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21 March 2024, 10:53

Belarus suspends some double taxation avoidance treaties

MINSK, 21 March (BelTA) - Belarus will suspend the implementation of a number of international treaties on double taxation avoidance from 1 June 2024 to 31 December 2026 in terms of articles that regulate the taxation of dividends, interest and income from the alienation of property. The decision is stipulated by Council of Ministers’ Resolution No. 164 of 7 March 2024, BelTA learned from the Belarusian Taxes and Duties Ministry.

The list of states with which the execution of certain provisions of international treaties is suspended includes the United States, France, Denmark, Poland, Sweden, Belgium, Lithuania, Latvia, the Netherlands, the Czech Republic, Germany, the United Kingdom and others. In total, there are 27 countries on the list.

The decision was taken in response to Western sanctions. The period of applying the retaliatory measure may be shortened in case of elimination of the circumstances that served as a basis for its application, or at the suggestion of the Taxes and Duties Ministry.

When completing the tax return (calculation) on income tax for the second quarter of 2024, the tax agent is obliged to differentiate the application of tax rates under national legislation or agreement depending on the day of accrual of income (payment) - April-May 2024 and June 2024 - and indicate the relevant information in separate lines.

The ministry also clarified the information on individuals. Thus, income received in accordance with paragraph 1 of Article 213 of the Tax Code from 1 June 2024 from sources in Belarus by an individual – a tax resident of a foreign state - in the form of dividends, from debt obligations, from the alienation of property, including from the alienation of shares (interests), regulated by the articles of the agreements, the execution of which has been suspended, are subject to taxation in Belarus at the rates established by Article 214 of the Code.

Given that a number of provisions of the agreements have not been suspended, Belarus will continue to provide credit or exemption in respect of taxes paid (withheld) abroad in accordance with them.

Income received by tax residents of Belarus from sources in a foreign country, in respect of which the implementation of the provisions of the agreements is suspended, is subject to taxation at the rates and in accordance with the procedure provided for by the legislation of such country. At the same time, with respect to such income, the amounts of tax actually paid (withheld) in accordance with the legislation of the foreign state are subject to credit in Belarus: for legal entities - when paying income tax - in accordance with the procedure and taking into account the peculiarities provided by the relevant agreement and Article 187 of the Tax Code; for individuals - when paying income tax - in accordance with the procedure and taking into account the peculiarities provided by the relevant agreement and Article 224 of the Tax Code.
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