during the seven-year period after the registra­tion of the business
  • State duties for obtaining special permissions (licenses), the introduction of changes into special permissions and the oblig­atory sale of foreign currency received under transactions with Belarusian nonresidents

They may apply for the above tax incentives if special conditions are met and special procedures are followed. They may also re­ceive other benefits.

Taxation of residents of the High Technologies Park. The High Technologies Park was established in 2005 for a period of 15 years. Park residents are exempt from taxes and other obliga tory pay­ments to the state budget and state non-budget funds with respect to revenue derived from the sale of goods (works, services and property rights for intellectual property). Business entities oper­ating in the park may engage only in the high technology activi­ties set forth in the Decree of the President of Belarus “Concerning the Park of High Technologies.”

Taxation of the members of the Infopark Science and Technology Association. The members of the Infopark Science and Technol­ogy Association are exempt from taxes and other obligatory pay­ments to state non-budget funds with respect to revenue derived from the sale of information technologies and services for the development of such technologies, except for profits tax paid at a rate of 5% and Social Fund contributions.

China-Belarus Industrial Park (The Great Stone). The China-Belarus Industrial Park (The Great Stone; CBIP) was created in 2012 as a territory with a special regime for entrepreneurial activ­ity. Residents of the CBIP may benefit from tax incentives, such as a 10-year exemption from the following taxes:

  • Corporate profits tax from the realization of their own manufac­tured goods (works and services) produced in the CBIP territory
  • Real estate tax on buildings and constructions located in the CBIP
  • Land tax on land located in the CBIP territory

Personal income tax at a rate of 9% applies to the income of a CBIP resident’s employees, and social security contributions are calculated on the basis of an amount that is not more than the average salary in Belarus for the preceding month. Other benefits are also available.

Capital gains. Capital gains derived from the alienation of equity interests in the charter capital of Belarusian companies are taxed at a standard corporate profits tax rate of 18%. A 25% rate applies to profits of banks and insurance companies.

Capital gains derived by nonresidents without a permanent estab­lishment in Belarus are subject to a 12% withholding tax, unless otherwise provided in a double tax treaty.

Administration. The basic tax reporting period is the calendar quarter. The tax return for the first, second and third quarters must be filed by the 20th day of the month following the respective reporting quarter. The tax return for the fourth quarter must be filed by 20 March. In general, the corporate profits tax must be paid by the 22nd day of the month following the reporting quarter.

Corporate profits tax for the fourth quarter of 2015 must be paid by 22 December 2015 in an amount equal to two-thirds of the tax payable in the third quarter of 2015, with subsequent additional payment or reduction not later than 22 March 2016.

Non-payment or incomplete payment of tax is subject to a fine of 20% of the unpaid tax but not less than 10 basic units (approxi­mately EUR100 or USD110). A fine for late submission of the tax return can be up to 10% of the unpaid tax but not less than 10 basic units. In addition to these fines, a penalty is applied for every day of delay in tax payment. The penalty is assessed on the basis of the refinance rate established by the National Bank of the Republic of Belarus (currently, 25%).

Dividends. Dividends paid to foreign legal entities without a per­manent establishment in Belarus are subject to a 12% withhold­ing tax, unless otherwise provided by a double tax treaty. The distribution of dividends to resident companies is subject to cor­porate profits tax.

Foreign tax relief. A tax credit for foreign tax paid by, or withheld from, a Belarusian taxpayer is granted on submission to the local tax authorities of a certificate issued by the competent authorities of the foreign country that confirms the amount of tax paid (withheld) in that foreign state.

Determination of taxable profits

General. Taxable profits are based on the financial statements prepared according to the accounting standards of Belarus. The tax able profits are determined by adjusting the profits reported in the financial statements by items stipulated by the Tax Code. Adjust ments relate to special income and ex pense items and usu­ally act to restrict tax-deductible ex penses. For example, travel expenses are deductible within certain limits. The list of deduct­ible ex penses is open. Special rules determine the taxable profits of banks and insurance companies.

Inventories. Inventories are carried at actual cost. The allowed accounting methods for determining cost value are cost of each unit, average cost and valuation price, including first-in, first-out (FIFO).

Provisions. Banks can establish deductible provisions for unrecov­erable loans and securities. The National Bank of the Republic of Belarus regulates the establishment of such provisions.

Tax depreciation. The amount of depreciation reported in the fi­nancial statements may be deducted for tax purposes if the fixed assets are used in an entrepreneurial activity.

