Taxes and HTP

In the modern world, information technologies play a key role in the development of the economy and society. Belarus is no exception, and a High-Tech Park (HTP) was created to stimulate the development of the IT industry in the country. In this article, we will look at the specifics of taxation of HTP residents, as well as its impact on the development of the IT sector in the Republic of Belarus.

Hi-Tech Park – special legal regime

The Hi-Tech Park (HTP) in Belarus is a special legal regime that is aimed at developing information technologies and innovation activities.
Features of the legal regime include, in particular, a number of tax and other benefits for residents of the Hi-Tech Park:
1. Exemption from value added tax.
HTP residents do not pay VAT in some cases when selling their services and goods. This allows you to reduce costs and increase competitiveness. The VAT rate for non-HTP residents in Belarus is 20%.
2. Reduction of the income tax rate or exemption from tax.
HTP residents do not pay income tax, and for some operations they can use the 9% rate. This is significantly lower than the standard rate of 20%.
3. The prospect of income tax benefits.
For employees of HTP residents, there is a special procedure for paying income tax. It depends on the size of the salary and can be reduced by up to 9%. But in 2024, the general tax rate is 13%, which can be increased to 25% for high incomes.
4. Simplified registration of documents on business operations.
HTP residents can independently draw up primary accounting documents (without the physical signature of the business partner). This simplifies the accounting process and reduces the cost of maintaining it.
5. No currency restrictions.
HTP residents can freely conduct currency transactions related to their activities. This contributes to the development of international relations and attracting foreign investment.
6. There are no customs duties.
HTP residents are exempt from customs duties when importing equipment for use in their activities.
7. Activities on the crypto market are still tax-free
HTP resident companies will not pay taxes from their activities on the Belarusian crypto market in 2024.
These benefits are aimed at creating favorable conditions for the development of information technologies, attracting investment and creating new jobs. They contribute to the development of innovative activities and increase the competitiveness of Belarusian companies in the global market.
The creation of such a legal regime is conditioned by the need to stimulate the development of high-tech sectors of the economy and increase their competitiveness at the international level.

Features of taxation of HTP residents

Residents of the Hi-Tech Park (HTP) cannot apply the simplified tax system, so they should switch to the general system in advance.

If a company that used the simplified system does not receive HTP resident status from the beginning of the reporting quarter, this may complicate the calculation of the income tax base. In such cases, it is better to switch to the generally installed system from the first day of the month in which the company became a HTP resident. It is also recommended to submit quarterly income tax reports starting from the quarter when the transition to the general tax system took place.

The status of a resident begins to take effect on the first day of the month following the decision of the Supervisory Board to register the company as a HTP resident. This helps to avoid problems with tax and accounting.

Features of taxation of income of owners of HTP resident companies

Income of non-resident companies received from activities in the HTP is taxed at the rate of 0% or 5%.
Income of individuals who are founders of HTP resident companies (including foreigners) is subject to income tax at the rate of 9%. Rates of 6% and 0% can also be applied, depending on the periods of profit distribution between the founders.

How do tax benefits in the HTP affect the attraction of employees to HTP resident companies

Tax incentives for residents of the Hi-Tech Park (HTP) in Belarus have a significant impact on attracting employees to companies operating in this location. Here is the positive impact of these benefits:
1. Competitive salaries
Tax breaks make it easier for companies to manage their costs, which makes it possible to offer competitive salaries. High wages are an important factor for attracting qualified specialists.
2. Social guarantees
Companies that are exempt from paying a number of taxes can allocate additional funds for social guarantees for employees, such as training, health insurance, and incentive programs, which makes working in such companies more attractive.
3. Interesting working conditions
HTP residents often offer flexible working conditions, such as remote work, flexible hours, and career opportunities. This creates a more attractive work environment for employees.
4. Focus on innovation.
HTP companies tend to focus on innovative projects and high technologies, which allows them to attract specialists who are interested in working with advanced technologies and developing unique products.
5. Corporate culture development
Tax incentives and opportunities provided by HTP will allow companies to invest in developing a corporate culture, creating a comfortable and supportive atmosphere that helps retain and attract talent.
6. Attracting foreign specialists
Working conditions in HTP companies may interest not only local specialists, but also foreign ones. A large number of IT companies and the opportunity to develop a career in an international environment make HTP an attractive place to work.
7. Networking
The presence of a large number of high-tech companies in the HTP creates opportunities for professional communication and exchange of experience, which also attracts specialists seeking professional growth.
Thus, the tax incentives that apply in HTP contribute to creating an attractive work environment, which in turn helps companies attract and retain talented employees in the IT field.

How HTP resident companies improve the situation of their employees due to the fact that they have tax benefits

Companies that are residents of the Hi-Tech Park (HTP) can use tax incentives to improve the situation of their employees. Here are some ways this can be implemented:
1. Salary increase.
Companies can use the savings to raise employees ‘ salaries. This can lead to an improvement in the quality of life and motivation of employees.
2. Improvement of working conditions.
The money saved can be used to improve working conditions, such as upgrading equipment or creating more comfortable workplaces.
3. Additional bonuses and perks.
The company may offer employees additional bonuses or benefits, such as health insurance, training and development, corporate events, etc.
4. Investing in education.
HTP residents can invest in training and professional development of their employees, which contributes to improving their skills and competitiveness in the labor market.
5. Creating attractive conditions for young professionals.
The company can create attractive conditions for young professionals, offering them competitive salaries, opportunities for development and career growth.
6. Support for social projects.
HTP residents can support social projects aimed at helping those in need, which creates a favorable image of the company and improves the corporate culture.
It is important to note that the use of tax benefits is not a prerequisite for improving the situation of employees. However, it can be an additional tool for companies that want to create a comfortable working environment and increase the level of employee satisfaction.

How do HTP residents ‘ tax benefits affect the development of the Belarusian IT sector

Tax incentives for residents of the Hi-Tech Park (HTP) in Belarus play a significant role in the development of the country’s IT sector. Here are some areas of their influence:
1. Attracting investment
Tax incentives make Belarus more attractive for foreign investors and companies, allowing them to reduce the cost of doing business. Companies can invest more in the development of technology, research and development.
2. Encouraging startups
The preferential tax regime promotes the development of startups, as start-up companies can strive to become HTP residents and reduce their tax expenses, which is important for their survival and growth.
3. Increase employment
The development of IT companies leads to the creation of new jobs. As a result, there is a growing demand for qualified personnel, which in turn encourages educational initiatives and increases the level of education in the field of information technology.
4. Improving competitiveness
Tax incentives allow HTP residents to develop and offer more competitive products and services in both domestic and foreign markets.
5. Ecosystem development
The concentration of many IT companies in HTP creates a favorable ecosystem where companies can exchange experience, find partners and cooperate in various projects.
6. Innovation
Reduced tax burdens allow enterprises to invest more in innovations and new technologies, which helps develop the Belarusian IT market and increase its technological power.
7. Improving the country’s image
The presence of HTP and tax incentives contributes to the formation of a positive image of Belarus as a country open to high technologies and the digital economy, which attracts additional investment and interest from international companies.
In general, tax incentives for HTP residents significantly contribute to the development of the IT sector in Belarus, creating conditions for growth and innovation, as well as strengthening the country’s position in the international arena in the field of technology.