June 27, 2016 – The President signed Decree No. 2 “On Making Addenda and Amendments to the decrees of the President of the Republic of Belarus” (hereinafter referred to as “Decree No. 2”).
Decree No. 2 was prepared taking into account the practice of Presidential Decree No. 6 dated 7 May, 2012 “On stimulating entrepreneurial activity in medium, small towns, rural areas” (hereinafter referred to as “Decree No.6”).
1. Decree No. 2 specifies the procedure and conditions for granting tax preferences.
The purpose of it is to stimulate the creation of truly new industries, jobs, to attract additional capital and exclude cases of obtaining preferences through formal establishment of new organizations or subsidiaries on the basis of the property of operating organizations.
Therefore, amended to specify the following:
- expulsion from commercial organizations that may use tax preferences under sub-paragraph 1.1 of paragraph 1 of Decree No. 6, organizations created as a result of reorganization in the form of isolation , separation or merger, as well as organizations joined by other organizations;
- exclusion of benefits regarding activities of separate divisions of commercial organizations, if such units were created at the location of the organization that as a result of merger was attached to the mentioned business organization or the organization, as a result of its reorganization in the form of isolation, separation or merger, the mentioned commercial organization was created.
Also Decree No. 2 exclude property tax benefits in respect of the unused (used ineffectively) property, that is aimed at encouraging the involvement of such property into economic turnover.
In order to ensure equal opportunities and increase competitiveness, the tax benefits provided by Decree No. 6 will now be extended to:
- branches of organizations applying a single tax for agricultural producers, if they carry out activities which are not covered by a single tax;
- activity of enterprises-residents of free economic zones (FEZs), located in small and medium-sized towns, rural areas.
2. Decree No. 2 clarifies the conditions of release from compulsory conclusion of stock market transactions
Decree No. 2 establishes the obligation of commercial organizations (including as it relates to the activities of separate departments), as well as individual entrepreneurs subject to Decree n No. 6 to enter into stock market transactions on export of wood, classified according to the uniform trade classification of the EAEU foreign economic activity of heading 4403 in accordance with the generally established procedure. This measure is intended to prevent export of raw materials with low value added at domestic prices for processing outside the country.
At the same time the privilege for the release from compulsory stock market transactions remains regarding the exportation of own-produced goods given certificate of own production.
3. Decree No. 2 clarifies conditions for application of customs preferences
Decree No. 2 foresees the applicability of customs preferences stipulated by t Decree No. 6, only for creation of commercial organizations for formation of the statutory fund.
The rights and restrictions of the founders (participants) of commercial organizations and these commercial organizations themselves are separated. It is also specified that inception of customs clearance fees when reorganizing a business entity associated with the loss of the ownership by this organization, economic management or operational control of the goods imported with exemption from these fees. The transformation of a commercial organization is not the basis for the payment of customs duties based on the fact that in this case, a business entity continues to conduct entrepreneurial activity.
The Decree specifies conditions of the use and disposal of goods imported into the territory of the Republic of Belarus with exemption from import duties and value added tax in accordance with the first part of sub-paragraph 1.9 of paragraph 1 of Decree No. 6 until December 1st, 2013, as well as exclusion of varying interpretations of rules on the procedure and conditions for the use of customs preferences.
It is clarified that release of a commercial organization from the payment of customs duties and value added tax, provided for in the first part of sub-paragraph 1.9 of paragraph 1 of Decree No. 6 is used including the goods which were placed under the customs procedure of a customs warehouse, temporary importation or were placed in temporary storage prior to their acquisition by the founder of a business entity and (or) inclusion into the authorized fund of a business entity, or (regarding the goods imported before December 1st, 2013) belonged to a commercial organization before inclusion into its authorized fund.
4. Decree No. 2 brings the rules of Decree No. 6 in line with other legislative acts.
In order to bring Decree No. 6 in line with the third part of paragraph 1.3 of paragraph 1 of t Decree No. 64 of the President of the Republic of Belarus dated 4 February, 2014 “On car recycling tax” Decree No. 2 provides that the tax privileges regarding the activities of separate subdivisions of a commercial organization located in medium, small towns, rural areas are not applied to the recycling tax payment.
Micro lenders are included in the number of organizations that are not applied to the preferences of subparagraphs 1.1-1.3 of paragraph 1 of Decree No. 6, due to the fact that their activity in accordance with Decree No. 325 of the President of the Republic of Belarus dated 30 June, 2014 “On attracting and providing loans, on activity of micro lenders” is similar to the activities of banks, credit and financial organizations.
The name of Chinese-Belarusian Industrial Park is clarified in accordance with the provisions of Decree No. 326 of the President of the Republic of Belarus dated 30 June , 2014 “On the activity of the Chinese-Belarusian Industrial Park “Great Stone Industrial Park”, the concept of jewelry is also specified in accordance with the provisions of the fourth and twenty-third paragraphs of article 1 of the Law of the Republic of Belarus dated 21 June, 2002 “On precious metals and precious stones” (similar to the standards of subparagraph 5.1.2, paragraph 5 of article 286 of the Tax Code of Belarus).
5. Decree №2 gives the Council of Ministers of the Republic of Belarus the right to explain the issues of application of Decree 6.
Source: economy.gov.by