Starting from 1 January 2018 so-called “Google tax” will be introduced in Belarus. It means that foreign companies rendering electronic services to Belarus residents will be obliged to register with the tax authorities and pay VAT.
BelarusFeed compiled a list of key facts you should know about the new tax.
What is Google Tax?
The term appeared after several countries subjected foreign big tech companies delivering e-services to VAT.
However, the tax is not limited by VAT, its concept is aimed at preventing tax evasion by IT-comapnies.
What are e-services?
E-services are services of a foreign company rendered through the Internet with the use of information technologies.
- transfer of rights to use software (including computer games) and databases, electronic content (music, audiovisual works, e-books and other electronic publications, graphics) on the Internet;
- advertising services on the Internet;
- services on searching and/or provision of data on prospective clients to the customer;
- services on provision of a real-time trading platform on the Internet;
- storage and processing of data when the data provider has access to data via the Internet;
- provision of domain names and hosting services;
- provision of access to search engines on the Internet.
Who will pay?
If a foreign company meets all the conditions below it will be obliged to pay VAT in Belarus:
- the company renders electronic services;
- lace of supply of e-services is Belarus;
- e-services are rendered to consumers residing in Belarus.
What to do?
For fulfillment of VAT obligations foreign companies must register with the Ministry of Tax and Duties.
After registration the company should send VAT return declarations via tax-payer account on a quartely basis.
How to calculate VAT?
E-services will be subject to 20% VAT. Tax base of e-services will be equal to value of the services with VAT.
VAT on e-services will be calculated as follows: (VAT base * VAT rate) / 120.
In other words, VAT on e-services can be calculated through multiplying price of e-services by 16,67%.