From January 1, the personal income tax rates for employees of companies that are residents of the Belarusian High Technology Park were increased. They were raised from 9% to 13%, which constitutes a 44 % increase. The changes were introduced in the updated Tax Code.
An identical increase in PIT rates was introduced to companies who are residents of the Chinese-Belarusian industrial park Great Stone.
Officials in Belarus have promised that the increased rates will be in effect for two years, until January 1st of 2023. The reason for the tax rate hikes according to the Ministry of Taxes and Duties is to help consolidate the state budget revenues to combat Covid-19.
When these possible changes were discussed earlier in 2020, representatives of the IT market said that "such changes would violate the principle that has been in force in relation to the HTP over the past 15 years, namely, the immutability of legislation."
The reaction to the tax rate hikes has been received with wide criticism, and will no doubt negatively affect the climate for new foreign investments in the IT sector. According to clause 1 of the decree of the President of the Republic of Belarus dated December 21, 2017 No. 8 "On the development of the digital economy", the state guaranteed the international investment and technological community that the special legal regime of the Hi-Tech Park (including taxes) is valid until January 1, 2049. Consequently, the new change in taxation does not reflect well on the reputation of the High-Tech Park as a stable platform for investors.
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