Belarus Personal Income Tax

Individuals who are tax residents of Belarus are subject to personal income tax on their worldwide income. Non­residents of Belarus are taxed on their Belarusian-source income.

Belarusian-source income includes, but is not limited to, the following:

  • Employment income
  • Payments under insurance contracts
  • Income derived from copyrights exercised in Belarus
  • Income derived from work and services performed in Belarus
  • Capital gains derived from disposals of property located in Belarus
  • Income derived from disposals of shares or other securities
  • Rental income from property located in Belarus
  • Dividends derived from Belarusian legal entities or foreign legal entities with regard to their permanent establishments in Belarus
  • Pensions or similar payments

Non-Belarusian-source income includes, but is not limited to, the following:

  • Employment income
  • Payments received from foreign insurance companies under insurance contracts
  • Income from copyrights exercised abroad
  • Income from disposals of shares or other securities abroad
  • Income paid by foreign companies or entrepreneurs for works or services performed abroad
  • Capital gains from disposals of property located abroad
  • Rental income from property located abroad
  • Dividends received from foreign companies

Definition of Belarusian tax resident. For personal income tax purposes, an individual is treated as a tax resident if he or she stays in Belarus for more than 183 days in a calendar year. An individual staying in Belarus for 183 or less days in a calendar year is treated as a nonresident of Belarus for tax purposes. Time spent by an individual abroad because of medical treatment, rec­reation and business trips is included in this period, while time spent by an individual in Belarus exclusively for the purpose of medical treatment and recreation is not included in this period.

Income subject to tax

The taxation of various types of income is described below.

Employment income. Employment income includes, but is not limited to, salary and compensation, and bonuses received in cash or in kind. For personal income tax purposes, Belarusian-source employment income is income received by individuals from Belarusian companies, and non-Belarusian-source employment income is income received from foreign companies, regardless of the place where the employment duties are actually performed. Employment income received from foreign companies operating in Belarus though a permanent establishment is considered Belarusian-source income.

Belarusian tax residents may claim several deductions in deter­mining their taxable income (see Deductions).

Investment income. Income is treated as dividend income if originating from stocks or shares. A flat personal income tax rate of 13% applies to Belarusian- and foreign-source dividends.

Dividends received by nonresidents from local sources are sub­ject to 13% personal income tax withheld at source.

Interest income from bank deposits in Belarus is not subject to personal income tax if the money is placed in Belarusian ruble (BYR) deposit accounts for over one year or in foreign currency deposit accounts for over two years.

Self-employment and business income. The income of self-employed individuals is generally subject to personal income tax at a flat rate of 16%. Certain types of income are taxed at a spe­cific flat rate of 9% (see Rates). Tax is levied on the individual’s annual self-employment income, which consists of gross income, less documented expenses associated with that income.

A self-employed person whose activity is treated as business is required to register as an individual entrepreneur with the appro­priate registration authority. Individual entrepreneurs are gener­ally required to pay personal income tax on their quarterly income.

Specific tax regimes (simplified taxation and single tax) may be used by individual entrepreneurs under certain circumstances.

The single tax is paid with respect to limited activities determined by the tax law. Payers of the single tax include the following:

  • Individual entrepreneurs selling services to individuals for their own personal needs or who sell certain types of goods at certain places of sales (for example, small shops)
  • Individuals not engaged in entrepreneurial activities that involve the sale of certain types of goods in marketplaces of goods (for example, vegetables and fruits grown by individuals)

The single tax is applied at fixed rates, depending on the type of goods or services sold or provided by the entrepreneur. The basic monthly rates of single tax vary from BYR15,000 to BYR12,600,000. The amount of the tax depends on the type of entrepreneurial activity and the location at which this activity is conducted. In general, the single tax is payable in advance on a monthly basis.

The law prohibits the realization of goods without supporting documents that confirm the acquisition of the goods. Entrepreneurs engaged in sales to legal entities and other indi­vidual entrepreneurs do not qualify as payers of single tax.

