A lot of IT group companies write their code in Minsk and keep the intellectual property somewhere else: a holding company in Cyprus or the Netherlands, the US parent, or a hub in the UAE. When the Belarusian company uses that IP to earn money, the group usually wants a royalty to flow back to the owner.
On a group chart this looks neat. In Belarus it raises three questions. Who actually created the IP and who controls it now? How much tax is withheld when the royalty leaves the country? And is the payment really a royalty, or is it a service fee or a dividend under another name?
This guide covers the main setups, the withholding rules, what changes for Hi-Tech Park residents, and the paperwork the Belarusian company should keep.
In the first setup, the Belarusian company is a contract developer. It writes software for the parent, gets paid its costs plus a markup, and the IP is assigned to the parent as it’s created. Nothing flows out of Belarus as a royalty, because the Belarusian company never uses the IP for its own business.
In the second scenario the Belarusian company obtains a licence over the group’s IP in order to carry on its own business. It could sell the parent company’s platform to its local clients, use the group’s trademark, or make use of the know-how developed elsewhere. In this case a royalty is appropriate and it is the Belarusian company that pays it.
The third arrangement combines the first two and is the one which generates the greatest number of questions. The Belarusian company produces the product, gives it to the parent firm, and then licenses it back from them while paying royalties. Looking at this from the inspector’s point of view, the subsidiary is paying for something that it itself has made. This does not make the structure invalid, but it does require a clear explanation of the parent’s contributions after the product has been assigned.
The defensibility of a royalty depends entirely on the licensor’s ownership; in Belarus law the exclusive rights to software developed by employees as part of their duties usually belong to the employer unless the employment contract provides otherwise. Therefore, if the developers are employed by the Belarusian company then the intellectual property begins with them.
In order to transfer it to the parent company, you must have an assignment agreement that specifies a clear date, a well-defined scope and a price that can be explained. Since the payment for the assignment is considered income by the Belarusian company, it is subject to its own tax rules. If the IP includes patents or trademarks that are protected in Belarus, you should also verify whether the licence agreement has to be registered with the National Center of Intellectual Property.
Without this paper trail, the foreign company can’t show that it owns what it’s licensing, and the royalty has nothing to stand on.
Royalties paid to a foreign company are subject to Belarusian withholding tax at a standard rate of 15%. The Belarusian payer acts as tax agent: it calculates the tax, withholds it, files the return and pays it. The obligation arises on the earlier of payment or recognition of the royalty in the accounts.
Double tax treaties usually reduce that rate, often to single digits, and a few remove it entirely. The 2024 suspension of treaty provisions with “unfriendly” states doesn’t change this, because it covers only dividends, interest and income from the sale of property. Royalty articles were left in place, so treaty rates still apply for licensors in most of those countries, as long as the treaty itself is still in force.
This is the change most groups underestimate. Since 2025, a foreign company claiming a treaty benefit that depends on being the beneficial owner of the income has to provide a beneficial owner confirmation alongside its tax residence certificate. Most royalty articles include that condition.
The confirmation is submitted through the Belarusian tax agent on the Ministry of Taxes and Duties form. It’s valid for the calendar year in which it was issued, so it has to be renewed every year, and it can be filed before or after the tax return. There is a carve-out for small amounts: the requirement doesn’t apply where the tax not paid thanks to the treaty benefit stays within BYN 40,000 for the year.
For an IP holder with no staff and no real role in managing the IP, the beneficial owner test is where the structure can fail. If the royalty passes straight through to another company, the treaty rate may not be available at all.
Classification matters more than it seems. Access to a SaaS platform, technical support or bundled maintenance may be treated as a service rather than a royalty. Since 2025, services from a related foreign company are also taxed at 15% in Belarus, so the domestic rate is the same. Under a treaty, though, the outcome differs: royalty articles usually let Belarus keep some tax, while service income typically falls under business profits and is taxed only where the recipient is resident. Describe what you’re actually paying for in the contract, and split mixed arrangements where you can.
If the Belarusian company is an HTP resident, the picture changes. Royalties paid by an HTP resident to a foreign company are taxed at 0%, and according to the Ministry of Taxes and Duties this applies regardless of whether the IP is registered with the Belarusian patent office. Dividends paid by HTP residents to foreign shareholders, by comparison, are taxed at 5%.
That makes royalties a tax-efficient way to move money out of an HTP resident, which is exactly why the substance questions still matter. The HTP regime also exempts residents from profit tax on core activities, so the deductibility of the royalty is less of an issue. What remains is whether the IP really sits abroad, whether the payment is genuinely a royalty, and whether the bank is satisfied with the documents.
On VAT, the HTP rules exempt residents from VAT on a specific list of purchases from foreign companies, and property rights to IP are part of that list. Check that your licence fits the wording before relying on it. We cover the boundaries in more detail in our article on VAT mechanics for HTP residents.
For companies outside the HTP, royalties are deductible for profit tax only if they’re economically justified and documented. Inspectors look at the same three things as with any intercompany charge: is the right real, does the Belarusian company benefit from it, and is the rate at market level?
Under Belarusian rules, cross-border transactions with related parties are controlled for transfer pricing purposes once they pass the value threshold, and a royalty to a parent company is a typical example. Your group’s transfer pricing policy is a useful starting point, but it won’t replace documents prepared for Belarus.