Investment deduction. On the acquisition and/or reconstruction of tangible assets, a taxpayer can immediately deduct a percentage of the initial value of the assets (value of investments for recon­struction) for corporate profits tax purposes. The following are the percentages:

  • Buildings and structures: not more than 10%
  • Second group: alienation of fixed assets, construction-in-progress sites, uninstalled equipment and enterprise as an asset complex

The investment deduction does not reduce the base for calcula­tion of the depreciation deduction for tax purposes, which is defined as the initial cost of the asset.

Relief for losses. Belarusian tax law contains loss carryforward rules under which losses can be carried forward to the following 10 years, beginning with those incurred in 2011. Losses are car­ried forward in groups of operations against identical types of income. The following are the groups:

  • First group: operations with financial derivatives and securities
  • Second group: alienation of fixed assets, construction-in-progress sites and uninstalled equipment

The remaining losses are carried forward regardless of the opera­tions and activities in which they were incurred. To apply the loss carryforward rules, a company must maintain separate account­ing and keep documents confirming the amount of losses.

The Belarusian tax law does not provide for loss carrybacks.

Groups of companies. The Belarusian tax law does not provide for tax groups. Each legal entity is a separate taxpayer.

Other significant taxes

The following table summarizes other significant taxes.

Nature of tax Rate (%)
Value-added tax (VAT)
Standard rate 20
Sales of specified products (for example, goods for children and foods) 10
Exports of goods and services 0
Excise duties; imposed at fixed amounts
per unit of goods (specific rates) or as a
percentage of the value of goods (ad valorem
rates); levied on various products (alcohol,
tobacco products, certain types of fuel, cars and other items)
Various
Payroll taxes
Social fund contributions; paid by the employer 34
Pension tax; withheld from employee 1
Land tax; annual tax imposed at fixed amount per hectare of land area Various
Ecological tax; imposed at fixed amount per units of various contaminants Various
Asset tax; annual tax imposed on real estate, including construction-in-progress 1 to 2
Local taxes and duties Various
Offshore levy; imposed on payments
or transfers of cash by residents to
nonresidents registered in tax havens; paid by residents
15

Miscellaneous matters

Foreign-exchange controls. The Belarusian ruble (BYR) has lim­ited convertibility. The Council of Ministers of the Republic of Belarus, the National Bank of the Republic of Belarus, The State Control Committee and State Customs are the currency regula­tion and control bodies in Belarus.

Belarus imposes detailed and severe currency control regulations. These regulations impose restrictions, controls and special report­ing with respect to transactions involving the use of foreign and national currency, as well as to settlements with nonresidents.

Companies doing business in Belarus must open a bank account with a bank in Belarus.

Debt-to-equity ratios. Domestic thin-capitalization rules general­ly apply to a Belarusian company if any of the following circum­stances exists:

  • The Belarusian company’s controlled debt-equity ratio equals or exceeds 3:1, and it meets both of the following conditions: — It does not produce excise goods.

— It has a controlled debt to a Belarusian tax nonresident (foreign company or nonresident individual) directly or in­directly owning more than a 20% share in the charter fund of the Belarusian company (in some cases, this covers debts to other persons related to such Belarusian tax nonresident).

  • The Belarusian company’s controlled debt-equity ratio exceeds 1:1, and it meets both of the following conditions:

— It produces excise goods.

— It has a controlled debt to a Belarusian tax nonresident (foreign company or nonresident individual) directly or in­directly owning more than a 20% share in the charter fund of the Belarusian company (in some cases, this covers debts to other persons related to such Belarusian tax nonresident).

  • The Belarusian company’s controlled debt-equity ratio exceeds 1:1, and it has a controlled debt to a Belarusian tax resident (Belarusian company or resident individual) directly or indi­rectly owning more than a 20% share in the charter fund of the Belarusian company (in some cases this covers debts to other persons related to such Belarusian tax resident).

Thin-capitalization rules do not apply to banks or insurance com­panies or to lessors or landlords if they receive rental payments (lease payments) exceeding 50% of the total revenue from the sale of goods (works and services) and property rights as well as income from renting and leasing operations.

