New restrictive measures

Dear clients and partners,

We would like to inform you that the Resolution of the Council of Ministers of the Republic of Belarus No. 164 (hereinafter – the “Resolution”) has been officially published. The new Resolution sets out new restrictions with respect to the businesses from “unfriendly countries”.

The “unfriendly countries” comprise the ones as follows:

• EU member states;
• USA;
• UK;
• Switzerland;
• Norway;
• Liechtenstein ;
• Canada;
• New Zealand;
• Albania;
• Iceland;
• Montenegro;
• North Macedonia;
• Australia. ?

The new restrictions cover taxation of the incomes as follows:

• Dividends;
• Interests;
• Disposal of assets. ?

Still, based on the content of the Resolution it does not implement whatever restrictions with respect to royalties.

Dividends

As from April 1, 2024 the rate of a tax on income of foreign companies from the “unfriendly countries” which do not exercise activities in Belarus via permanent establishment (“WHT”) with respect to dividends shall amount to 25 % instead of the standard rate of 15 %. ?

As from June 1, 2024 the provisions of the Double taxation treaties (the “Treaties”) with the “unfriendly countries”, which stipulate incentive WHT rates for dividends, shall be suspended. ?

Therefore, when it comes to payment of dividends towards shareholders, being the companies from the “unfriendly countries”:

• Until June 1, 2024 – the provisions of the respective Treaty can be applied, thus the dividends can be subject to ongoing WHT rates; ?
• As from June 1, 2024 – dividends shall be subject to WHT at the rate of 25 %.

Interests

The provisions of the Treaties with the “unfriendly countries”, which provide for incentive WHT rates with respect to incomes out of debt obligations (e.g. interests accrued under loans), shall be suspended. ?

Thus, by default, as from June 1, 2024 when it comes to payment of interests towards the companies from the “unfriendly countries” the standard WHT rate of 10 % shall be applied.

Disposal of assets

As from June 1, 2024 by default the incomes of residents from the “unfriendly countries” out of disposal of shares, stocks, other movable assets as well as real estate in Belarus shall be subject to WHT in Belarus. ?

Please consider that the said restrictions are of a temporary nature and shall be applied up to December 31, 2026. Upon resolution of the Government the restrictions can be lifted prematurely. ?