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Peculiarities of taxation of free economic
zones residents of the Republic of Belarus
At present in Belarus six free economic zones
(FEZ) exist: FEZ "Brest",
FEZ "Minsk", FEZ
"Vitebsk", FEZ "Mogilev",
FEZ "Gomel-Raton", FEZ "Grodnoinvest".
A free economic zone - is a lot of land on the
territory of Belarus with precisely appointed borders and a specific law
order, establishing more favorable conditions for economic activity for
FEZ residents.
FEZ residents' registration is performed by
FEZ administration on competition basis taking into the account the amount
of investments, the necessity to create industrial and social
infrastructure on the condition that FEZ residents are accommodated on the
FEZ territory.
FEZ resident is a legal entity or an
entrepreneur registered by FEZ administration who are liable to a special
FEZ law order that includes specific taxation order; currency, customs and
other sort of regulations.
The specific law order has restrictions. Thus,
in FEZ "Brest" gambling business, in FEZ "Minsk", "Vitebsk" and "Gomel"
trade, trade-purchase activity and public catering are not liable to it.
In FEZ "Mogilev" and "Grodnoinvest" the production and realization of
exported goods and services as well as replaceable import goods and
services experience specific law order according to the list approved by
the Government of Belarus.
According to the specific law order a
preferential taxation order exists in Free Economic Zones of Belarus. It
includes legislatively established common privileges for all the
organizations of Belarus as well as additional privileges and preferences
for FEZ residents.
So, FEZ residents (except for structural
subunits located outside FEZ) experience the following specific law order:
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Resident organizations of FEZ "Brest",
"Minsk", "Mogilev", "Grodnoinvest", "Gomel-Raton" and "Vitebsk" pay
limited taxes and non-tax payments: profit tax, value added tax, excises,
environmental tax, income tax, land tax, state and social insurance fees,
state duties and taxes.
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Income tax rates are reduced comparing to
commonly established ones (FEZ "Mogilev", "Grodnoinvest" - 12%, others -
15%).
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In FEZ "Gomel-Raton", "Minsk", "Vitebsk",
"Grognoinvest" and "Mogilev" profits for investments are not taxable.
-
Privileges with temporal restrictions such as
profit accumulated by the residents of FEZ "Brest", "Gomel-Raton",
"Minsk", "Grodnoinvest", "Mogilev" and "Vitebsk" due to the realization of
goods are duty free for a five-year period.
-
After a five-year-duty-free period FEZ "Brest"
residents that provide not less than 70% of production manufactured in FEZ
"Brest" for export purposes pay 50% from an established for FEZ residents
tax rate (7.5 %).
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Profits of foreign legal entities (that do not
perform any activity in Belarus through representatives) accumulated from
the residents of FEZ "Vitebsk", "Mogilev", "Grodnoinvest" and "Brest" from
the use or from the right to use industrial, commercial, scientific
experience on dividends and promissory notes are taxable to 5% lower duty
rate in case the international tax agreement does not provide other
conditions.
Dividends paid out by FEZ "Brest" residents are not taxable during a five
year period since the moment of registration.
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FEZ "Mogilev", "Grodnoinvest" do not pay
duties and fees to special purpose budget funds as well as to local
Council of deputes' extrabudget funds.
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The tax rate for securities income for FEZ
"Mogilev" and "Grodnoinvest" residents is reduced to 50 % from a commonly
established one.
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