Transfer pricing. The tax authorities may control prices set in the following types of transactions:

  • Transactions related to sale or purchase of immovable property if the price of the transaction deviates by more than 20% from the arm’s-length price for identical (homogeneous) immovable property. This group includes transactions involving the follow­ing:

— Immovable property (its part) as well as transactions that result in the transfer of a shared construction object (con­struction object) to the interest holder (the owner of housing bonds)

— Housing bonds in the secondary market (excluding opera­tions of issuers with self-issued bonds) after the state regis­tration of construction objects

  • Transactions with related parties or offshore zone residents if the total value of the transactions for the year exceeds BYR1 billion (excluding indirect taxes). This group includes transactions related to the following:

— Foreign trade with related parties or residents of offshore zones.

— Foreign trade with related parties or offshore zone residents undertaken through a chain of transactions with an interme­diary third party that is not a related party to the companies involved in the controlled transactions (intermediary trans­actions). The intermediary transaction is a direct transaction with a related party (ignoring involvement of an intermedi­ary) if such intermediary does not perform additional func­tions in this chain of transactions except for an agency func­tion associated with the sale or purchase of goods (works and services) between two related parties and does not use any assets in carrying out its agency function associated with the sale or purchase of goods (works and services) between two related parties.

  • Transactions with Belarusian related parties (including interme­diary transactions) that are exempted from taxation as a result of the application of a special taxation regime or similar rulings
  • Large cross-border transactions, if the total value of such trans­actions exceeds BYR10 billion within the year (excluding indi­rect taxes). This group includes the following types of transac­tions:

— Transactions of large taxpayers

— Transactions related to sale or purchase of strategic goods from the list to be approved by the government of Belarus

The following transactions are excluded from the list of con­trolled transactions:

  • Transactions for which the price is established by international treaties of Belarus
  • Bank operations (according to the list established by the Bank­ing Code of Belarus)
  • Operations with securities and derivatives on the organized se­curities market

The comparability of prices to market prices is reviewed only for the purpose of calculating corporate profits tax, and the prices are adjusted only if this will increase the tax. The following methods are used to determine for tax purposes the conformity of transac­tion prices to market prices:

  • Comparable market price method
  • Resale price method
  • Cost-plus method
  • Comparable profits method
  • Profit-split method

Domestic law does not contain requirements for taxpayers to prepare and submit specific notifications regarding controlled transactions. However, effective from 1 July 2016, all VAT payers will be required to prepare and submit electronic invoices for VAT purposes through the web portal of the Ministry of Taxes and Duties of Belarus. The form of the VAT invoice will include, among other items, fields on whether a taxpayer’s counterparty is a related party, an offshore zone resident or one of the large tax­payers, and on whether a transaction is connected with the sale or purchase of strategic goods. Consequently, by means of elec­tronic VAT invoices, the tax authorities will receive information on the controlled transactions of a taxpayer on a real-time basis.

On a specific request of the tax authorities, a taxpayer must pre­pare and submit documentation proving that the prices set in the controlled transactions are at market level. The Tax Code pro­vides for the following two types of documentary confirmation for transfer-pricing purposes (specific requirements for each type are set out in the Tax Code):

  • Documentation for large cross-border transactions (see above)
  • Confirmation of the economic feasibility of applied prices for all other types of controlled transactions

The documentation package must be submitted within the num­ber of days prescribed in the tax authorities’ request. However, such term may not be less than the following:

  • Ten working days from the date of receipt of notification under a desk tax audit
  • Five working days from the date of receipt of notification under a field tax audit

Tax treaties

Belarus has entered into double tax treaties with Armenia, Austria, Azerbaijan, Bahrain, Bangladesh, Belgium, Bulgaria, China, Croatia, Cyprus, the Czech Republic, Egypt, Estonia, Fin­land, Georgia, Germany, Hungary, India, Iran, Ireland, Israel, Italy, Kazakhstan, Korea (North), Korea (South), Kyrgyzstan, Kuwait, Laos, Latvia, Lebanon, Lithuania, Macedonia, Moldova, Mongo­lia, the Netherlands, Oman, Pakistan, Poland, Qatar, Romania, the Russian Federation, Saudi Arabia, Singapore, the Slovak Republic, Slovenia, South Africa, Sri Lanka, Sweden, Switzerland, Syria, Tajikistan, Thailand, Turkey, Turkmenistan, Ukraine, United Arab Emirates, Uzbekistan, Venezuela, Vietnam and Yugoslavia (ap­plied to Serbia).

Belarus has also signed double tax treaties with Indonesia and Libya, but these treaties have not yet entered into force.

Belarus honors several of the double tax treaties entered into by the former USSR, including treaties with Denmark, France, Japan, Malaysia, Spain, the United Kingdom and the United States. The Ministry of Taxes and Duties has indicated that the treaties with Canada and Norway are no longer effective.