Individual entrepreneurs (other than those qualifying as single taxpayers) may use the simplified taxation regime rather than the general tax system if the revenue generated by them does not exceed the statutory thresholds.

Newly registered entrepreneurs may use simplified taxation im­mediately after state registration by applying to the tax authori­ties. The tax is paid quarterly at a rate of 5% of the total revenue generated in the reporting period. The rate is reduced to 3% if an entrepreneur applies the simplified taxation regime and also pays value-added tax (VAT). Quarterly or monthly reporting applies, depending on frequency of VAT reporting.

Other income. Any other income that is not listed above is gener­ally included in regular income and taxed at the general tax rate of 13%. Specific tax rates of 4%, 9%, 10% and 16% and fixed rates apply to certain types of income.

Capital gains. Capital gains are included in the total income of an individual taxpayer. A tax on capital gains is not paid separately. For additional information, see Property tax deductions.

Deductions. Belarusian tax law divides tax deductions into the following four categories:

  • Standard tax deductions
  • Social tax deductions
  • Property tax deductions
  • Professional tax deductions

Taxpayers may claim all of the above deductions in computing their personal income tax liability.

Standard tax deductions. In computing tax, each taxpayer may claim the following standard tax deductions:

  • Individual deduction equaling BYR830,000 per month. This deduction is not available to individuals who earn more than BYR5,010,000 per month.
  • A deduction equaling BYR240,000 per month per each child under 18 or dependent.
  • Compensation-related deduction equaling BYR1,170,000 per month. The compensation-related deduction is provided to dis­abled individuals, war veterans and victims of natural disasters.

To claim the second and third standard deductions listed above, appropriate documents must substantiate the deductions.

Standard deductions are provided for each month of a calendar year at the place of primary employment or by the tax authorities on the basis of the annual tax return (declaration) submitted to the tax authorities.

Social tax deductions. Taxpayers may claim social tax deductions for the total of the following amounts:

  • Actually incurred education expenses for the taxpayer, and his or her close relatives (children, spouse, parents, brothers, sis­ters, grandparents and grandchildren). This deduction is allowed if the expenses are incurred by the taxpayer for a first education (higher or specialized secondary education).
  • Actually incurred repayments of loans (including interest due on loans) obtained from banks, local companies or entrepre­neurs by a taxpayer to pay for education.
  • Up to BYR18,130,000 that is actually spent during the year on insurance under voluntary pension, life or medical insurance agreements. Pension or life insurance agreements must be entered into for a period not less than three years.

Any amounts incurred that are claimed as social tax deductions must be supported by relevant documents.

Property tax deductions. Under the Belarusian tax law, individu­als may claim the following property tax deductions:

  • Deduction of expenses actually incurred by a taxpayer or any of his or her family members to construct or purchase an apart­ment or a house located in Belarus as well as for expenses incurred on repayments of loans provided by local and foreign companies or entrepreneurs or by Belarusian banks for this purpose. The deduction is provided only to a taxpayer whose living conditions require improvement. This fact must be con­firmed by a local authority based on appropriate documents.
  • Deduction of expenses actually incurred and documented for purchases and disposals of property. However, income derived by individuals from sales of property, excluding real estate, cars and securities, is exempt from personal income tax in Belarus. The disposal of real estate made not more than once within five years (one house, one apartment, one land plot, one garage or similar item) and the sale of one car within a year are not tax­able for tax residents.

The first type of property tax deduction mentioned above is pro­vided to an employed taxpayer based on appropriate documents held by his or her employer at his or her primary work place dur­ing the current tax year or on the annual tax return (declaration) submitted to the tax authorities.

The second type of property tax deduction mentioned above is provided to the taxpayer based on the annual tax return submitted to the tax authorities.

Income derived from sales of securities is subject to personal income tax in accordance with special rules established by the Belarusian tax law. In particular, the taxable gain on disposals of stocks equals the difference between the sales proceeds and the documented expenses associated with the purchase, possession, and sale of the stocks.

Gains derived from sales of any properties to close relatives are exempt from tax.

