Post BEPS International Tax Planning 2020
What are your top 5 issues as follows?
Short Summary for RSM Global BEPS webpages
1. Changes to Tax Treaties
The relations of the Republic of Belarus with other states and international structures are constantly expanding, so between the Republic of Belarus and other countries were signed many Conventions in 2017.
The Convention establishes the procedure for payment of income tax, profit tax, personal income tax, and real estate tax. The Convention may establish a different taxation regime depending on the nature of the activity and type of income of the payer.
Below are the main Conventions signed in 2017:
1. A Convention has been signed between the Government of the Republic of Belarus and the Government of the United Kingdom of Great Britain and Northern Ireland on the elimination of double taxation with respect to taxes on income and capital and prevention of tax evasion.
2. Agreement between the Government of the Republic of Belarus and the Government of the Republic of Ecuador on avoidance of double taxation and prevention of tax evasion with respect to taxes on income and property (capital).
3. The Statement on Amendments to the Convention was signed between the Government of the Republic of Belarus and the Government of the Islamic Republic of Pakistan on avoiding double taxation and preventing tax evasion with respect to income taxes.
4. During the working visit of the delegation of the Ministry of Foreign Affairs of the Republic of Belarus to the Kingdom of Spain, a convention was signed between the Republic of Belarus and the Kingdom of Spain on avoidance of double taxation and prevention of tax evasion with respect to taxes on income and capital.
5. An agreement was signed between the Government of the Republic of Belarus and the Government of the Hong Kong Special Administrative Region of the People's Republic of China on avoiding double taxation and preventing tax evasion with respect to taxes on income and capital in Hong Kong.
2. Increased information disclosure
Entities should disclose information about Related parties in the Republic of Belarus and outside the country.
Related parties are affiliated persons of the economic company; Unitary enterprises, owners of property and (or) the leaders of which are the same physical persons or are in close relationship or property.
According to Decree of the Ministry of Finance of the Republic of Belarus of December 12, 2016 №104 "On Approval of the National Accounting and Reporting Standard" Individual Accounting Reporting " in the notes to the financial statements entity should disclose information on the availability of related parties, the nature of relations and the economic transactions concluded between them in the reporting period, including the amounts of business operations performed during the reporting period and assets, liabilities, equity that occurred as a result of these business transactions, as well as the conditions for the conduct of business operations, data on guarantees provided and received, as of the end of the reporting period; the amount of provisions for doubtful debts at the end of the reporting period related to receivables from related parties; the amount written-off in the reporting period due to provisions for doubtful debts and (or) expenses is uncollectible to receivables from related parties.
Information on the availability of related parties is subject to disclosure, regardless of the performance in the reporting period of business transactions between these related parties.
3. GST changes
Fundamental document regulating the issues of taxation is the Tax Code of the Republic of Belarus, which provides for the possibility to select the taxation system by entities of entrepreneurial activity, as well as types of taxes.
Taxpayer carries out business activities can use simplified tax regime if the number of employees on average for the indicated period is not more than 100 people, and gross revenue by the cumulative total for the nine months is no more than 1 159 800 and 126 700 Belarusian rubles.
Legal entities engaged in entrepreneurial activity under general tax regime, mainly pay the following republican taxes: value-added tax (VAT), corporate and personal income tax, property, land and environmental tax, compulsory insurance contributions and against accidents at work and occupational diseases, and others. Local taxes and fees include: Dog ownership tax, Resort fee and Collection from the procurement.
4. VAT changes
In accordance with the Decree of the Ministry of Taxes and Duties of the Republic of Belarus of April 25, 2016 No. 15, the form of the electronic invoice was established and the Instruction was approved on the procedure creation (including filling), submission (direction), receipt, signing and storage of electronic invoices.
An electronic invoice is a mandatory electronic document for all payers of value-added tax that serves as the basis for calculating the value-added tax between the seller and the buyer and deducting VAT amounts. The form and format of the electronic invoice, the procedure for its creation (including filling), issuance (direction), receipt, signing and storage are approved by the Ministry of Taxes and Dues of the Republic of Belarus.
Value-added tax (VAT) has standard rate – 20%. And 25 percent - in the implementation of telecommunication services. Also we have zero rate and 10% in cases specified in the Tax Code.
An electronic invoice is created by the payer directly on the Portal or downloaded as an XML-format file prepared by the payer. The cost of goods (works, services), property rights and the amount of value added tax in the electronic invoice are indicated in the national currency of the Republic of Belarus.
When importing goods into the territory of the Republic of Belarus (from the territory of the member states of the Eurasian Economic Union, from other territories), an electronic invoice is also created and sent by the payer to the Portal in accordance with the established procedure.
5. Transfer Pricing
On January 1, 2012, came into force the Article of the Tax Code of the Republic of Belarus, according to which the tax authorities have the right to check the compliance of prices applied by the payer, the level of market prices for foreign trade transactions, when their amount exceeds the amount established by the Tax Code, and for real estate transactions (that is, to reveal the facts of application of transfer prices by the payer).
The rules of transfer pricing apply not only to goods and services, work, but also to property rights. Under the rules of transfer pricing in Belarus, the completeness of calculating and paying only the profit tax is checked. Adjustments do not affect VAT and other taxes, nor do they require changes to the primary accounting documents for accounting purposes.
The tax authority during the on-site tax audit has the right to verify the compliance of the tax base for the profit tax, paid by the payer in the tax declaration on the basis of the prices applied by it, and the tax base determined with regard to market prices.