The following table presents the withholding tax rates under Belarusian tax treaties and under the former USSR’s treaties honored by Belarus.

Dividends

%

Interest

%

Royalties

%

Armenia 10/12 (a) 0/10 (v) 10/15 (tt)
Austria 5/12 (e) 0/5/10 (gg) 5/15 (uu)
Azerbaijan 12 0/10 (v) 10/15 (tt)
Bahrain 5 0/5 (vv) 5
Bangladesh 10/12 (ggg) 0/7.5 (yy) 10
Belgium 5/12 (e) 0/10 (z) 5
Bulgaria 10/12 (ww) 0/10 (v) 10/15 (tt)
China 10/12 (ww) 0/10 (u) 10/15 (tt)
Croatia 5/12 (e) 10 10/15 (tt)
Cyprus 5/10/12 (d) 5/10 (xx) 5/15 (uu)
Czech
Republic 5/10 (jj) 0/5 (vv) 5
Denmark (q) 12 0 0
Egypt 12 10 15
Estonia 10/12 (ww) 0/10 (s)(vv) 10/15 (tt)
France (q) 12 0/10 (r) 0
Finland 5/12 (e) 0/5/10 (hh) 5/15 (uu)
Georgia 5/10 (jj) 0/5/10 (hhh) 5
Germany 5/12 (dd) 0/5/10 (ee) 3/5/15 (ff)
Hungary 5/12 (e) 5 5
India 10/12 (g) 0/10 (bb)(vv) 15
Iran 10/12 (g) 0/5/10 (v)(xx) 5/15 (uu)
Ireland 0/5/10 (oo) 5 5
Israel 10/12 (ww) 0/5/10 (t) 5/10/15 (cc)
Italy 5/12 (e) 0/8/10 (mm) 6/15 (zz)
Japan (q) 12 0/10 (ss) 0/10/15 (n)
Kazakhstan 12 0/10 (v) 15
Korea (North) 10/12 (ww) 0/10 (s)(v) 10/15 (tt)
Korea (South) 5/12 (e) 0/10 (p) 5
Kyrgyzstan 12 0/10 (v) 15
Kuwait 0/5 (x) 0/5 (vv) 10
Laos 5/10/12 (aaa) 0/8/10 (bbb) 5/15 (uu)
Latvia 10/12 (ww) 0/10 (s)(vv) 10/15 (tt)
Lebanon 7.5 0/5 (v) 5
Lithuania 10/12 (ww) 0/10 (s)(vv) 10/15 (tt)
Macedonia 5/12 (e) 10 10
Malaysia (q) 12 0/10 (s)(v)(bb) 10/15 (o)
Moldova 12 0/10 (bb) 15
Mongolia 10/12 (ww) 0/10 (nn) 10/15 (tt)
Netherlands 0/5/12 (e)(w) 0/5 (yy) 3/5/10/15 (f)
Oman 0/5 (ii) 0/5 (ii) 10
Pakistan 10/12 (g) 0/10 (s)(v)(bb) 15
Poland 10/12 (a) 0/10 (bb) 0
Qatar 5 0/5 (v) 5
Romania 10/12 (ww) 0/10 (v) 15
Russian
Federation 12 0/10 (v) 10/15 (tt)
Saudi Arabia 5 5 10
Singapore 0/5/12 (ccc) 0/5/10 (ddd) 5/15 (uu)
Slovak
Republic 10/12 (g) 0/10 (v) 5/10/15 (i)
Dividends

%

Interest

%

Royalties

%

Slovenia 5 0/5 (pp) 5
Slovenia 5 0/5 (pp) 5
South Africa 5/12 (e) 0/5/10 (l) 5/10 (m)
Spain (q) 12 0 0/5 (y)
Sri Lanka 7.5/10/12 (eee) 0/10 (fff) 10/15 (tt)
Sweden 5/10/12 (b) 0/5/10 (rr) 3/5/10/15 (c)
Switzerland 5/12 (e) 0/5/8/10 (aa) 3/5/10/15 (c)
Syria 12 10 15
Tajikistan 12 0/10 (bb) 15
Thailand 10 0/10 (qq) 15
Turkey 10/12 (g) 0/10 (v) 10
Turkmenistan 12 0/10 (v) 15
Ukraine 12 10 15
United Arab Emirates 5/10 (j) 0/5 (s) 5/10/15 (k)
United Kingdom (q) 0 0 0
United States (q) 12 0 0
Uzbekistan 12 0/10 (v)(bb) 15
Venezuela 5/12 (e) 0/5 (kk) 5/10 (ll)
Vietnam 12 0/10 (v) 15
Yugoslavia 5/12 (e) 8/10 (h) 10/15 (tt)
Non-treaty countries 12 10 15

a) The 10% rate applies if the recipient is the actual owner of the dividends and owns at least 30% of the capital of the company that pays the dividends. Otherwise, a 12% rate applies.

