BelarusTax Obligations Detailed

In Belarus, employers face various tax obligations related to payroll, social security, and other contributions.

Employer Taxes

• Social Security Contributions (SSC): Employers contribute 34% of the employee's gross salary to the Social Security Fund. This covers areas such as pensions, healthcare, and social welfare programs.
• Work-Related Injury and Occupational Illness Insurance: An additional contribution ranging from 0.10% to 1.00% of the employee's gross salary is required for this obligatory insurance, depending on the risk level associated with the employee's job.
• Corporate Income Tax (CIT): While not directly tied to employee compensation, employers are also subject to CIT. The general rate is 18% of profits. However, specific rates apply to certain income types or industries, for example, 12% on dividends and 9% on income from share sales in Belarusian companies. Reduced rates are available for particular sectors such as high-tech goods production (10%) and specific activities in designated regions.

Employee Taxes and Deductions

• Personal Income Tax (PIT): Employees are subject to a flat PIT rate of 13% of their gross income. Some exceptions exist, such as a reduced rate of 9% for employees of High Technology Park residents.
• Social Security Contributions: Employees also contribute 1% of their gross salary towards social security.
• Tax Deductions and Credits: Employees can claim deductions for certain expenses, including education, insurance premiums (up to a limit), and property-related costs. Monthly tax-exempt amounts are also available depending on income level, number of dependents, and social vulnerability status.

Payroll Procedures

• Payroll Frequency: Payroll is typically processed monthly.
• Fiscal Year: The fiscal year aligns with the calendar year, running from January 1st to December 31st.
• Minimum Wage: As of today, the minimum wage is 3.91 BYN per hour, which translates to approximately 626 BYN per month for a standard 40-hour workweek.
• Bonus Payments: While common, bonuses and 13th-month salary payments are not legally mandated.
• Deadlines: Employers are required to submit quarterly PIT reports by the 20th day of the month following the reporting quarter. Annual PIT returns are due by March 1st of the following year, with tax payments due by May 15th.

Non-Resident Taxation

Non-resident employees (those present in Belarus for less than 183 days in a calendar year) are also subject to a 13% PIT, or 9% if employed by High Technology Park residents, but only on income sourced within Belarus. They are exempt from mandatory social security contributions.

Key Considerations for Employers

• Accurate Record-Keeping: Thorough documentation is crucial for accurate wage calculations, tax reporting, and compliance with Belarusian regulations.
• Tax Residency: Understanding tax residency rules for both employers and employees is essential, particularly for international companies operating in Belarus.
• Currency: All tax payments must be made in Belarusian Rubles (BYN).

It's important to note that this information is current as of February 5, 2025, and might be subject to change due to legislative updates or regulatory revisions. Consulting with a local tax professional is recommended for the most up-to-date and tailored advice.

In Belarus, employee tax deductions primarily involve income tax and social security contributions.

Income Tax

• General Rate: The standard income tax rate is 13%.
• Reduced Rates: A 9% rate applies to employees of High Technologies Park resident companies (though it was temporarily 13% for 2021-2022). A 10% rate applies to individuals working in the South-East regions of the Mogilev region until December 31, 2025.
• Standard Deductions: Tax residents can claim standard deductions to reduce their taxable income. These include BYN 93 (approximately USD 47 as of February 5, 2025) per month for income up to BYN 563 (approximately USD 287) monthly and BYN 27 (approximately USD 14) monthly per child under 18 or dependent. These deductions usually apply only to income from the primary place of work. Additional social, property, and professional deductions may be available. These require submitting a tax return at the end of the tax period to the tax authorities.

Social Security Contributions

• Employee Contributions: Employees typically contribute 1% of their salary.
• Employer Contributions: Employers generally contribute 34% of the employee's gross salary, plus an additional 0.10% to 1.00% for work-related injury and occupational illness insurance. This comprises 28% for pension insurance and 6% for social insurance. The workplace accident insurance is 0.6% of the salary, with multipliers up to 1.5 for specific professions.
• Foreign Nationals: Social security contributions are not mandatory for foreign employees. They can choose to participate by submitting an application to their employer.

Other Taxes and Deductions

• Real Property Tax: Annual tax rates range from 0.1% to 0.2% of the property value.
• Tax Loss Carry Forward Companies can carry tax losses forward in full for up to 10 years. But, they cannot carry back losses, and losses incurred from activities outside Belarus or while under a tax exemption are not deductible.

Additional Information

• Tax Year: The fiscal year in Belarus is from January 1 to December 31.
• Payroll Frequency: Salaries are typically paid monthly.

It's important to consult official sources or a tax professional for the most up-to-date and personalized information. The information provided here is current as of February 5, 2025, and is subject to change.

In Belarus, the Value Added Tax (VAT) is the primary indirect tax levied on consumer spending, business transactions, and imports.

