The Belarus Ministry of Taxes and Duties has published Letter No. 4-2-15/00340 of 25 April 2022, which provides guidance to clarify the concept of beneficial ownership for the purpose of claiming treaty benefits (reduced withholding tax or exemption) on dividend, interest, and royalty income. The letter first explains the concept of an actual beneficial owner according to generally accepted international practices, including that a beneficial owner is the person that has direct or indirect participation in or control over a legal entity, or by other circumstances has the actual right to receive and dispose of the relevant income at its discretion. The letter then explains the concept of the actual beneficial owner as defined under Article 194 of the Tax Code for the application of reduced tax rates or exemption on the income of foreign organizations not derived through a permanent establishment in Belarus. This includes that a foreign entity is recognized as the actual beneficial owner if, in the tax period the payment obligation arises, the entity:

• carries out business activity in the country (state) of registration;
• is the direct beneficiary of such income;
• is entitled to independently use and/or dispose of the income at its discretion; and
• is not an organization that mainly engages in financial and/or investment activities carried out directly by a member (or members) of its management body (or bodies) without involving other employees or other individuals possessing the necessary qualifications.

For each of the above conditions, the letter provides further specific guidance. The letter also provides guidance on the non-recognition of a foreign organization as the actual beneficial owner of income. This includes cases where an organization caries out intermediary functions on behalf of another, including agents, custodians, and others obligated to pass on the income in whole or in part to a resident of another country (state) that would not have had rights to treaty benefits if the income were received directly or would have been entitled to less favorable benefits. Lastly, it is provided that the tax authority may audit the person claiming the status of the actual beneficial owner and if it is established that the person claiming beneficial ownership is not the beneficial owner, the tax authority may deny the treaty benefits without having to identify the actual beneficial owner.