b) The 5% rate applies if the recipient is the actual owner of dividends and owns at least 30% of the capital of the company that pays the dividends. The 10% rate applies in other cases if the recipient is the actual owner of dividends. Otherwise, the 12% rate applies.

c) The 3% rate applies if the recipient is the actual owner of royalties paid for the use of or grant of the right to use patents or secret formulas or processes, or for information on industrial, business or scientific experience. The 5% rate applies if the recipient is the actual owner of royalties for the use of or grant of the right of use of industrial, business or scientific equipment. In all other cases, the 10% rate applies if the recipient is the actual owner of the royalties. Otherwise, the 15% rate applies.

d) The 5% rate applies if the recipient is the actual owner of the dividends and has invested at least ECU200,000 in the equity of the company that pays the income. The 10% rate applies if the recipient is the actual owner of the divi­dends and owns at least 25% of the capital of the company that pays the dividends. Otherwise, the 12% rate applies.

e) The 5% rate applies if the recipient of income is the owner of at least 25% of the capital of the company that pays the dividends. Otherwise, the 12% rate applies.

f) The 3% rate applies to amounts paid for the use of or grant of the right of use of patents, trademarks, designs, models, plans, or secret formulas or pro­cesses, or for information on industrial, business or scientific experience. The 5% rate applies to amounts paid for the use of or grant of the right to use industrial, business or scientific equipment (including road transport vehi­cles). The 10% rate applies to amounts paid for the use of or grant of the right to use copyrights of works of literature, art or science, including cinemato­graphic films, as well as for films or recordings used in television or radio programs. Otherwise, the 15% rate applies.

g) The 10% rate applies if the recipient is the actual owner of the dividends and owns at least 25% of the capital of the company that pays the income. Other­wise, the 12% rate applies. Under the Pakistan and Turkey treaties, the recipi­ent does not need to be the actual owner of the dividends to apply the 10% rate.

h) The 8% rate applies if the recipient is the actual owner of the interest. Otherwise, the 10% rate applies.

i) The 5% rate applies to amounts paid for the use of copyrights of works of literature, art or science, including cinematographic films, as well as for films or recordings and other means for the transmission of images or sound. The 10% rate applies to amounts paid for patents, trademarks, designs, charts, models, plans or secret formulas or processes, for information on industrial, business or scientific experience, for the use of or cession of the right to use industrial, business or scientific equipment, or for transport vehicles. Other­wise, the 15% rate applies.

j) The 5% rate applies if the actual owner of the dividends is a company owning USD100,000 or more in the company that pays the dividends. Otherwise, the 10% rate applies.

k) The 5% rate applies to amounts paid for the use of or grant of the right to use copyrights of scientific works, patents, trademarks, designs, models, plans, or secret formulas or processes, for the right to use information on industrial, business or scientific equipment or transport vehicles, or for information on industrial, business or scientific experience. The 10% rate applies to amounts paid for the use of or grant of the right to use copyrights for works of litera­ture or art, including cinematographic films as well as films or recordings used in television or radio programs. Otherwise, the 15% rate applies.

l) The 0% rate applies if the recipient of the interest income is the government, a government body or a company that is fully owned by the state. The 5% rate applies if the recipient of the interest income is a bank or other financial institution. Otherwise, the 10% rate applies.

m) The 5% rate applies to amounts paid for industrial, business or scientific equipment or transport vehicles. Otherwise, the 10% rate applies.

n) The 0% rate applies to amounts paid for the use of or grant of the right to use copyrights of works of literature, art or science, including cinematographic films, as well as for films or recordings used in television or radio programs. The 10% rate applies to amounts paid for the use of or grant of the right to use patents, trademarks, designs, charts, models, plans or secret formulas or processes, for information on industrial, business or scientific experience, and for the use of or grant of the right to use industrial, business or scientific equipment. Otherwise, the 15% rate applies.

o)The 10% rate applies if the recipient is the actual owner of royalties paid for the use of or grant of the right to use patents, trademarks, designs, models, plans, secret formulas or processes, or copyrights of scientific works, for the use of or grant of the right to use industrial, business or scientific equipment, and for the use of or grant of the right to use information on industrial, busi­ness or scientific experience. Otherwise, the 15% rate applies.

p) The 0% rate applies if any of the following circumstances exist:

– The interest income is derived from the sale on credit of industrial, com­mercial or scientific equipment.

