New version of the Tax Code introduces material amendments to transfer pricing rules.
From 1 January 2019, and pursuant to paragraph two of Article 6 of the Law of the Republic of Belarus dated 30.12.2018 No. 159-З (hereinafter, “Law 159-З”), a new version of the Belarusian Tax Code (hereinafter, “TC”) – introducing material amendments to transfer pricing (hereinafter, “TP”) rules in Belarus – took effect.
The last significant changes were made in 2016, but these did not result in extensive usage of TC controls and failed to cover a number of practical issues related to the wording of the previous text of the TC. The 2016 changes moved Belarusian TC rules considerably closer to international approaches, but preserved the 20% acceptable deviation from market prices, control over the foreign trade transactions of non-related parties, the low thresholds for controlled deals, and other peculiarities.
The new version of the TC constitutes an almost entirely new document that – in terms of TP oversight – is supplemented by Chapter 11 Principles of determining prices for goods, work (services) for taxation purposes . Article 30.1, permitting a 20% deviation from market prices, has been abolished.
The amendments covered by Law 159.З on TP oversight also affect:
In addition, the new TC introduces new TP oversight provisions taking effect from 2019, such as:
It is important to note that a government order on the forms on which TP documentation is to be filed from 2019 onwards in Belarus is still pending approval. A draft of it is on the MTL website. More details can be found in a summary previously prepared by our team.
According to the 2019 TC, the limits for treating deals as controlled have increased for all types of controlled transactions (compared to the previous version):
1Major payers include organisations having annual revenue (income) of at least 180 million Belarusian roubles and an aggregate estimated amount of tax (VAT to be refunded from the budget) exceeding 14 million Belarusian roubles.
We will be delighted to assist you with any issue related to making amendments in response to Belarusian TP laws, including:
Our KPMG team has wide practical experience of applying TP rules in various jurisdictions all over the world, including Russia, Ukraine, Kazakhstan and in other CIS states.
We will be pleased to provide detailed answers to all your questions and give you all the necessary support you need regarding your TP issues in Belarus.