Business and professional tax deductions. Individual entrepre­neurs and other individuals performing work or services on a contractual basis may deduct associated business expenses in accordance with the Belarusian tax law.

All business-related expenses must be supported by the relevant documents made in the established format. Explicit regulations contain descriptions of deductible and nondeductible expenses. If an individual cannot support business-related expenses with documents, the individual may claim deductible expenses equal to 10% of revenue.

Instead of claiming professional tax deductions based on docu­mented expenses, certain individuals involved in creating intel­lectual property may claim tax deductions equal to 20%, 30% or 40% (depending on the type of activity) of the income derived.

Entrepreneurs may deduct business expenses in computing the tax for the period in which the expenses are incurred. Professional tax deductions are allowed to other taxpayers by the tax authori­ties when the tax return is submitted at the end of the tax year.

Rates. Individual income derived from sources in Belarus or abroad is generally subject to personal income tax at a flat rate of 13%. In addition, specific tax rates of 4%, 9%, 10% and 16% and fixed tax rates apply to certain types of income.

A specific tax rate of 4% applies to income from winnings (unplayed and returned bets and payouts received from success­ful bets) received from Belarusian gambling companies.

A specific tax rate of 9% applies to employment income received by individuals who work under employment agreements with residents of the High Technology Park. The business income of an entrepreneur registered with the High Technology Park is also taxed at a rate of 9%.

A specific tax rate of 10% applies to employment income received by individuals who work under employment agreements with manufacturing companies registered from 1 July 2015 to 31 December 2020 in the southeastern areas of the Mogilev region.

A specific tax rate of 16% applies to business income earned by individual entrepreneurs under the general tax system (that is, not applying the single tax and simplified taxation). A specific tax rate of 16% also applies to income calculated by the tax authori­ties based on the excess of total expenses over total income of individuals in some cases (for example, on the purchase of an apartment).

Fixed tax rates apply to income received by individuals under rent contracts. Monthly fixed rates of personal income tax vary from BYR15,000 to BYR1,081,000, depending on the type and location of the rented property.

Relief for losses. Business losses of a self-employed person incurred during a year cannot be carried forward.

Other taxes:

Estate and gift taxes. Belarus does not impose estate and gift taxes.

Net worth tax. Belarus does not impose net worth tax.

Immovable property tax and land tax. Immovable property tax and land tax are payable by individuals for capital structures (houses, apartments, garages, parking spaces and certain other structures) and land plots possessed by them.

The annual immovable property tax rate payable by an individual is 0.2% if an individual owns two or more houses and/or apart­ments. In other cases, a 0.1% rate applies. The tax is paid annu­ally on the value of the taxable item at the beginning of the rele­vant year.

The annual land tax is set as a percentage of the cadastral value or at a fixed rate per each 10,000 square meters of a land plot, depending on the size, location, designated purpose and cadastral value of a land plot.

Social security:

Contributions and coverage. All payments to employees are gen­erally subject to social security contributions at a rate of 35%. These contributions include payments to social security and pen­sion security.

Social security contributions are paid by employers and must be remitted to the Fund of Social Protection of People under the Belarusian Ministry of Labor and Social Protection not later than the date established for salary payments by the employer. If the day for paying salaries for a month is later than the 20th day of the following month, the contributions must be paid by the 20th day of the following month. The employers’ contribution rates are 28% for pension insurance and 6% for social insurance.

Employees also pay pension insurance contributions at a rate of 1% on their gross compensation. This tax is withheld and paid to the Fund of Social Protection of People directly by the employers together with their own social security contributions.

Both employer and employee contributions are payable on the gross compensation (salary) of employees. However, the monthly tax base for social security charges is limited (capped) to five average salaries in Belarus, currently equal to BYR35,429,950. Accordingly, the effective social security contribution rate for employees earning more than five average monthly salaries is actually lower. In addition, the tax law contains a list of payments to employees that are exempt from social security contributions.

