Who are Income Tax Agents in Belarus

In Belarus, tax agents responsible for paying income tax help to comply with tax legislation. In this article, we will look at why it is important to understand the role of income tax agents in Belarus and their main tasks.

Why is it important to understand the role of tax agents

For foreign investors and other companies that pay income to individuals in Belarus, it is essential to familiarize themselves with the functions of income tax agents in Belarus since their role in compliance with tax legislation and the correct payment of taxes is undeniable. Thanks to the knowledge about their activities, you can structure your investments and business processes more effectively, reducing the likelihood of tax risks and undesirable consequences.

It is possible to outsource income tax calculation to a qualified accountant specializing in this field. This specialist will provide professional advice and assistance in determining and paying taxes, ultimately saving the investor’s time and resources. 

Understanding the functions and importance of tax agents will also help foreign investors to follow local legislation and minimize tax liabilities.

So, awareness of the work of income tax agents in Belarus is critical to successful and safe investment for foreign investors.

Who are income tax agents

Income tax agents in Belarus are legal entities and individual entrepreneurs who make income payments to individuals. The list of tax agents in Belarus includes the following categories:

• Legal entities registered on the territory of Belarus.
• Individual entrepreneurs registered in Belarus.
• Notaries operating in Belarus.
• Representative offices of foreign companies and foreign companies with permanent representation in Belarus.
• Notary chambers.
• Banks withhold income tax when they pay income on bank deposits to individuals.

Duties of tax agents

The duties of tax agents include the following actions:

• Calculation of income tax;
• Deduction of this tax from the income of individuals;
• Transfer of income tax to the budget.

In addition to income tax, tax agents usually calculate, withhold and transfer mandatory pension insurance contributions to the budget.

These duties arise for tax agents when paying income to individuals, regardless of their residence: employees, contractors, property sellers, shareholders, winners of advertising games and others.

What rights do tax agents have

Tax agents are granted the following rights:

• To request clarifications on taxation issues from tax and other government agencies.
• To represent the company’s interests before the tax authorities, including the opportunity to speak through an authorized representative.
• Explain the situation when conducting a tax audit.
• In addition, tax agents have several other rights related to their activities and interaction with tax authorities.

Income tax administration by tax agents

Tax agents’ calculation, withholding and transfer of income tax is carried out in stages.

Stage 1. Determination of the tax base for tax calculation

The tax base is the amount of an individual’s income from which income tax deduction must be carried out. Usually, the tax base is determined every month.

To determine the tax base, it is necessary to deduct the amount of deductions from an individual’s income. Deductions represent tax-exempt amounts. Belarus has established various types of deductions:

• Standard ones.
• Social.
• Property rights.
• Professional ones.

Sometimes, an individual must provide documents confirming the right to deductions. Certain documents are required for each deduction. You can delegate calculating and withholding income tax to our company.

Stage 2. Calculation of income tax

To determine the amount of income tax, it is necessary to multiply the tax base by the income tax rate. The total income tax rate in Belarus is 13%. In some cases, rates may apply of 10%, 9%, 6%, or 4%. It is recommended to consult an accountant to decide on the choice of a bid and make a calculation.

Stage 3. Withholding income tax

Income tax is withheld when income is paid to an individual at the time of actual payment.

If income is paid to an individual several times during the month, income tax is not withheld when income is paid for the first half of the month. In such cases, the tax is withheld from an individual’s income for the entire month upon subsequent payment. This rule does not apply to the payment of vacation pay to an employee – income tax is withheld from such income directly upon payment.

Stage 4. Payment of income tax

Usually, the tax must be paid no later than the day of payment of income to an individual. Sometimes, other tax payment deadlines are provided so you can get advice from an accountant.

Transfer of information on income paid by a tax agent to the tax authorities

Tax agents must submit information on income and applied income tax benefits to the tax authorities annually. There are exceptions to this rule, the details of which can be clarified with an accountant.

The information must be submitted electronically using a special form before April 1 of the following year after the reporting calendar year.

When income tax does not need to be calculated

In some cases, when paying income to individuals, the tax agent is not required to calculate and pay income tax to the budget. Here are some examples of such cases:

1. When individuals receiving income independently pay taxes as individual entrepreneurs. We are talking about income related to the entrepreneurial activities of individuals. A copy of the certificate of state registration is usually required to determine the status of an individual entrepreneur. The data from this certificate is generally indicated in contracts concluded with individual entrepreneurs. We are talking about income related to the entrepreneurial activities of individuals. In the case of foreign entrepreneurs, it is more complex — usually, a tax of 13% is withheld from payments they receive in Belarus. However, international agreements may provide for other ways of taxation.

2. When a company acquires from an individual:

• An unfinished building on a plot of land intended to construct an apartment building, an apartment building, an apartment, a garage, a parking lot or a share in the ownership of such property.
• A car weighs no more than 3,500 kg.

3. When income paid to an individual is not taxed by Belarusian legislation. A detailed list of such incomes can be clarified in consultation with an accountant.