background image
12.5. Other Anti-Avoidance Rules

Tax Information Exchange Agreements (TIEAs)

Tax Information Exchange Agreements (TIEAs) provide for the exchange of information on tax matters and Belarus has concluded TIEAs with Georgia and Sudan.

Financial Account Information Reporting and Exchange

Belarus concluded an Intergovernmental Agreement (IGA) with the United States on 29 July 2015 to improve international tax compliance and implement the U.S. Foreign Account Tax Compliance Act (FATCA).

Beneficial Ownership for Treaty Entitlement

The domestic laws of Belarus include the concept of "beneficial owner" with regard to specified payments to non-residents. Unless a non-resident recipient of income (particularly, interest, dividends, and royalties) qualifies as the beneficial owner thereof, any reduced withholding tax rate envisaged by the relevant double tax treaty will be denied. On 25 April 2022, the Belarus Ministry of Taxes and Duties issued a guidance which provides the following clarifications:

  • A beneficial owner is a natural person who ultimately owns or controls, directly or indirectly, a company or other legal entity, or by other factors has the actual right to receive or dispose of the relevant income;
  • For the application of reduced tax rates or exemption on the income of non-resident companies that do not operate through a permanent establishment in Belarus, the non-resident company is considered as a beneficial owner if, in the tax period in which the payment arises, the non-resident company:
    • carries out a business activity in the country of registration;
    • is the direct beneficiary of the income;
    • can independently use or dispose of that income at its discretion; and
    • is not mainly engaged in financial or investment activities carried out directly by a member of its management body without the involvement of other employees or other individuals possessing the necessary qualifications;
  • However, a non-resident company receiving income is not considered as a beneficial owner if:
    • the non-resident company acts in the capacity of an intermediary, an agent, or nominee (nominee owner) and does not assume any risks or does not have any economic connection with the income; or
    • the recipient does not have the authority to use and dispose of such income and at least 60% of the income received is required to be transferred within 12 months of its receipt to a non-resident company that would not have been entitled to the treaty benefit if it would have otherwise received the income directly.

The treaty benefit claimed is subject to audit by the Belarus tax authority and the claim may be denied if it is evident that the person claiming the benefit is not the beneficial owner.