Indirect tax snapshot
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Value Added Tax (VAT) is the main type of indirect taxation in the Republic of Belarus.
It is a tax on consumption which is applied during the production and distribution process to most goods and services. It is also applied to goods, and certain services, importing to the country. Although VAT is ultimately borne by the consumer by being included in the price paid, the responsibility for charging, collecting and paying it to the tax authority at each stage of the process rests with the business making the supply ie the sale.
A business registered for the tax will charge VAT (output tax) on its sales and incur VAT (input tax) on its purchases (including any VAT paid at importation). The difference between the output tax and the deductible input tax in each accounting period will be the amount of VAT payable by the business to the tax authority. In certain cases, a refund can be claimed.
A transaction is within the scope of VAT of the Republic of Belarus if the following conditions are met:
- the sale of goods from the territory of the Republic of Belarus or certain services
- the import of goods into the territory of the Republic of Belarus
- the purchase of certain services from foreign organizations not operating in the territory of the Republic of Belarus
- the transaction is made by a taxable person. For these purposes, a taxable person is a legal entity, an individual entrepreneur, a trustee, an individual (upon import)
There are four rates of VAT that are applied to goods and services in the Republic of Belarus: the standard rate, the reduced rate, the increased rate and the zero rate. In addition, some goods and services are exempted from the tax.
Businesses that make exempt supplies are unable to claim all of the input tax that they incur, so the VAT paid to suppliers will be a “real” cost.
Most goods imported into the Republic of Belarus are subject to VAT.
Foreign organizations, when selling services to individuals in electronic form, the place of sale of which is the territory of the Republic of Belarus, calculate and pay value added tax, submit a tax return (computation) to the tax authority of the Republic of Belarus.
The amount of value added tax calculated by a foreign organization when selling services in electronic form to individuals, the amount of value added tax presented to it when acquiring (paid when importing into the territory of the Republic of Belarus) goods (works, services), property rights are not deductible and do not reduce VAT amount.
A calendar quarter is recognized as a tax period, tax returns are submitted no later than the 20th day of the month following the quarter to the Inspectorate of the Ministry of Taxes and Levies for Minsk.
Registration is made with the Inspectorate of the Ministry of Taxes and Levies for Minsk in electronic form through the unified portal of electronic services before the expiration of the quarter when the object of taxation with value added tax has arisen.
VAT returns when selling on the territory of the Republic of Belarus are submitted quarterly or monthly as selected by the payer. Certain categories of payers must monthly submit VAT tax returns: payers who sell telecommunication services.
In respect of importation, payers submit tax returns monthly.
All VAT returns must be submitted within 20 days after the end of the relevant reporting period, together with any taxes payable. VAT returns must be submitted electronically. VAT on importation is paid no later than 20 days after the end of the reporting period, i.e. a month, when selling on the territory of the Republic of Belarus – no later than 22 days after the end of the reporting period (month or quarter).
Late payment penalty may be imposed by the tax authority if VAT returns are not submitted on time, or the related tax is not paid by the due date.
When importing goods from the countries that are members of the Eurasian Economic Union, in addition to the tax declaration, an application for the import and payment of indirect taxes, as well as copies of documents confirming the receipt of goods, is submitted to the tax authority.
Also, with such importation, statistical declarations are submitted to the customs.
In addition, all VAT payers issue electronic invoices that contain information about dispatches, recipients, name of goods, their quantity, cost, etc.
Yes. A range of penalties can be imposed where businesses do not comply with the VAT rules.
Civil penalties and interest can be applied for errors and omissions made on tax returns, or where the tax is paid late. Penalties can also be applied where the business has failed to maintain adequate records, provide information (including additional declarations), or makes repeated mistakes.
Criminal proceedings may be brought in the case of more serious matters.
In addition to execution of documents on hard copies or in the form of an electronic document when dispatching goods, rendering services, VAT payers must issue an electronic VAT invoice (hereinafter – electronic invoice).
VAT invoice consists of six sections:
- section 1 “General section”;
- section 2 “Supplier’s details”;
- section 3 “Recipient’s details”;
- section 4 “Details of the consignor and consignee”;
- section 5 “Terms of delivery”;
- section 6 “Data on goods (works, services), property rights”.
Section 1 “General section” contains: the number, the date of the electronic invoice, the date of the transaction, the type of the electronic invoice, a link to the original electronic invoice (if necessary), the date of cancellation (if necessary).
Section 2 “Supplier’s details” contains: the status of the supplier, the corresponding characteristics depending on the nature of the transaction (if necessary), the registration number, the name of the supplier, their address.
Section 3 “Recipient’s details” contains: the status of the recipient, the corresponding characteristics depending on the nature of the transaction (if necessary), the registration number, the name of the supplier, their address.
Section 4 “Details of the consignor and consignee” contains: registration numbers and names of the consignor and consignee, shipping and delivery addresses.
Section 5 “Terms of delivery” contains: the date and number of the contract, additional information (if necessary).
Section 6 “Data on goods (works, services), property rights” contains: name, CCЕA code/ TNVED (Customs Commodity Code), unit of measurement, quantity, unit price, cost VAT exclusive, VAT rate, VAT amountcost
VAT inclusive, additional data (if necessary).
Electronic invoices must contain the same information as documents in hard copies.
VAT tax returns must be submitted in electronic form.
Electronic document flow of electronic invoices between sellers and buyers is carried out using the Electronic Invoices Portal, which is an information resource of the Ministry of Taxes and Levies. An electronic invoice in accordance with the form and format established by the Ministry of Taxes and Levies is created by the payer directly on the Portal or uploaded as an XML file prepared by the payer.
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