The Tax Code of the Republic of Belarus (hereinafter – the Tax Code) has been amended with provisions aimed at preventing evasion of personal income tax (hereinafter – personal income tax) by paying individuals without reflecting those payments in accounting records and financial statements.

For example, paragraph 5 of Article 216 of the Tax Code provides that if a failure to withhold (or incomplete withholding) of personal income tax is discovered, the tax agent must withhold such tax from any funds when they are actually paid to the taxpayer or on their behalf to third parties. It also sets out the procedures for the tax authority when withholding personal income tax is impossible because the taxpayer does not receive the payment in cash.

At the same time, from 1 January 2021 Article 216 of the Tax Code was supplemented by paragraph 51, which states that the withholding procedure set out in paragraph 5 of Article 216 does not apply in cases where the controlling authority determines that the tax agent has unlawfully failed to withhold and remit the tax to the budget, except for the case specified in the second part of this paragraph.

For reference: the term “unlawful failure to withhold and remit the personal income tax to the budget” is defined in Article 195 of the Tax Code.

Thus, if the tax authority determines that the tax agent has unlawfully failed to withhold personal income tax, that tax will be recovered solely from the tax agent’s funds (without subsequent withholding from the individual who actually received the income).

In light of the above, we emphasize the changes to tax legislation that came into force on 1 January 2021 regarding the procedure for withholding and remitting personal income tax.

If employees give testimonial evidence about the payment of wages “in a slip” (in a “conveyor”), the amounts specified by the individual will not be subject to withholding or payment of personal income tax – that tax will be recovered solely from the tax agent’s funds (without subsequent withholding from the individual who actually received the income).

In the event of refusing to give witness testimony, such a natural person becomes subject to tax‑authority control, and control measures will be carried out in the area of income and property declaration— a request for a declaration of income and property will be made, and an audit will be conducted to verify that the value of the property and other incurred expenses correspond to the income declared in the declaration.

Inspection of the Ministry of Finance for Stolinsky District