Most foreign groups with a team in Belarus charge the local company for head-office support: finance, HR, legal, IT, and sometimes a share of senior management time. The logic is sound. The Belarusian entity uses those services, and someone has to pay for them.
Problems start when the tax office asks for evidence. A management fee is a payment abroad, to a related company, for something you can’t hold in your hand, and Belarusian inspectors treat it accordingly. Since 2025 there is also a 15% withholding tax on services bought from related foreign companies, which has turned what used to be a bookkeeping entry into a real cash cost for many groups.
Below we cover how the tax rules work, how to build the fee, and what paperwork the Belarusian company should have on file. The examples assume an IT group, but most of it applies to any foreign-owned company.
Most of the packages include group finance and reporting, treasury services, HR systems and policies, legal and compliance assistance, software licences and IT security, as well as input from managers in other countries who supervise the Belarusian team. In some cases, all of these services are included in a single fee, while in other cases each service line is charged for separately. Either of these methods is acceptable provided that you can explain what the package contains.
Outside Belarus these charges are called intra-group services, and groups usually price them under the arm’s length principle described in the OECD Transfer Pricing Guidelines. Belarus isn’t an OECD member, and its inspectors work from the Tax Code rather than the OECD text. The OECD framework is still a sensible way to organise the work, but it won’t answer the Belarus-specific questions on withholding, deductibility and documentation.
From 1 January 2025, income a foreign company earns from works or services provided to a related party became a separate item on the list of income subject to withholding tax. The rate is 15%. Before the change, whether a service fee was taxed at source depended on the type of service. Now the relationship between the parties is enough.
The Belarusian company acts as tax agent. It calculates the tax, withholds it from the payment, files the return and pays the tax. The obligation arises on the earlier of payment or recognition of the service in the accounts, so paying late doesn’t push the tax back.
It is advisable to decide in advance with head office whether or not the fee is to be grossed up. Suppose the parent anticipates receiving EUR 84,000 for the year; in that case, the invoice would have to come to approximately EUR 98,800 since 15 per cent of the amount (that is, around EUR 14,800) is paid to the Belarusian budget. If no decision is made beforehand, the issue arises on the day the first payment is found to be short.
Often it can. Under most double tax treaties, a foreign company’s business profits, service fees included, are taxed only in its country of residence unless it has a permanent establishment in Belarus. Where a treaty applies, it generally takes priority over the domestic rule.
The complication is the list of “unfriendly” states. From 1 June 2024 until 31 December 2026, Belarus suspended treaty provisions with 27 countries, among them most EU states, the US, the UK and Switzerland. The suspended provisions deal with dividends, interest and income from the sale of property. Business profits aren’t on that list, so a parent in one of those countries may still be able to rely on its treaty for service fees.
Before proceeding, verify two points: some treaties have been terminated completely rather than being suspended, so ensure that yours is still in effect. Also, the recipient must have a tax residence certificate for the relevant year. If the certificate has not been prepared by the time you make the payment, the tax can generally be withheld and then reclaimed once the certificate arrives, though the money will remain with the budget until then.
For profit tax, Belarus allows a deduction for expenses that are economically justified and backed by documents. With management fees, inspectors tend to work through the same issues in roughly the same order.
They start with whether the service happened at all. An agreement and an invoice show that money was owed, not that work was done. What helps is evidence produced at the time: reports, emails, minutes of calls, access logs for group systems, and the names of the people at head office who actually did the work.
Next is benefit. Would an independent Belarusian company in the same position have paid for this, or done it itself? Costs the parent incurs as a shareholder fail this test, such as investor relations, the group audit, board meetings and fundraising. So do services the Belarusian company already covers with its own director, accountant or HR manager. Tax authorities in the region have reclassified fees like these as disguised dividends, which brings a different set of tax consequences.
Last comes price. Even a real, useful service can be challenged if the fee is out of proportion to what was delivered, and that’s where the calculation behind the fee matters.
Start with a written description of each service: what it includes, who provides it, and how the Belarusian company uses it. Avoid labels like “management support” or “general services”. They give an inspector nothing to work with, and they also make it harder to decide how VAT applies.
Then build the cost base. Take what head office actually spends on providing the services, mainly salaries of the people involved, software and outside advisers, plus a reasonable share of overheads. Remove shareholder costs and anything that only benefits other group companies.
Allocate the cost with a key that reflects how each service is used: headcount for HR and IT, cost base or revenue for finance, time records for senior management. Write down why you chose each key and stick with it unless something changes.
A simple example: group finance costs EUR 400,000 a year and supports 300 employees, 60 of whom work in Belarus. Allocating by headcount gives EUR 80,000, and a 5% markup brings the fee to EUR 84,000. The markup here is only an illustration. Whatever rate you use should be backed by benchmarking or comparable data, not just group policy.
Finally, invoice regularly. Monthly or quarterly invoices with service acts are much easier to defend than one large charge in December. If you need a year-end adjustment, put the mechanism in the agreement and keep the calculation.
Under the Tax Code, cross-border transactions between related parties are controlled for transfer pricing purposes once they exceed the value threshold. Parties are generally related where one holds 20% or more in the other, directly or indirectly, or can otherwise influence its business decisions. A parent and its Belarusian subsidiary clearly qualify.
