Foreigners’ Dividends Proposed To Be Taxed At 25%

Dividends paid to foreigners are proposed to be taxed at a rate of 25%. The proposal is contained in the draft amendments to the Tax Code published on the National Legal Internet Portal.

Under the draft, the 25% personal income tax rate would apply to “income in the form of dividends accrued during a tax period to individuals who are foreign citizens (nationals), stateless persons, who do not permanently reside in the Republic of Belarus.”

At the same time, the tax agent would be required to calculate personal income tax on the full amount at a rate of 25%, regardless of the provisions of international tax treaties. However, an individual may provide the tax authority with confirmation that they are a resident of a state with which Belarus has a tax treaty. In this case, the tax authority would calculate the personal income tax taking into account the provisions of the relevant international treaty.

It should be noted that the draft Tax Code contains no proposals to change the income thresholds at which higher personal income tax rates apply.

Currently, a 25% rate applies to income exceeding 350,000 rubles, while a 30% rate applies to income exceeding 600,000 rubles.

The article on the procedure for calculating personal income tax for individuals is also proposed to be supplemented with provisions on applying the new procedure for calculating personal income tax if the procedure is changed.

The draft still needs to be approved by the National Assembly.