– The recipient of the interest income is the government, the central bank, local government bodies or financial institutions performing state func­tions, or the interest is paid on loans that are guaranteed or indirectly financed by such bodies or institutions.

q) Belarus abides by the double tax treaty between the former USSR and this state. The table shows the tax rates under such treaty.

r) The 0% rate applies to interest on bank and commercial loans. Otherwise, the 10% rate applies.

s) The 0% rate applies to interest on government-guaranteed loans.

t) The 0% rate applies if the recipient of the interest income recipient is a gov­ernment, a local government body or the central bank. The 5% rate applies if the recipient and the actual owner of interest income is a bank or other finan­cial institution or if the interest is paid with respect to sale on credit of industrial, business or scientific equipment. Otherwise, the 10% rate applies.

u) The 0% rate applies if the recipient of the interest income is a government, local government body, central bank or other financial institution that is wholly owned by the state. Otherwise, the 10% rate applies.

v) The 0% rate applies if the recipient of the interest income is the government or the central bank (in the case of Turkey, the 0% rate also applies to interest accruing in Belarus and paid by Eximbank of Turkey on loans for the pur­chase of industrial, business, commercial, medical or scientific equipment. Otherwise, the higher rates apply.

w) The 0% rate applies if either of the following conditions is met:

– The dividend recipient owns more than 50% of the dividend-paying com-pany’s capital, provided that the dividend recipient’s contribution to the company’s capital is at least ECU250,000.

– The dividend recipient owns over 25% of the dividend-paying company’s capital, and its contribution to the company’s capital is guaranteed or insur­ed by the government.

x) The 0% rate applies if the dividend recipient is the government, the central bank, other government agencies or financial institutions. Otherwise, the 5% rate applies.

y) The 0% rate applies to amounts paid for the use of or cession of the right to use copyrights of works of literature, music, art or science, except for cine­matographic films, as well as for films or recordings used in television or radio programs. Otherwise, the 5% rate applies.

z) The 0% rate applies if one of the following circumstances exist:-

– The loan is approved by the government.

– The interest is charged with respect to the sale on credit of industrial, medical or scientific equipment and related services.

– A loan intended to promote exports that involves the delivery of industrial, medical or scientific equipment and related services is granted, insured or guaranteed by the state.

Otherwise, the 10% rate applies.

(aa) The 0% rate applies if one of the following requirements is met:

  • The loan is approved by the government.
  • The interest is received with respect to the sale on credit of industrial, commercial, medical or scientific equipment.
  • The interest is paid on state securities.

The 5% rate applies to interest income relating to bank loans. The 8% rate applies if the recipient is the actual owner of the interest income. Otherwise, the 10% rate applies.

(bb) The 0% rate applies if the loan is approved by the government.

(cc) The 5% rate applies to amounts paid for the use of copyrights of works of literature, art or science (except for cinematographic films) or for the right to use industrial, commercial or scientific equipment or transport vehicles. The 10% rate applies if the recipient is the actual owner of the royalties. Otherwise, the 15% rate applies.

(dd) The 5% rate applies if the recipient is the actual owner of the income, owns

over 20% of the dividend-paying company’s capital and has made a contri‑

bution of at least EUR81,806.70. Otherwise, the 12% rate applies. (ee) The 0% rate applies if any of the following circumstances exist:

  • The interest originates in Belarus and is paid to the government of Germany, the Deutsche Bundesbank, the Kreditanstalt für Wiederaufbau or the Deutsche Finanzierungsgesellschaft für Beteiligungen in Entwicklungsländern.
  • The interest income is received with respect to loans secured by export loan guarantees (Hermes-Deckung) provided by the German government.
  • The recipient of the interest income is the government or central bank of Belarus.
  • The recipient is the actual owner of interest that is paid with respect to the sale on credit of industrial, business or scientific equipment.

The 5% rate applies if the recipient is the actual owner of the interest income. Otherwise, the 10% rate applies.

