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8.1.1. Corporate Income Tax

The standard corporate tax rate for companies is 18%. Capital gains on the sale of shares also attract tax at the standard corporate tax rate of 18%. Effective 1 January 2022, the local tax authorities are authorised to increase the tax rate by up to 2% for specified taxpayers that pay 100% of the taxes to the local budget, for e.g., in Mogilev region the standard corporate tax rate is increased from 18% to 20%, effective 1 January 2022.

However, certain other rates apply as follows:

  • Tax rate of 25% applies to:
    • banks and insurance companies;
    • microfinance organizations (effective 1 January 2019); and
    • companies having profits from foreign exchange transactions (effective 1 January 2020).
  • Effective 1 January 2020, companies that transport oil and oil products through pipelines in Belarus are subject to corporate tax at the rate of 50%;
  • The corporate tax rate on income from high-tech products is 10%, which is reduced to 5% in case of self-produced goods included in the list of high-tech goods; and
  • Dividend income received by a resident company is subject to tax at the rate of 12%. A reduced rate of 6% applies in respect of Belarussian companies and Belarussian shareholders, where the distributing company has reinvested profits with no distributions for at least three years. An exemption applies if there are no distributions for at least five years. It is clarified that in the preceding three or five-year periods, the company must have had available profits to distribute, i.e., a credit balance of retained earnings and uncovered losses. Further, the reduced rates may apply for dividend distributions out of 2018 profits and profits of previous years that have been accumulated as a result of the non-distribution of dividends.

With effect from 6 March 2016, any income from transactions involving certain qualified corporate bonds issued by Belarus resident legal entities is exempt from corporate tax. The exemption that earlier applied to corporate bonds issued between 1 January 2016 and 31 December 2017, is extended indefinitely.

COVID-19 Emergency Measures

In response to the COVID-19 pandemic and to offset the additional costs incurred due to the pandemic, the corporate tax rate is set at 30% for tax year 2021-22 for the following taxpayers:

  • Operators of cellular mobile telecommunications;
  • An operator designated in accordance with the legislation for the mandatory provision of universal telecommunication services in the territory of Belarus; and
  • Profits of commercial microfinance organizations included in the register of microfinance organizations, received from microfinance activities.

Simplified Taxation System

Under the simplified taxation system, small companies that satisfy the eligibility criteria based on number of employees and gross revenue, can pay a unified tax which replaces the corporate income tax, VAT and real estate tax, subject to certain conditions.

The following tax rates apply under the simplified taxation system:

  • 5% of gross revenues (3% if the company continues to pay VAT); and
  • 16% in relation to certain non-operating income such as goods (works or services) and other funds received free of charge.