Offshore tax in Belarus: from calculation to payment – Corporate / Commercial law
Belarus: Offshore tax in Belarus: from calculation to payment
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Working with companies from offshore areas provides additional obligations for Belarusian counterparts and requires some control.
An offshore zone, for tax purposes in Belarus, is recognized as a state (territory) with preferential tax treatment and / or does not provide for the disclosure and provision of information on financial transactions.
The list of such areas was approved by Decree of the President of Belarus No. 353 of May 25, 2006, which currently includes 52 jurisdictions.
For example, the British Virgin Islands, Montserrat, Maldives, Principality of Andorra, Principality of Liechtenstein, Republic of Montenegro and others are recognized as offshore. However, the Republic of Cyprus and the Kingdom of the Netherlands are not included in the list.
A full list of offshore areas is available at the link: https://pravo.by/document/?guid=3871&p0=P30600353.
The offshore tax rate is 15% of the amount transferred to a non-resident (monetary obligation) or the contract price (non-monetary obligation).
For reference: Hi-Tech Park residents do not pay offshore fees when paying for advertising, marketing, intermediary services, as well as when paying (transferring) dividends to their founders (participants), a part of the profits accruing to the owner of their property.
However, not for any interaction with a non-resident of the offshore areas it is necessary to pay such a fee. It does not need to be paid when the offshore company returns funds previously received as a loan or loan, when making payments under contracts for the carriage of goods by sea and freight forwarder contracts, in some cases when of the change of person in the obligation.
For example, if a resident of the Dominican Republic (offshore area) provided marketing services to a Belarusian business organization. Prior to payment for these services, the offshore company assigned the right of claim under the contract to a French resident. Since in this situation there has been a change of persons in the obligation, the parties of which are the resident and the non-resident registered in the offshore zone, the offshore tax must be paid.
It should be remembered that without the listed offshore fees, a Belarusian bank will not make a payment in connection with an offshore company or an account opened in an offshore area.
In this situation, the bank acts as an agent of currency control on the basis of banking legislation. To confirm payment, a payment order must be submitted to the bank for the payment of offshore tax. If necessary, additional information about the company in the offshore zone will be requested from the Belarusian organization.
The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.
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