Belarus

Individual - Income determination

Last reviewed - 27 January 2020

Belarus-source income includes (but is not limited to) the following:

  • Employment income received from a Belarusian company or foreign company due to the activity of its permanent establishment (PE) in Belarus.
  • Interest income received from a Belarusian company or foreign company due to the activity of its representative office or a PE in Belarus.
  • Income derived from intellectual property (IP) rights exercised in Belarus.
  • Capital gains derived from disposal of any property (with certain exceptions) located in Belarus.
  • Income from disposal on the territory of Belarus of shares or other securities, and income from disposal of shares in the statutory capital of Belarusian companies.
  • Interest from deposits held in Belarus.
  • Rental income from property located in Belarus.
  • Dividends received from a Belarusian company.
  • Pensions, scholarships, or similar payments.
  • Income derived from the use of pipelines, power lines, telecommunication facilities and other means of communication, including computer networks, in the territory of Belarus.

Employment income

Taxable earnings in cash and in kind received from the principal employer include wages, various additional payments (e.g. sickness and maternity benefits paid from social insurance funds), bonuses, incentive payments, allowances and other similar payments, compensation upon dismissal from work (e.g. compensation for unused vacation), gratuities, and compensation for unlawful dismissal from work.

Capital gains

Capital gains are included in total income of an individual taxpayer. Taxable income derived from the sale of property is calculated as the difference between the sale price and the acquisition costs plus sales expenses supported by relevant documents.

Income derived from the sale of property, excluding securities, shares in companies, real estate, and vehicles, is exempt from PIT in Belarus unless it relates to commercial activities.

Income from the sale of one house, one apartment, one building, one land plot, one garage, and one car parking space within five years and more is not taxable. Income from the sale of the second and each following immovable property object of the same type within a five-year period is fully taxable.

Income derived from the disposal of one vehicle (of technically permissible total weight not exceeding 3,500 kilograms and the number of seats, excluding the driver's seat, not exceeding eight) within a calendar year is exempted from PIT. Income from each following disposal of vehicle is subject to PIT under standard terms.

Income derived from the disposal of shares in the statutory capital of Belarusian company is exempted from PIT if the taxpayer has been in possession of these shares continuously for a period of no less than three years (applicable to shares acquired by a taxpayer since 1 January 2014).

Income derived from the sale of securities is subject to PIT in compliance with special rules established by the Tax Code.

Dividend income

No special rules apply with regard to dividend income, except lower income tax rates. PIT rates of 6% and 0% are applicable if the profits were not distributed between the shareholders (the residents of Belarus) within the previous three or five calendars years, respectively.

Interest income

Interest income on bank deposits (where a bank deposit agreement was concluded after 1 April 2016) is subject to PIT if one of the following conditions is met:

  • Term of actual allocation of monetary funds on the deposit is less than one year in Belarusian roubles and less than two years in a foreign currency.
  • Interest rate is higher than the rate under demand deposits.

Royalty income

No special rules apply with regard to royalty income.

Exempt income

The following income (among others) received from a Belarusian legal entity is also exempt from PIT:

  • Social security and social assistance benefits paid from state social insurance funds or from the Belarusian budget, excluding sickness (temporary disability) allowances.
  • Pensions.
  • Compensations of all types stipulated by the legislation, except compensation for unused vacations and compensation for depreciation of vehicles, equipment, tools, and appliances belonging to the employee.
  • Business trip expenses, within the limits established.
  • Benefits paid by an employer upon the death of close relatives of an employee, as well as benefits paid to a close relative of an employee upon the death of an employee.
  • Insurance premiums, under certain conditions (e.g. under obligatory insurance, voluntary accident insurance during trips abroad).
  • Non-employment income (including material support, gifts and prizes, payment for tours) received from the principal employer is exempted in the amount not exceeding BYN 2,115 per calendar year per each source of income. Income derived from other sources (companies and individual entrepreneurs) is exempted if it does not exceed BYN 140 per each source.
  • Income received from the principal employer in the form of payments to Belarusian insurance companies for insurance services in the amount of up to BYN 3,622 per each source during a tax period.
  • Income in the form of gifts received by taxpayers from other individuals in the total amount not exceeding BYN 7,003 from all the sources.
  • Compensation for moral damage received by the individual from Belarusian sources.
  • Foreign gratuitous aid.