No taxes on investments and innovations in Belarus starting from 2012

Starting from 2012 investment and innovation in Belarus may not be taxed, Finance Minister of Belarus Andrei Kharkovets said at a session of the ministry.

“We suggest that investment and innovations should not be taxed starting from 2012,” the minister said.

In particular, the profit tax will not be levied on the funds which are allocated in establishing new facilities and upgrading existing plants. “When a company begins to make a profit, it will be exempt from tax until it fully recovers the costs incurred. This is the so-called mechanism of carryforward of losses. This is the basis for attracting long-term investments,” the minister said.

In terms of VAT, temporary and quantitative restrictions on tax deductions will be removed. Once investment costs are incurred, an investor will be refunded from the budget for the paid tax. As a result enterprises will have additional resources that they can use as investment. This will also lower costs of investment projects and give a real boost to investment activity.

The Finance Minister stressed that the taxation system will also provide for additional stimuli to scientific research and application of its results in industry, manufacture of high-technology products and innovative companies. In particular, profit tax will be lowered (to 10%) on the sale of national high-technology products and on innovative companies.

All this will provide an opportunity to refuse to provide numerous individual tax reliefs, because their validity is highly questionable at times and their use creates an imbalance in the competition. As the same time it does not mean that tax reliefs will be canceled altogether. Certain incentives for companies will be preserved and strengthened. The Finance Minister believes that the access to tax reliefs should be equal for all.

According to