The 2026 amendments were intended to bring cross-border and domestic transactions under a single threshold approach. Thresholds are revised from time to time, so check the current figure each year.
If the fee is a controlled transaction, the Belarusian company may have to show that the price is at market level. Inspectors reviewing services usually look at the overall margin rather than individual invoices, which is one more reason to keep the cost-plus calculation tidy.
Belarus has two forms of supporting documents: full transfer pricing documentation and a simplified economic justification of the price. A group master file is a useful source, but it isn’t a substitute for documents prepared for Belarus.
Related-party transactions also have to be marked on electronic VAT invoices. Missing that mark can lead to a fine even when the pricing is correct.
VAT on services from abroad
For services that Belarusian law treats as supplied where the buyer is located (consulting, accounting, legal and marketing services are common examples), the Belarusian company pays 20% VAT itself on services bought from a foreign provider. The wording of the contract affects how a service is classified, so vague descriptions can create VAT questions as well as profit tax ones.
HTP residents
Profit an HTP resident earns from its core IT activity is exempt from profit tax, so deductibility matters less for that income. Withholding tax, VAT and transfer pricing rules still apply.
The HTP rules give a VAT exemption on purchases from foreign companies only for listed services, and the 0% withholding rate only for listed types of income. Management fees are usually on neither list, but the wording is detailed enough that it’s worth checking against your own services. We go through these lists in our article on VAT mechanics for HTP residents.
Offshore jurisdictions and banks
Payments to a company registered in a jurisdiction on Belarus’s offshore list may also attract the offshore levy. Separately, banks checking outgoing payments under currency control rules can ask for the agreement and acts before releasing the money, so keep them easy to find.
Changes for 2027
The Ministry of Finance has said the 2027 tax package will not bring major changes. The treaty suspension and related measures are due to expire on 31 December 2026, though, and whether they’re extended will matter for next year’s planning. New legislation is published on the National Legal Internet Portal.
This is the file we suggest the Belarusian company has in place before the first invoice is paid.
| Intercompany services agreement | Scope, pricing method, and payment terms | List services specifically and include the year-end adjustment |
| Russian or Belarusian translation | That your documents meet local requirements | Primary accounting documents must be in Belarusian or Russian |
| Service catalog and cost allocation workbook | How the fee was calculated | Keep it reconcilable to HQ’s actual costs |
| Benchmarking or markup support | That the price is arm’s length | Update it every few years |
| Service acts (monthly or quarterly) | What was delivered in each period | Describe deliverables, not just “services rendered” |
| Evidence of delivery | That the service actually happened | Reports, emails, meeting notes, system access logs |
| Tax residence certificate | Eligibility for treaty relief | Must cover the year in which income is paid |
| Withholding returns, VAT filings, e-VAT invoices | That your compliance is complete | Flag related-party transactions on e-VAT invoices |
| Transfer pricing documentation (if controlled) | Economic justification of the price | Easier to prepare during the year than under audit |
For an English summary of the 2025 Tax Code amendments, including the new withholding rule for services from related parties, see VMP’s overview of taxation in Belarus in 2025.
These are the issues that most often lead to questions from inspectors:
Auditors look for the same things. If you’re not sure whether your company needs a statutory audit, see our article on statutory audit thresholds for foreign-owned IT companies.
If head office charges for bookkeeping, payroll, HR administration or office management, consider whether those tasks would be simpler to handle in Belarus.
A Belarusian service provider isn’t a foreign company, so the withholding tax on foreign companies doesn’t apply to its fees. You still need a contract and acts, but a local company paying a local provider for local work is easy to explain. This is how our management services for foreign-owned IT companies are set up: we handle day-to-day operations in Minsk, and decisions stay with the group.
Usually, yes. Since 2025, services provided by a related foreign company are subject to 15% withholding tax in Belarus. A treaty may remove it if the treaty is in force and the recipient provides a residence certificate.
Not directly. It covers dividends, interest and income from the sale of property for 27 countries. Business profits, which include service fees, aren’t covered. Some treaties have been terminated altogether, so check yours. Our article on dividend tax planning for Belarusian IT subsidiaries explains how the suspension affects dividends.
It can, but it’s hard to defend unless revenue really reflects how the services are used. A fee calculated from actual costs, allocated with a clear key and a supported markup, is much easier to explain.
No. Hi-Tech Park residency exempts profit from core IT activity, but withholding tax and VAT on services bought from abroad can still apply. The HTP exemptions for foreign purchases cover only listed services and types of income.
The agreement with a Russian translation, the cost and allocation calculation, support for the markup, monthly or quarterly acts, evidence that the work was done, the recipient’s residence certificate, and withholding, VAT and e-VAT records. If the transaction is controlled, add transfer pricing documents.
At least once a year, and whenever the group structure, the services or the Belarusian rules change.
If you charge a management fee to a Belarusian company, year-end is a good time to review it. Check whether the treaty with the parent’s country still applies and whether the residence certificate for 2027 is on its way. Compare the service description with what head office actually does. Make sure the allocation and markup are documented, the acts describe real work, and related-party transactions are marked on e-VAT invoices.
If you’d like us to look at your current arrangement, contact our team. We’ll go through the agreement, the calculation and the filings, and tell you where the gaps are.
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