Belarus -- Cryptocurrency Tax Framework Regulatory Overview

Belarus has a unique and generally favorable tax regime for cryptocurrency and virtual assets, primarily established by Presidential Decree No. 8 of December 21, 2017, "On the Development of the Digital Economy" (referred to as Decree No. 8), which was later extended. This decree aimed to foster the IT sector and attract investment in blockchain technologies.

Here's a breakdown of the tax treatment:

Crypto-Specific Tax Legislation

The cornerstone of cryptocurrency taxation in Belarus is Presidential Decree No. 8 "On the Development of the Digital Economy". This decree, originally effective until January 1, 2023, established a special legal and tax regime for the Hi-Tech Park (HTP) residents and individuals dealing with tokens.

In February 2023, Decree No. 8 was extended by Decree No. 1 "On the Further Development of the Digital Economy" (or amendments to Decree No. 8), which prolonged the existing tax benefits until January 1, 2028.

Tax Treatment Breakdown

1. Capital Gains Tax Rates / Income Tax on Crypto (Individuals)

• Exemption until January 1, 2028: For individuals, income derived from mining, acquisition (including purchase, exchange), alienation (including sale, exchange, donation), and inheritance of "tokens" (which include cryptocurrencies, utility tokens, and security tokens as defined by Decree No. 8) is exempt from personal income tax.
• This means that individuals making profits from trading, selling, exchanging, or even inheriting crypto do not pay capital gains tax or personal income tax on these gains in Belarus until the specified date.

2. Income Tax on Crypto (Businesses/Legal Entities)

• HTP Residents:
  • Legal entities that are residents of the Hi-Tech Park (HTP) benefit from significant tax incentives related to crypto activities.
  • Profits from activities related to the creation, acquisition, and alienation of tokens (including mining, exchange operations, and other crypto-related services) are exempt from corporate income tax until January 1, 2028.
  • HTP residents also enjoy other benefits, such as reduced social security contributions for employees and certain VAT exemptions on services rendered to foreign customers.
• Non-HTP Businesses:
  • Businesses in Belarus that are not HTP residents and engage in crypto-related activities would generally be subject to standard corporate income tax rates on their profits from such activities.
  • The standard corporate income tax rate in Belarus is generally 18%.

3. VAT/GST Treatment

• Exemption until January 1, 2028: Operations involving the alienation (transfer) of tokens are exempt from Value Added Tax (VAT) until January 1, 2028. This applies to both individuals and HTP resident legal entities engaging in such operations.
• This means that the sale or exchange of cryptocurrencies is not subject to VAT in Belarus for the specified period.
• Services provided by HTP residents related to crypto, especially to non-residents of Belarus, may also fall under VAT exemptions or a zero-rate VAT regime.

4. Reporting Requirements

• Individuals: Due to the broad tax exemption for individuals, there are generally no specific tax reporting requirements for crypto transactions for tax purposes in Belarus until January 1, 2028. However, individuals are still subject to general financial monitoring and anti-money laundering (AML) laws for large transactions through banks or regulated crypto exchanges.
• Businesses (HTP Residents): While enjoying tax exemptions, HTP residents still have general accounting, financial reporting, and regulatory obligations. They must maintain proper records of their crypto assets and transactions for internal purposes, audits, and compliance with HTP regulations and AML/CFT laws.
• Non-HTP Businesses: If a non-HTP business engages in crypto activities and is subject to corporate income tax, it would need to report its crypto-related income, gains, and losses as part of its regular corporate tax returns, adhering to standard accounting principles for digital assets.

5. Other Key Aspects

• Legal Status of Tokens: Decree No. 8 legally defined "tokens" and established the framework for their circulation, including smart contracts, mining, crypto exchanges, and initial coin offerings (ICOs).
• Foreign Currency Control: Crypto transactions are generally exempt from foreign currency control regulations applicable to traditional financial transactions, simplifying international operations.

Specific Tax Authority References with URLs

1. Ministry of Taxes and Duties of the Republic of Belarus (Official Tax Authority):

   • While specific English-language pages directly addressing crypto tax might be hard to find, the official website is: https://www.nalog.gov.by/

2. Presidential Decree No. 8 "On the Development of the Digital Economy" (Original):

   • The full text of Belarusian legal acts is typically found on the National Legal Internet Portal of the Republic of Belarus. An English summary or reference often found on legal firm websites is more accessible for non-Russian speakers.
   • Official source (in Russian/Belarusian): You can usually search for "Указ № 8 от 21 декабря 2017 г." on the portal: https://pravo.by/
   • Note: Finding a direct, officially translated English version on a government site can be challenging. Reputable legal firms often provide summaries and analysis.

3. Hi-Tech Park (HTP) Official Website:

   • The HTP is central to Belarus's digital economy strategy and its website provides information on residency and benefits.
   • Website: https://www.park.by/ (Available in English)

4. Decree No. 1 "On the Further Development of the Digital Economy" (2023 Extension):

   • This decree extended the benefits of Decree No. 8. Like Decree No. 8, the official text is on pravo.by. Search for "Указ № 1 от 14 февраля 2023 г."
   • Note: The key is that this decree amended and extended the validity of Decree No. 8's provisions.

Important Disclaimer: Tax laws are subject to change, and specific situations may require professional advice. This information is for general guidance only and should not be considered tax advice. Always consult with a qualified tax professional for advice tailored to your circumstances.