HTP tax advantages compared to the ordinary tax system
HTP residents receive the following tax incentives:
- Profit tax exemption;
- Value added tax exemption;
- Offshore duty (tax) exemption;
- Land tax exemption. This tax incentive concerns land plots within the HTP boundaries for the period of construction on them by residents. But not more than for 3 years, of capital structures (buildings, construction) intended for HTP residents’ activities;
- Real-estate tax exemption;
- Income tax exemption. Exemption from income tax applies to income of individuals received from the sale of shares in the authorised fund of HTP residents. It must be owned by an individual for at least 365 calendar days continuously. The shares of HTP residents disposed of not earlier than 365 calendar days from the date of acquisition;
- Import customs duties exemption (in accordance with the international obligations of the Republic of Belarus) levied by the customs authorities;
- VAT and profit tax exemption for mining, buying/sell and exchang of cryptocurrencies, and other token transactions;
- Exemption from local taxes and fees of HTP residents located on the territory of Minsk;
- Application of the 0 % tax rate on profits of foreign organizations that do not operate in Belarus through a permanent establishment;
- Payment of income tax at the 9 % rate. But in 2021-2023, the rate of 13% applies as part of measures aimed at combating the COVID-19 pandemic;
- 5 % tax rate on profits of foreign organizations, not operating in Belarus through a permanent establishment, on dividends.
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NSSF (National Social Security Fund) contributions in and outside the HTP: differences
HTP residents, in accordance with the incentives and preferences granted by legislation, are entitled to apply a reduced base amount in calculating obligatory insurance contributions to the NSSF.
Employees of HTP residents and HTP residents are subject to compulsory state social insurance, as well as other economic entities.
However, the amount of such insurance contributions for HTP residents under the incentives granted to them is significantly lower. Than for other entities and individual entrepreneurs, who are not HTP residents.
In particular, for HTP residents, obligatory insurance contributions are not charged on the part of an employee’s income (except for employees engaged in service and security of buildings, premises and land) of an HTP resident which is an object for charging such contributions and exceeds a one-time average wage of employees in Belarus for the month preceding the month for which the obligatory insurance contributions are to be paid.
Outside the HTP, the objects for the charging of obligatory insurance contributions to the fund’s budget for employers and employees are payments of all types in cash and/or in-kind, charged in favor of employed citizens on all grounds. Regardless of the sources of financing (hereinafter – payments), including remuneration under civil law contracts, except as provided in the list of payments on which obligatory insurance contributions are not charged to the fund’s budget.
In accordance with the Regulation, employees of HTP residents have the right to refuse to use the above incentives.
If an HTP resident has a gross salary higher than the average salary of employees in the republic for the previous month and has not refused to use the incentive, then the amount of obligatory insurance contributions to the NSSF for such an individual will always remain the same regardless of the actual amount of salary and other payments in cash and in-kind, which are objects for charging obligatory insurance contributions to the NSSF, of such an employee for the month.
Аmount of obligatory insurance contributions for insurance
The Law “On obligatory insurance contributions to the budget of the state extra-budgetary fund of social protection of the population of the Republic of Belarus” stipulated the amount of obligatory insurance contributions for insurance of retirement, disability and loss of breadwinner (pension insurance):
- employers – 28 %;
- individuals who pay obligatory insurance contributions on their own, for Belgosstrakh – 29 %;
- employed citizens – 1 %.
The amount of obligatory insurance contributions for insurance in case of temporary incapacity for work, pregnancy and birth, childbirth, taking care of a child under three years of age, granting one day off work per month to a mother (stepmother) or a father (stepfather), foster parent (guardian) bringing up (raising) a disabled child under the age of 18, death of the insured or a member of his/her family (social insurance) for employers, individuals paying obligatory insurance contributions on their own, Belgosstrakh (for persons who receive additional payment to the average monthly earnings or are paid insurance benefit for temporary incapacity for work) is 6 %.
Please note, that the amounts of obligatory insurance contributions determined by the Law for HTP residents are the same as for other economic entities. For HTP residents only the “base” for charging obligatory insurance contributions to the NSSF has been reduced.
HTP residents also have the right to simultaneously apply the incentives provided by the other LSIs (Laws and Statutory Instruments) as well.
Obligatory annual reporting by HTP companies
In addition to significant tax incentives, HTP residents also receive a number of obligations in the form of periodic obligatory reporting. Obligatory annual reporting of HTP residents is provided by the Regulations “On the High Technology Park” and the Law of the Republic of Belarus “On Auditing”.
So, an HTP resident is obliged:
- to submit, copies of state statistical reports, tax declarations (calculations) on taxes, fees (duties), which he/she pays for;
- quarterly, not later than the 10th day of the month following the reporting quarter, to inform the HTP Administration and the tax authority about the cash flow, as well as about the flow of electronic money through electronic wallets;
- annually carry out an obligatory audit of the annual accounting (financial) reports and submit the audit report on the results of the audit of these reports to the HTP Administration no later than 1 July of the year;
- within one month after the audit, but no later than 15 July, to provide information on the fact of the obligatory audit to the Ministry of Finance of the Republic of Belarus;
- annually, by February 1 of the year, to submit a report on the activities carried out to the HTP Administration;
- to submit accounting (financial) reports to the tax authorities by March 31;
Payment of percent of revenue: time frame, amount of percentage deductions
HTP residents are obliged to pay to the HTP Administration 1% of the revenues (profit) received during the preceding quarter as a result of the activities set out in the Regulations on a quarterly basis.
This fee is not a tax payment, but it belongs to the category of obligatory payments.
Audit for the HTP companies
The statutory audit is an annual obligatory audit of the financial statements and other documents of an organisation. It’s provided by the existing legislation in order to assess the accounting reports for the audited period and the compliance of the financial and economic transactions with the legislation of the Republic of Belarus.
It can be said that the statutory audit of HTP residents has become a significant factor in the state’s control over the most dynamically developing industry in the country.
According to Article 22 of the Law “On Auditing”, the annual individual and consolidated (if any) accounting and/or financial reports (hereinafter – reports) of HTP residents prepared in accordance with the legislation is subject to an annual statutory audit.
According to the contract on the operational environment of an HTP resident signed between the resident and the HTP Administration (the sample contract form was approved by the HTP Supervisory Board No. 08/NS-2pr of 26.04.2018), an annual statutory audit of the HTP resident’s reports is performed, including the assessment of the accuracy of calculation and remittance of deductions to the HTP Administration.
The statutory audit of the annual accounting and/or financial reports must be conducted no later than June 30 of the year following the reporting year.
What is the cost of accounting services for IT companies and HTP residents in Belarus?
The cost of accounting services is always negotiable and depends on the tasks that the customer sets for the contractor. As well as the timing of their implementation. We always delve into the client’s business. Build with him a convenient and flexible system of payment for our services and interaction with the client. Contact us to get a quote for accounting services:
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