(ff) The 3% rate applies if the recipient is the actual owner of royalties paid for the use of or cession of the right to use copyrights of scientific works, patents, trademarks, designs, models, plans or secret formulas or processes, or for the right to use information regarding industrial, commercial or research experi­ence. The 5% rate applies if the recipient is the actual owner of royalties for the use of or cession of the right to use copyrights of works of literature and art, including cinematographic films, as well as films or recordings used in television or radio programs, or for the use of or cession of the right to use all types of equipment and transport vehicles. Otherwise, the 15% rate applies.

(gg) The 0% rate applies if any of the following circumstances exist:

  • The loan is approved by the government.
  • The recipient of the interest income is the government, local authorities or the central bank.
  • The interest is paid with respect to a lending or a loan guaranteed or

insured by state companies with a view to promoting exports and is associ‑

ated with the delivery of industrial, commercial, medical or scientific

equipment (including Österreichische Kontrollbank Aktiengesellschaft). The 5% rate applies if the recipient is the actual owner of the interest income. Otherwise, the 10% rate applies.

(hh) The 0% rate applies if the recipient of the interest income is the government, the central bank, the Finnish Fund for Industrial Cooperation (FINNFUND) or the Finnish export credit agency (FINNVERA). The 5% rate applies if the recipient of the interest income is the actual owner of the interest income. Otherwise, the 10% rate applies.

(ii) The 0% rate applies if the income recipient is the government, the central bank, the State General Reserve Fund of Oman or a company that fully or largely belongs to the state. Otherwise, the 5% rate applies.

(jj)    The 5% rate applies if the recipient of the dividends is the actual owner of the income and owns at least 25% of the capital of the company paying the income. Otherwise, the 10% rate applies.

(kk) The 0% rate applies if the recipient is the actual owner of the interest in­come and if one of the following requirements is met:

  • The recipient of the interest income is the government, a state body, the central bank or a company that fully or largely belongs to the state.
  • The interest is paid on a government-guaranteed loan.
  • The interest is paid on a loan that is intended to promote exports and that is connected with the delivery of equipment and transport vehicles by an enterprise of the other treaty state.
  • The interest is paid with respect to the sale on credit of equipment and transport vehicles.

Otherwise, the 5% rate applies.

(ll)    The 5% rate applies to royalties received for the use of or cession of the right to use copyrights of works of science or computer applications, or for the use of or cession of the right to use equipment and transport vehicles. Otherwise, the 10% rate applies.

(mm) The 0% rate applies any of the following circumstances exists:

  • The interest is paid by the government or a state body.
  • The interest is paid to the government, a government body, a local agency or body (including a financial institution) that fully belongs to the state or a government body.
  • The interest is paid to another agency or body (including a financial in­stitution) on a loan granted due to the application of an interstate treaty. The 8% rate applies if the recipient is the actual owner of the interest in­come. Otherwise, the 10% rate applies.

(nn) The 0% rate applies to interest on loans granted to the government or the central bank. Otherwise, the 10% rate applies.

(oo) The 0% rate applies to dividends paid to any of the following:

  • The National Treasury Management Agency of Ireland
  • The National Reserve Pension Fund of Ireland
  • A company, including an agency or an institution, that fully or partially belongs to the state

The 5% rate applies to dividends paid to a recipient owning at least 25% of the dividend-paying company’s capital. Otherwise, the 10% rate applies.

(pp) The 0% rate applies if the payer or the payee of the interest income is the government, a political and administrative division, a local government body or the central bank. Otherwise, the 5% rate applies.

(qq) The 0% rate applies to interest paid to the government, the central bank or institutions whose capital belongs fully to the state or local government bodies. Otherwise, the 10% rate applies.

(rr)    The 0% rate applies if any of the following circumstances exists:

  • The payer or the payee of the interest income is the government, a po­litical and administrative division, a local government body or the central bank.
  • The loan is approved by the government.
  • The loan is granted and guaranteed by the state financial body to promote exports and the lending is provided or guaranteed on preferential terms.
  • The loan is granted by a bank to promote exports.
  • The interest is paid on a debt that arises with respect to the sale on

credit of industrial, business or scientific equipment.

The 5% rate applies if the recipient is the actual owner of the interest in‑

come. Otherwise, the 10% rate applies.

(ss) The 0% rate applies if either of the following circumstances exists:

  • The interest is paid to the state, a local government body, the central bank or a financial institution that fully belongs to the state.
  • The interest is paid on a loan that is guaranteed, insured or indirectly fi­nanced by the government, a local government body, the central bank or a financial institution that fully belongs to the state.