Self-employed individuals and individual entrepreneurs must make contributions for pension insurance at a rate of 29% and for social insurance at a rate of 6%. They generally pay contributions by 1 March of the year following the reporting year. Under some circumstances, the base for social security contributions may not be less than the minimum monthly salary stipulated by national legislation.

In addition to social security contributions, employers must make mandatory payments for insurance against accidents at work and professional diseases to the state insurance company, “Belgosstrakh.” A rate of 0.6% generally applies to all payments to employees.

Social security and mandatory insurance contributions are pay­able for resident and nonresident individuals employed in Belarus.

Totalization agreements. Belarus has entered into agreements regarding pension coverage with the following countries.

Armenia                   Latvia                                   Tajikistan

Azerbaijan               Lithuania                             Turkmenistan

Kazakhstan             Moldova                              Ukraine

Kyrgyzstan              Russian Federation            Uzbekistan

The agreements with Azerbaijan, Latvia, Lithuania and the Russian Federation also regulate issues regarding social security contributions.

Broadly, the agreements listed above provide that the obligations of foreign individuals with respect to social security contributions are generally governed by the legislation of the country where they are working on the basis of employment contracts.

Personal income tax return filing and payment procedures:

The tax year in Belarus is the calendar year.

Employers are required to withhold, calculate, and pay to the state the relevant tax on compensation paid to employees. The tax is transferred to the budget on the date on which the salary is paid.

Any non-employment income received in a tax year by a tax-resident individual must be declared in the individual’s annual tax return.

The annual tax return must be submitted to the tax office by 1 March of the year following the tax year. The taxpayer must pay personal income tax due on income derived in the tax year by 15 May of the year following the tax year.

Attorneys, notaries and individual entrepreneurs using the gen­eral taxation regime compute tax quarterly on a cumulative basis and file tax returns by the 20th day of the month following the reporting quarter.

The tax for the reporting quarter must be paid by the 22nd day of the month following the end of the reporting quarter.

Entrepreneurs who use the simplified taxation regime and who pay VAT on a quarterly basis or do not pay VAT must file tax returns quarterly by the 20th day of the month following the end of the reporting quarter. Entrepreneurs who pay VAT on a month­ly basis must file tax returns monthly by the 20th day of the month following the reporting month. Tax must be paid by the 22nd day of the month following the end of the reporting month.

Entrepreneurs whose business activities are subject to the single tax must pay the tax in advance and file a tax return on a month­ly basis by the first day of the month in which the activity is conducted. In certain cases, taxpayers may choose a tax-reporting period between a calendar month and a calendar quarter.

Double tax relief and tax treaties:

Taxes actually paid abroad on foreign-source income are credited against taxpayers’ tax obligations to the Belarusian government. A foreign tax credit may not exceed the personal income tax pay­able in Belarus on the same income.

To obtain an exemption, a taxpayer must present a certificate of residency from a country with which Belarus has entered into a double tax treaty and a document that is certified by the tax authorities of the foreign country and proves that the income was received and the prescribed amount of foreign tax was paid.

Belarus has entered into double tax treaties with the following countries.

Armenia                       Italy                                 Saudi Arabia

Austria                         Kazakhstan                      Serbia

Azerbaijan                    Korea (North)                  Singapore

Bahrain                        Korea (South)                  Slovak Republic

Bangladesh                  Kuwait                             Slovenia

Belgium                       Kyrgyzstan                      South Africa

Bulgaria                       Laos                                Sri Lanka

China                           Latvia                              Sweden

Croatia                         Lebanon                          Switzerland

Cyprus                         Lithuania                         Syria

Czech Republic            Macedonia                       Tajikistan

Egypt                           Moldova                          Thailand

Estonia                         Mongolia                         Turkey

Finland                         Netherlands                     Turkmenistan

Georgia                        Oman                              Ukraine

Germany                      Pakistan                           United Arab

Hungary                       Poland                             Emirates

India                             Qatar                               Uzbekistan

Iran                              Romania                          Venezuela

Ireland                          Russian Federation          Vietnam

Israel

In addition, Belarus currently applies the double tax treaties entered into by the former USSR with Denmark, France, Japan, Malaysia, Spain, the United Kingdom and the United States.

