New preferential tax treatment zone to be established

Belarus: Establishment of the China-Belarus industrial park “Big Stone”

Presidential Edict No. 326 adopted on June 30, 2014 “On establishing the China-Belarus “Great stone” industrial park” has finally settled issues regarding establishment of a new preferential tax treatment zone in Belarus.

In particular, the following tax privileges are granted to Park residents:

1. Exemption from all corporate taxes for 10 years from the date of registration as a Park resident and reduction of current tax rates by 50% for the next 10 years of activities in the Park. These taxes include: income tax on profits from the sale of goods (works, services) manufactured in the Park; property tax on buildings and facilities located in the Park; land tax in respect of privately owned land located in the Park.

2.Exemption from customs duties (levies, VAT, excise duties) on goods (raw stocks, materials) for further export outside the countries of the Customs Union.

3. Full VAT deduction paid by purchase of goods (works, services, property rights) used for design, building and equipping of buildings in the Park.

4. Reduced income tax rate of 9 % for employees of Park residents (the general income tax rate is 12 %).

5. 5 % income tax rate on royalties payable by Park residents as a reward for know-how, licenses, patents, utility models to foreign companies acting without permanent establishment in Belarus (the general tax rate is 15 %).

6. Exemption from income tax on dividends payable to shareholders of Park residents for a five year term.

Moreover, Park residents are exempted from new taxes that may be established in Belarus in future (grandfather clause).

Apart from tax privileges, Park residents are granted the following benefits:

1. The right to lease (up to 99 years) or purchase land plots (the total Park area is 9150.1 ha)

2. The right to design project documentation, to build and to commission Park facilities according to the legislation of foreign countries.

3. The right to build Park facilities collaterally with the design, expertise and approval of all necessary project documentation for every building stage.

Source: National legal Internet portal of the Republic of Belarus (NLIP) 02.07.2014 1/15135

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