On 20 March 2024, the Belarusian Ministry of Taxes and Duties released Letter No. 4-2-21/00850 on March 20, 2024, addressing the tax obligations of foreign entities with permanent establishments (PEs) conducting business in the Republic of Belarus. Letter No. 4-2-21/00850 will go into effect in 2024.
The letter offers guidance regarding the scope of permanent establishments, which includes registration requirements related to activities conducted via a permanent establishment, tax filings, income tax and VAT return obligations, audit processes, and more. One key provision of this letter is the changes in the tax rate for a permanent establishment. This includes the standard 20% rate and an additional 25% tax rate which is applicable if the annual tax base surpasses BYN 25 million.
Letter No. 4-2-21/00850 replaces Letter No. 4-2-21/00759 of 10 March 2023. On 10 March 2023, the Ministry of Taxes and Duties of Belarus issued Guidance Letter No. No.4-2-21/00759 to clarify the taxation of foreign organizations operating in Belarus through permanent establishments (PEs).
