New benefits for Belarus Hi-Tech Park residents from 2018

New benefits for Belarus Hi-Tech Park residents from 2018

The Belarusian President has signed the decree On Digital Economy, dubbed the Decree on Hi-Tech Park 2.0 (HTP). Existing benefits for the HTP are extended, while software product companies received new benefits.

The decree extends the existing benefits for HTP residents, in particular:

- the reduced rate of income tax (9%), payments to the Social Protection Fund (FSZN in Russian) are now calculated based on the average salary in Belarus, but not on the actual one;

- exemption from income tax and VAT (as a general rule); instead, HTP residents pay 1% of gross proceeds in favor of the HTP administration.

Also, the decree provides for new benefits designed to stimulate product companies to work in the HTP.

In particular, this applies for advertising and marketing costs:

- exemption from VAT of a non-resident providing marketing, advertising, consulting and some other services;

- the tax rate for income of foreign organizations that do not work in Belarus through a permanent establishment, is now set at a rate of 0% when it comes to a number of categories of income received from Belarusian sources.

The absence of these benefits actually prevented product companies from conducting IT business in Belarus, in particular, to purchase advertising, for example, from Google or Facebook.

Subsidiary liability in HTP has been abolished.

The decree provides that in case of bankruptcy of an HTP resident subsidiary liability for the obligations of such legal entity cannot rest with the owner of his property, founders or other persons, including the head, except for cases when bankruptcy is caused by actions of such persons, entailing their involvement in criminal responsibility.