Wednesday, 13 April 2016

Belarus: Changes to tax code affect multinationals

Amendments to the Belarus tax code that became effective on 1 January 2016 include changes relating to permanent establishments (PEs), the withholding tax on interest paid to nonresident entities, the definition of beneficial ownership and the transfer pricing rules.

Permanent establishment
The definition of a PE of a foreign entity has been amended to provide that a foreign company will be deemed to have a PE in Belarus if it carries out activities in Belarus for a period of at least 90 days, continuously or in the aggregate, in any 12-month period beginning or ending in the relevant tax period (previously, the determination was made on a calendar-year basis).

The rules for calculating expenses that may be deducted from the profits of a PE for Belarusian corporate income tax purposes also have changed. The new rules provide that both operating and nonoperating expenses incurred abroad (previously, only operating expenses were taken into account) may be deducted, provided the expenses are deductible under the Belarusian tax rules and the accuracy of the expenses (type, amount, dates) is confirmed by a foreign auditor.

Source & more info: Deloitte & TP Alert