VAT Rates

• Standard Rate: 20% applies to most goods and services.
• Reduced Rate: 10% applies to specific goods and services, including certain food products, children's products, and medical goods.
• Increased Rate: 26% applies to data transfer services. This increased rate has been in effect since May 2022.
• Zero Rate: Applies to exports of goods and certain services.
• Exemptions: Certain goods and services are exempt, including financial, educational, medical, cultural, and housing services. However, businesses providing exempt supplies may not be able to reclaim all input tax.

VAT Registration

• Threshold: No registration threshold exists for VAT in Belarus as of today's date. All businesses, even those making a single sale, must register. This applies to both resident and non-resident businesses.
• Non-resident E-commerce: Foreign e-commerce businesses selling to Belarusian customers are required to register for VAT, regardless of their sales volume. This requirement came into effect in July 2022.
• Registration Process: The registration process is electronic.

VAT Filing and Payment

• Returns: VAT returns are filed electronically via the Ministry of Taxation web portal.
• Frequency: Returns are filed monthly for importers and certain categories of businesses, such as those selling telecommunications services. Other businesses can choose to file monthly or quarterly.
• Deadline: Returns must be submitted within 20 days after the end of the reporting period.
• Payment: VAT payment is due within 22 days after the end of the reporting period. This deadline is adjusted if it falls on a weekend or holiday.
• Penalties: Late filing and payment penalties may be imposed.

Excise Duties

Belarus also levies excise duties on the manufacture, import, and sale of specific goods, including alcohol, tobacco, energy products, and certain fuels. These duties are usually fixed amounts per taxable item. Other taxes include gambling tax, a tax on income from lottery activities, and a tax on income from online games. Belarus also has corporate taxes with a standard rate of 20%. This information is current as of today, February 5, 2025, and might change in the future.

Belarus offers various tax incentives to stimulate economic growth and attract investment.

Corporate Tax Incentives

• Reduced Corporate Income Tax Rate: Companies operating within Free Economic Zones (FEZ) benefit from a reduced corporate income tax rate of 9%, compared to the standard rate of 18% (25% for banks and insurance companies). Six FEZs operate in Belarus, offering tax and non-tax incentives to resident entities.
• Tax Exemptions for Businesses Employing Disabled Individuals: Companies where disabled persons comprise over 50% of the total workforce are completely exempt from corporate income tax.
• Tax Deductions for Investments in Social and Sports Infrastructure: Taxable profits can be reduced by amounts invested in construction or reconstruction of sports facilities, or donated to state-registered entities engaged in public health, education, social services, culture, and sports, up to a maximum of 10% of taxable profits.
• Tax Incentives for Businesses in Rural Areas and Small Towns: Businesses in small towns (population under 50,000) are exempt from profit tax on income derived from selling self-produced goods, works, and services for seven years from the date of their incorporation. Until December 31, 2025, businesses producing goods or services in rural areas are exempt from profit tax.
• Incentives for Electric Vehicles: Incentives are available until December 31, 2025, for electric vehicles, although the specifics may vary.

Individual Tax Incentives

• Reduced Personal Income Tax Rate for High-Tech Park Employees: Employees of companies registered in the High Technologies Park (HTP) are subject to a reduced personal income tax rate of 9%.
• Reduced Personal Income Tax Rate for Mogilev Region: Individuals working in the South-East regions of the Mogilev region are taxed at a rate of 10% until December 31, 2025.
• Tax Deductions for Individuals: Various deductions are available for education expenses (self and relatives), insurance premiums (capped), and property-related expenses (construction, purchase, or disposal of property in Belarus).
• Monthly Tax-Exempt Amounts: Further tax relief comes in the form of monthly tax-exempt amounts: BYN 135 for individuals with monthly incomes below BYN 817, BYN 40 per child/dependent (BYN 65 for two or more), and BYN 190 for socially vulnerable taxpayers (disabled, veterans, disaster victims).
• Special Regime for Non-Residents: Non-residents spending less than 183 days annually in Belarus are taxed at standard rates but only on Belarusian-sourced income and are exempt from mandatory social security contributions.

Other Investment Incentives

• Free Economic Zones: FEZs offer numerous incentives, including simplified regulations, streamlined administrative procedures, and exemptions from certain state fees.
• High-Tech Park (HTP): Businesses within the HTP enjoy preferential tax treatment, legal and administrative benefits, and special provisions for cryptocurrencies and ICOs.
• Investment Agreements: Investors engaging in priority sectors like IT, logistics, and mechanical engineering through investment agreements with the government might benefit from land lease incentives and relaxed construction procedures.
• "Great Stone" China-Belarus Industrial Park: This park offers reduced electricity and natural gas prices, simplified construction procedures, and expedited administrative processes, particularly focusing on electronics, pharmaceuticals, biomedicine, chemicals, mechanical engineering, logistics, big data, and R&D.
• Bremino-Orsha Special Economic Zone: This SEZ, with a focus on manufacturing, e-commerce, logistics, and R&D, offers a range of incentives, including state financial support for medium-sized businesses, simplified regulations for construction, and exemptions from certain state fees.

It's important to remember that tax regulations are subject to change. This overview is current as of February 5, 2025, and consulting with a tax advisor is recommended for the most up-to-date and personalized guidance.