Accounting & TAXATION
Accounting and Payroll in Belarus
Accounting and payroll in Belarus are legally much the same as in more developed European markets, but in practice a lot of nuances have to be taken into account. The accounting practices in Belarus are governed by the Law on Accounting and reporting
, adopted in 2013.
The fiscal year begins on January 1st and ends on December 31st, i.e. it is always the calendar year. As in other CIS countries, the accounting and payroll program 1C dominates the market and finding accountants with skills to use other programs can be difficult. Currently there is a push going on to adopt IFRS standards in Belarus
What are the controlling institutions?
The regulatory body for accounting is the Ministry of Finance. For tax payments, companies are controlled by the Ministry of Taxes and Duties. Payroll taxation and employees' rights are monitored by the Ministry of Labor and Social Protection.Tax rates in Belarus:
Corporate income tax - 18 %
VAT - 20 %
Social security contributions (payroll tax) - 34 %
Personal income tax - 12 %
Capital gains tax - None
These are the basic tax rates that apply to normal companies and people in Belarus. Companies should always consider if they are eligible to work in some of the regional tax-exempt zones
or for example the High-Tech Park, where considerable tax breaks are available for foreign investors.
In Belarus, special economic zones
are areas with special legal status and various economic benefits designed to bring Russian and foreign companies into sectors that are considered as a priority in the Belarusian economy. Examples of SEZs are the Belarus High-Technology Park and the Great Stone industrial park. Companies enjoying the tax benefits of HTP can be located anywhere in Belarus. Production companies working in Great Stone need to be located within the park limits near the Minsk international airport. For more information about taxation in these zones, contact us.
Interesting facts about accounting and payroll in
Physical paper accounting documentation is still a mandatory thing in Belarus. This creates extra work for accountants, who need to be able to manage and store sometimes very large quantities of paper documents. If outsourcing is used, then the exchange of documents between client and service provider needs to be arranged in a systematic way. The company stamp is no longer compulsory, however many organizations still opt to use it. Even though the law no longer requires a company stamp, it is sometimes easier to just use it than to try explaining this to some of the representatives of the local bureaucracy.
Belarusian law forbids foreign organizations to conduct business within the Belarusian borders without having being incorporated in the form of an LLC, representative office or other body. This creates a challenge to payroll companies who would like to provide Employer of Record services in the market. Outstaffing agencies such as in Europe are not found in Belarus due to this law.
How often do I have to report?
Tax reports every month, for majority of companies also quarterly, and annual report once per year. The quarterly and annual reports include the balance sheet, income statement, cash flow statement, and a statement of possible changes in shareholder equity. Annual reporting for the previous year is due on the 31st of March.
How often will the government audit me?
On average, companies are audited by the government
once per four years. However this depends very much on each case. With new companies, usually there will be no audits in the first three years of operating.
Companies have to organize an external audit if they made over 5 million EUR turnover in the previous reporting year, or if they fall within certain specific categories of companies.
Are tax authorities strict regarding the
Accounting and Payroll regulations?
Yes, they are - sometimes even brutal. This is a fact that companies operating in Belarus have to take into account. Many minute details have to be taken into account when doing accounting, as it is very easy to break the rules. A professional and accurate accountant is the best way to minimize risks when it comes to government audits and checks.