In the modern world, international investments play a key role in the development of the economies of various countries. Therefore, it is extremely important for foreign investors to have a complete understanding of the tax system in the country in which they plan to invest. In Belarus, income tax agents play an important role in the process of paying taxes and complying with tax legislation. In this article, we will look at why foreign investors need to know about income tax agents in Belarus and what tasks tax agents have.
Why it is important to know about the duties of income tax agents
It is important for foreign investors to know about income tax agents in Belarus, as agents play a significant role in complying with tax legislation and paying taxes correctly. Knowledge of tax agents will help investors to structure their investments and business processes correctly in order to avoid possible tax risks and undesirable consequences.
Moreover, the calculation of income tax can be outsourced to a professional accountant in the field of income tax. He will provide investors with professional advice and assistance in calculating and paying taxes, which can significantly save the investor’s time and resources. Understanding the role and functions of tax agents will also help foreign investors conduct business in accordance with local laws and minimize tax liabilities.
Thus, knowledge of income tax agents in Belarus is one of the components of successful and safe investment for foreign investors.
Who are income tax agents?
Income tax agents are companies and individual entrepreneurs who pay income to individuals in Belarus. Tax agents in Belarus include:
- Companies that are established in Belarus.
- Individual entrepreneurs who are registered in Belarus.
- Belarusian notaries.
- Representative offices of foreign companies in Belarus and foreign companies that have a permanent representative office in Belarus.
- Notary chambers.
What should tax agents do?
Tax agents must:
- Calculate income tax;
- To keep it from the income of an individual;
- Transfer income tax to the budget.
As a rule, at the same time as income tax, a mandatory insurance contribution for pension insurance is calculated, withheld and transferred to the budget.
Tax agents perform these duties when a company or individual entrepreneur pays income to individuals, both residents and non-residents: employees, contractors, sellers of property, shareholders, persons who won in advertising games, etc.
What tax agents have the right to do
Tax agents have the right to:
- Receive clarifications on tax issues from tax and other government agencies.
- Represent the interests of the company in the tax authorities, including through a representative.
- Explain the situation when conducting a tax audit.
A number of other rights of tax agents are related to their interaction with tax authorities.
Calculation, withholding and payment of income tax by tax agents
Calculation, withholding and payment of income tax occurs in stages.
Step 1. Determining the tax base for calculating income tax
The tax base is the amount of an individual’s income from which income tax must be withheld. In general, the tax base is determined every calendar month of the year.
To determine the tax base, you need to reduce the amount of an individual’s income by the amount of deductions. Deductions are amounts that are not subject to income tax. The following types of deductions are established in Belarus:
- Standard;
- Social;
- Property rights;
- Professional ones.
In some cases, an individual must provide documents on the rights to deductions. Each deduction has its own set of documents. To understand the specifics of providing deductions to individuals, you can consult with our experienced accountants. You can also transfer to them the business process of calculating and withholding income tax in your company.
Step 2. Calculation of income tax
To calculate the amount of income tax, the tax base is multiplied by the income tax rate. The total income tax rate in Belarus is 13%. In certain cases, the rates apply 10%, 9%, 6%, 4%. You can decide on the rate and calculation by consulting an accountant.
Step 3. Withholding income tax
Income tax is withheld upon the actual payment of income to an individual.
When income is paid to an individual several times a month, you can not withhold income tax when paying income for the first half of the month. In this case, the tax is withheld from the income of an individual (he is called an “income tax payer”) for a full month. This procedure does not apply to the payment of “vacation pay” to an employee — this is the salary that is paid to an employee before a work vacation. Income tax is immediately deducted from this amount.
Step 4. Payment of income tax
As a general rule, the tax is paid no later than the day of transfer of income to an individual. In some cases, other tax payment deadlines have been set, which can be sorted out in consultation with an accountant.
Transfer of information on paid income by a tax agent to the tax authorities
Information on income and income tax benefits applied must be submitted annually by tax agents to the tax authorities. There are a number of exceptions to this rule, which can be found out in consultation with an accountant.
The information is transmitted before April 1 of the year following the reporting calendar year. Information is transmitted electronically in a special form.
When the tax agent does not need to calculate income tax
In some cases, when paying income to individuals, the tax agent does not need to calculate and pay income tax to the budget. Here are some of these cases:
1. When individuals who receive income pay taxes on their own, they are individual entrepreneurs. To determine that a person is an individual entrepreneur, they usually ask for a copy of the certificate of state registration. The data of such a certificate is prescribed in contracts that are concluded with individual entrepreneurs. We are talking about income related to the entrepreneurial activities of individuals. It is more difficult with foreign entrepreneurs — as a general rule, taxes are withheld at the rate of 13% from the income they receive in Belarus. But international treaties may provide for a different taxation procedure.
2. When a company or an individual entrepreneur buys plant products grown by them from individuals.
3. When a company buys from an individual:
- An unfinished building on land that is provided for the construction of an apartment building, an apartment building, an apartment, a garage, a parking space or a share in the ownership of such property,
- A car weighing no more than 3,500 kg.
4. When the income paid to an individual does not require taxation by virtue of Belarusian legislation. A list of such incomes can be obtained by consulting an accountant.
How to contact us
For more information or advice on issues related to the activities of tax agents, do not hesitate to contact us. We are here to help and support you.
Phone and e-mail communication options are available for your convenience:
- +375293664477 (WhatsApp/Telegram/Viber);
- info@spex.by.