The international approach to intangibles is set out in Chapter VI of the OECD Transfer Pricing Guidelines. The idea is simple: the return from IP should go to the companies that perform and control its development, enhancement, maintenance, protection and exploitation. If all of that happens in Minsk and the IP holder only signs the licence, a high royalty is hard to defend, in Belarus or anywhere else.
Here’s how the numbers can work. Say the Belarusian company earns EUR 2,000,000 a year from local clients using the parent’s platform and pays an 8% royalty, or EUR 160,000. At the standard 15% rate, EUR 24,000 is withheld. With a 5% treaty rate and the right confirmations, the tax drops to EUR 8,000. For an HTP resident it would be zero. The rate itself should come from benchmarking comparable licences, and it shouldn’t leave a profitable subsidiary with a loss.
Outside the HTP, a Belarusian company that acquires non-exclusive rights to IP from a foreign licensor generally has to calculate and pay 20% VAT itself. Some types of IP rights have their own exemptions, so the exact wording of the licence matters. If the agreement bundles a licence with services, the VAT treatment of each part can differ.
Belarus has introduced a range of restrictions for businesses linked to unfriendly countries, and they affect how money can leave the country. Dividends and profit paid to owners from those countries can only go to special accounts in Belarusian rubles. Royalties aren’t covered by that regime, which makes them look like an attractive alternative. Inspectors and banks know this, so a royalty that appears right after dividend restrictions start to bite will get a close look.
A separate law limits exclusive rights to IP owned by rightsholders from unfriendly states. It allows certain IP to be used without the owner’s consent, with fees paid into the patent office’s accounts and held for three years. Its key provisions have been extended to the end of 2026. This is a different situation from a normal licence between group companies, but it’s worth knowing it exists.
Two more checks. If the IP holder is registered in a jurisdiction on Belarus’s offshore list, payments may attract the offshore levy (HTP residents are exempt from it). And ask your bank early what it will want to see before processing royalty payments abroad. For an overview of the restrictions on profit distributions, see our guide to dividend tax planning for Belarusian IT subsidiaries.
This is the file we suggest the Belarusian company has in place before the first royalty is paid.
| Licence agreement | What is licensed, where, for how long, and how the royalty is calculated | Name the specific software, platform or trademark, not “group IP” |
| Russian or Belarusian translation | That your documents meet local requirements | Primary accounting documents must be in Belarusian or Russian |
| Proof of ownership and chain of title | That the licensor actually owns what it licenses | Assignment agreements from the Belarusian entity and any other developers |
| Royalty calculation and usage reports | How each payment was worked out | Tie the base (revenue, users, units) to figures in your own books |
| Benchmarking of the royalty rate | That the rate is at market level | Use licences for comparable IP, not a group-wide default |
| Tax residence confirmation | Eligibility for treaty relief | Must cover the year in which the royalty is paid |
| Beneficial owner confirmation | That the licensor is entitled to the treaty rate | Filed every year, on the Ministry of Taxes and Duties form |
| Withholding returns and VAT filings | That your compliance is complete | Keep the treaty or HTP basis for any reduced rate on file |
| Transfer pricing documentation (if controlled) | Economic justification of the price | Easier to prepare during the year than under audit |
New legislation, including amendments to the Tax Code and the HTP rules, is published on the National Legal Internet Portal.
These are the patterns that most often lead to questions:
A royalty is the right answer when the Belarusian company really uses IP owned and managed abroad to run its own business. In other cases, a different model is simpler. If the team in Minsk mostly develops for the group, contract R&D with IP assigned to the parent avoids royalties altogether. If the parent mainly provides support, a service charge may fit better.
The right choice also depends on how the Belarusian company is run day to day. If you need local directors, accounting and compliance handled in one place, our foreign subsidiary management services are built for exactly this kind of setup.
The standard rate is 15%. A double tax treaty can reduce it or remove it, provided the treaty is in force and the licensor provides a residence certificate and, where the treaty requires it, a beneficial owner confirmation. HTP residents apply 0%.
No. The suspension covers only dividends, interest and income from the sale of property. Royalty articles still apply, although some treaties have been terminated altogether, so check the status of yours.
It’s a document, on a form set by the Ministry of Taxes and Duties, in which the foreign company confirms that it’s the actual owner of the income rather than an intermediary. Since 2025 it’s required alongside the residence certificate whenever a treaty benefit depends on beneficial ownership, and it has to be renewed every year.
It depends on what the Belarusian company actually receives. Remote access to a platform without any right to copy or modify the software is often treated as a service. The contract wording and the way the product is delivered both matter.
Yes. Royalties paid by an HTP resident to a foreign company are taxed at 0% under the Hi-Tech Park regulations. You still need to show that the payment is a genuine royalty for IP the licensor owns.
You can, but expect questions. The assignment needs a market price, and the parent needs to contribute something real after the transfer, such as funding, product decisions or protection of the IP. Otherwise the royalty looks like a payment for the subsidiary’s own work.
Check that the chain of title is complete and that the licensor can show it owns the IP. Confirm that the treaty with the licensor’s country is in force and which rate it gives, and get the residence and beneficial owner confirmations for the year in hand. Make sure the royalty base and rate are documented and benchmarked, and that the contract describes what’s actually being licensed.
If you’d like us to review your current setup, contact our team. We’ll look at the licence, the confirmations and the filings and tell you where the gaps are.