Belarus has signed double tax treaties with Indonesia and Libya, but these treaties are not yet in force.

Visas

Belarusian visas are divided into entry, exit and exit-entry visas.

Entry visas may be obtained from embassies and consulates abroad. A foreigner traveling by plane also may obtain an entry visa from the Belarusian consular division at the republican uni­tary enterprise, National Airport Minsk.

Exit visas and exit-entry visas may be obtained from Citizenship and Migration Departments at the place of temporary stay (resi­dence) of foreigners in Belarus.

Entry into Belarus is possible under certain circumstances, including among others, on the basis of one of the following types of visas:

  • Visa obtained for a business trip (without the right to work by hire) on the basis of an application of a Belarusian legal entity
  • Visa obtained for a private trip (without the right to work by hire) on the basis of an invitation issued by the Citizenship and Migration Department of the Ministry of Internal Affairs of the Republic of Belarus
  • Visa with the right to work by hire, on the basis of a notarized copy of a special permit for foreigners to work by hire in Belarus, which is issued by the regional Citizenship and Migration Department of the Ministry of Internal Affairs of the Republic of Belarus

Entry visas can be single, double or multiple entry. Exit-entry visas can be single and multiple entry.

Entry business visas are issued to individuals who are on busi­ness trips to Belarus. A business visa limits a foreign citizen to 90 days per calendar year in Belarus from the date of the first entrance.

Entry work visas are issued to individuals who want to work in Belarus. An entry work visa allows a foreigner to stay in Belarus for up to 90 days per calendar year from the date of the first entrance.

Embassies and diplomatic consular posts issue entry visas to foreigners abroad. To apply for an entry visa, a foreigner should submit to the issuing authority certain documents, including but not limited to the following:

  • Visa application in the established form.
  • Document for traveling abroad (passport). In general, this document should contain a photo of its holder, not less than two blank pages for visas and should not expire earlier than 90 days after the date of expiration of the visa.
  • The photo must be 35 mm x 45 mm, comply with interna­tional standard requirements for face image, and should have been taken not earlier than six months before the application.
  • Visa supporting documents confirming the purpose and condi­tions of the visit (invitation of a Belarusian legal entity or indi­vidual, special permit for foreigners to work by hire in Belarus and other related documents at the request of the issuing authorities).
  • Insurance policy valid in Belarus or contract for medical insur­ance concluded with foreign insurance company, which is valid for the whole period of temporary residence of a foreigner in Belarus, with insurance coverage of not less than EUR10,000 and covering the territory of Belarus.
  • Document confirming the payment of a consular duty.

Foreigners from most of the Commonwealth of Independent States (CIS) countries do not need to obtain entry visas. Foreigners who have a valid permanent residence permit also do not need to obtain entry visas. The foreigners mentioned above should present a passport or other document for traveling abroad on entry into and departure from Belarus.

A foreigner who has a valid temporary residence permit can periodically leave Belarus and re-enter it if he or she has a valid short-term or long-term entry visa (in this case, the obtaining of an exit-entry visa is not required). If an entry visa has expired, a foreigner can receive an exit or exit-entry visa, which is issued by the Citizenship and Migration Department of the Ministry of Internal Affairs at the place of the foreigner’s temporary resi­dence. In general, a multiple exit-entry visa is issued to foreign nationals who have received a temporary residence permit for one year but not longer than the validity period of the temporary residency permit.

Work permits:

In general, foreign citizens who intend to work in Belarus should obtain a special work permit issued by regional Citizenship and Migration Departments of the Ministry of Internal Affairs.

The validity period of a special work permit is one year, except for highly skilled professionals for whom a special work permit is issued for two years. A foreign highly skilled professional is a foreigner with high level of professional knowledge, skills and expertise confirmed by education certificate, and with work experience not less than five years and a contractual monthly salary that is more than the equivalent of USD1,745 or EUR1,570. CIS nationals, with the exception of Armenian, Kazakh, Kyrgyzstan and Russian citizens employed by Belarusian legal entities, should also obtain a special work permit.