Otherwise, the 10% rate applies.

(tt)    The 10% rate applies if the recipient is the actual owner of the royalties. Otherwise, the 15% rate applies.

(uu) The 5% rate applies if the recipient is the actual owner of the royalties. Otherwise, the 15% rate applies.

(vv) The 0% rate applies if the recipient of the interest income is the government, a local government body, the central bank or other government company or financial institution. Otherwise, the higher rate applies.

(ww) The 10% rate applies if the recipient is the actual owner of dividends. Other­wise, the 12% rate applies.

(xx) The 5% rate applies if the recipient is the actual owner of the interest in­come. Otherwise, the 10% rate applies.

(yy) The 0% rate applies if any of the following circumstances exists:

  • The payer or the payee of the interest income is the government, a po­litical and administrative division, a local government body or the central bank.
  • A loan is approved by the government.
  • A loan is provided, guaranteed or insured by the government, the central bank or other body under state control.
  • A loan is provided or guaranteed by a financial institution to promote development.
  • The interest is paid on a loan or lending with respect to the acquisition of industrial, business, commercial, medical or scientific equipment. (zz) The 6% rate applies if the recipient is the actual owner of the royalties. Otherwise, the 15% rate applies.

(aaa) The 5% rate applies if the actual owner of the dividends is a company that directly owns at least 20% of the capital of the company paying the divi­dends. The 10% rate applies if the recipient is the actual owner of divi­dends. Otherwise, the 12% rate applies.

(bbb) The 0% rate applies if the actual owner of interest income is one of the following:

  • The government of Belarus
  • National Bank of Belarus
  • A Belarusian local government body
  • The government of Laos
  • Bank of Laos
  • A Laotian local government body

The 8% rate applies if the recipient is the actual owner of the interest income. Otherwise, the 10% rate applies.

(ccc) The 0% rate applies to dividends received by the following:

  • The government of Belarus.
  • National Bank of Belarus.
  • A legal body in Belarus.
  • An institution wholly or predominantly owned by the government of Belarus. A list of such institutions may be approved from time to time by the government of Belarus or bodies authorized thereby and by a compe­tent Singaporean body.
  • The government of Singapore.
  • Monetary Authority of Singapore (central bank).
  • Government of Singapore Investment Corporation.
  • A legal body in Singapore.
  • An institution wholly or predominantly owned by the government of Singapore. A list of such institutions may be approved from time to time by a competent Singaporean body, the government of Belarus or bodies authorized by the government of Belarus.

The 5% rate applies to dividends received by the actual owner of the divi­dends. Otherwise, the 12% rate applies.

(ddd) The 0% rate applies to dividends received by the following:

  • The government of Belarus.
  • National Bank of Belarus.
  • A legal body in Belarus.
  • A bank in Belarus.
  • An institution wholly or predominantly owned by the government of Belarus. A list of such institutions may be approved from time to time by the government of Belarus or bodies authorized thereby and by a compe­tent Singaporean body.
  • The government of Singapore.
  • Monetary Authority of Singapore (central bank).
  • Government of Singapore Investment Corporation.
  • A legal body in Singapore.
  • A bank in Singapore.
  • An institution wholly or predominantly owned by the government of Singapore. A list of such institutions may be approved from time to time by a competent Singaporean body and the government of Belarus or bod­ies authorized thereby.

The 5% rate applies to interest received by the actual owner of the interest income. Otherwise, the 10% rate applies.

(eee) The 7.5% rate applies if the actual owner of the dividends is a company that directly owns at least 25% of the capital of the company paying the divi­dends. The 10% rate applies if the recipient is the actual owner of divi­dends. Otherwise, the 12% rate applies.

(fff) The 0% rate applies if the actual owner of the interest income is one of the following:

 

BELARUS 147

  • The government or a local government body.
  • The national (central) bank.
  • Financial organizations (institutions) that are wholly owned by the gov­ernment. A list of such organizations (institutions) may be approved from time to time by the governments of the treaty states or bodies authorized thereby.

Otherwise, the 10% rate applies.

(ggg) The 10% rate applies if the recipient is the actual owner of the dividends and owns at least 10% of the capital of the company paying the dividends. Otherwise, the 12% rate applies.

(hhh) The 0% rate applies to interest received by the government or a local gov­ernment body, the national bank or an organization or institution wholly or predominantly owned by the government. The 5% rate applies to interest received by the actual owner of the interest income. Otherwise, the 10% rate applies.