A special work permit is not required for, among others, the fol­lowing foreigners who want to work in Belarus:

  • Individuals who have permanent residence permits
  • Individuals employed by diplomatic missions and consulates of foreign countries, representative offices and/or bodies of inter­national or interstate organizations accredited in the Republic of Belarus
  • Journalists from international media organizations accredited with the appropriate Belarusian authorities
  • Certain other types of foreigners (for example, clergy invited for religious activities by religious associations that are statutorily registered in Belarus)

To obtain a special work permit for a foreigner, the following documents should be presented by the Belarusian employer of such foreigner to the appropriate regional Citizenship and Migration Department of the Ministry of Internal Affairs:

  • Application in the established form
  • Copy of the foreigner’s passport or other equivalent document
  • Receipt for registration fee

The procedure for obtaining a special work permit takes 15 calen­dar days.

Residence permits:

Foreign citizens may stay in Belarus if they have any of the fol­lowing three statuses:

  • Foreigners who are temporarily staying in Belarus
  • Temporary residents (individuals who hold temporary residence permits)
  • Permanent residents (individuals who hold permanent residence permits)

A foreigner’s temporary stay in Belarus should not exceed 90 days per calendar year from the date of the first entrance.

Temporary resident status is the most common status for expatri­ates working in Belarus. A temporary residence permit is a docu­ment that allows a foreign national to reside in Belarus during its validity.

A temporary residence permit is given for the period of up to one year. Its validity may be extended if a foreigner has a document confirming the legality of his or her staying in Belarus.

To obtain a temporary residence permit, an applicant planning to work by hire in Belarus should submit the following main docu­ments:

  • Application in the established form
  • Passport or other equivalent document
  • Document confirming the legality of his or her staying in Belarus
  • Special permit to work by hire in Belarus or labor agreement (contract) with a Belarusian employer (if a special permit to work by hire is not required)
  • Insurance policy or contract for medical insurance concluded with foreign insurance company
  • Document confirming the possibility of staying at the place of temporary residence (usually a long-term rent contract)
  • Document confirming the payment of state duty

A permanent residence permit may be issued to the following for­eigners:

  • Close relatives of Belarusian citizens permanently residing in Belarus
  • Persons who are granted refugee status or asylum in Belarus
  • Foreigners who have the right to family reunification
  • Foreigners who have lived legally in Belarus for a continuous period of seven years after obtaining the temporary residence permit
  • Foreigners who may become Belarusian citizens through the mechanism of registration
  • Foreigners who were previously nationals of Belarus
  • Workers and professionals who are needed by Belarusian orga­nizations
  • Foreigners who have extraordinary capabilities and talent, have outstanding merits for Belarus or have high achievements in science, technology, culture or sports
  • Foreign investors who have made investments in the amount not less than EUR150,000 in investment activities in Belarus
  • Ethnic Belarusians or their blood relatives in the direct line of descent, including children, grandchildren and great-grandchildren who were born outside the current territory of Belarus

The Belarusian government may provide other grounds for the obtaining of a permanent residence permit under an agreement with the President of the Republic of Belarus.

The issuance of a permanent residence permit is a subject to an immigration quota that may be established by the Belarusian government with respect to each foreign country.

Family and personal considerations:

Family members. Non-working family members of expatriates may receive accompanying family member visas, but applications for visas should be filed and presented separately.

If family members plan to work in Belarus, they should also obtain separate special work permits in accordance with the established rules.

Driver’s permits. In general, foreign nationals may drive legally in Belarus on the basis of their valid home-country driver’s licenses or international driver’s licenses, which should be accompanied by a notarized translation into Russian or Belarusian. Belarus does not have driver’s license reciprocity with any foreign country.

On expiration of the 90-day period after receipt of a Belarusian permanent residence permit or a Belarusian passport, an individ­ual should obtain a local driver’s license.

To obtain a local driver’s license, an applicant should have a medical report on his or her capability to drive, and pass a theo­retical examination and a practical driving test.