Page 1

Belarus | News Digest LEGISLATION BUSINESS REGULATIONS ECONOMY COMPANIES

October 2012

Minsk Office: Kuybysheva 16, 4th floor 220029 Minsk, Belarus Tel / fax: +375 17 209 44 83 | 204 86 72 Cell: +375 29 340 44 83 | 33 300 44 83 E-mail: info@spplaw.by www.spplaw.by

Moscow Office: Skakovaya 32, building 2, office 20-1 125040, Moscow, Russian Federation Tel / fax: +7 495 945 96 51 Tel: +7 963 920 91 50 E-mail: info@spplaw.ru www.spplaw.by


LEGISLATION >> Belarusian MPs pass amendments on Tax Free 08/10/2012 URL: http://news.belta.by/en/news/econom?id=695243 The House of Representatives of the National Assembly of Belarus has adopted a draft law on amendments and additions to the Tax Code in the second hearing. Amendments to the Tax Code The amendments enforce the Tax Free mechanism, i.e. reimbursement foresee implementation of Tax for VAT on goods foreign citizens purchase in specialized stores on the Free and changes to the Belarusian territory. simplified taxation system. The draft law also provides for lower tax rates for economic operators using the simplified taxation system (5% instead of 7% without paying VAT and 3% instead of 5% with VAT). The workforce limit will also be revised to allow 50 employees instead of 15. >> A black list of companies and entrepreneurs will be published in Belarus 24/10/2012 URL: http://telegraf.by/en/2012/10/v-belarusi-poyavitsya-chernii-spisok-firm-i-ip A list of commercial organizations and self-employed entrepreneurs bearing high risk of economical violations will be created in Belarus. On October 23 the President Alexander Lukashenko signed a Decree No. 488 on “Measures preventing illegal minimization of sums under tax obligations". The list will include the information about enterprises, which activity was found pseudo-operational by the court or the bank accounts or forms of which were used for illegal purposes. Also receiving income and not filling tax returns within two accounting periods afterwards, or filing these tax returns without income indication will be considered reasons for entering the list. In total the Decree provides five comprehensive reasons allowing to put an enterprise in the list. According to the Decree, an enterprise will be informed prior to entering its data in the list. Following the remedy of defaults the business reputation of an enterprise will be restored. The list will be available on the official website of the Ministry of Taxes and Duties. The Decree enters into force on January 1, 2013.

BUSINESS REGULATIONS >> Belarus to upgrade taxation of gambling business 09/10/2012 URL: http://news.belta.by/en/news/econom?id=695400 The tax system which is currently applicable in this business in the country is based on the flat rate. This system is "not fair" because it does not take into account the real revenues of many entities. One of the ways

2 | Stepanovski, Papakul & Partners


to achieve this objective is transition to the combined taxation which combines the flat tax and a certain percentage on the turnover of the gambling business. “If we want to switch over to such a system, we need to create the conditions to prevent the cover-up of these turnovers. Before we introduced the flat tax, when taxation entirely depended on the revenue of business entities, many of them concealed their revenues. After the introduction of the flat tax, the tax revenue from this sector increased significantly,� said Vladimir Mukevich - Head of Directorate for excise goods, gambling and sales electronic systems of the Ministry on Taxes and Duties. Vladimir Mukvich believes that once this issue is addressed, there will be an opportunity to develop a special computer system in the country to monitor the gambling business. A trial system has already been developed. It connects nearly 1,000 gambling machines. This experience will be used to set up a full-fledged system. It is expected it will be put into operation next year and will cover all the gambling tables, machines and betting offices. >> Central banks of Belarus and Russia to share information about foreign trade contracts of residents 29/10/2012 URL: http://news.belta.by/en/news/econom?id=697397 Central banks of Belarus and Russia will share information about international contracts that have been signed by residents of the two countries. The agreement was reached at a session of the Interbank Currency Council of the central banks of Belarus and Russia in Veliky Novgorod, Russia.

ECONOMY >> President of Belarus signs drafts of conventions with Singapore and Bangladesh 09/10/2012 URL: http://www.president.gov.by/en/press140249.html#doc Alexander Lukashenko has approved the draft convention between the Government of the Republic of Belarus and the Government of the Republic of Singapore for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and property (capital) as Belarus will start negotiations on signing a basis for further talks. Treaties on avoidance of double taxation with Singapore and Bangladesh. Alexander Lukashenko has signed another decree to approve the draft of the similar intergovernmental convention with the People's Republic of Bangladesh as a basis for further talks. >> Over 30 legal entities join Gambling Business Association in Belarus 09/10/2012 URL: http://news.belta.by/en/news/econom?id=695390 Belarus has created the Gambling Business Association, which has brought together more than 30 legal entities of the gambling industry of the country. The main objectives of the association are to promote the civilized development of the gambling business in the country, adopt the measures to promote the establishment of the gaming industry as a branch of the 3 | Stepanovski, Papakul & Partners


national economy. The association also plans to take an active part in the development of legislative and other regulatory acts in gambling business. >> 128 investment projects underway in Minsk 17/10/2012 URL: http://news.belta.by/en/news/econom?id=696260 A total of 128 big investment projects worth of more than USD3.7 billion are currently underway in the Belarusian capital. 66 of them are implemented with the help of foreign investment. The most attractive areas are construction of multifunctional centres, hotels, trading centres. Eleven projects worth of USD40 million have been completed. Many more will be implemented by the 2014 IIHF World Championship. >> Belstat: per capita income amounted to around $300 17/10/2012 URL: http://telegraf.by/en/2012/10/belstat-dohodi-na-dushu-naseleniya-sostavili-okolo-300-dollarov In January-August the total income of the population in Belarus amounted to BRL194.2 trillion as the National Statistical Committee informed. Money income per capita per month amounted to BRL2.57 million. As for the structure of the money income, 65% is the share of remuneration of labour, 10.5% - incomes from entrepreneurship and from other profitable activity, 20% - transfers to the population (pension, subsidies, scholarship and etc.), 4.5% - incomes from property and other incomes. >> State Concern Bellegprom designs e-trading platform to promote exports 22/10/2012 URL: http://news.belta.by/en/news/econom?id=696710 Bellegprom in partnership with the UNDP is designing an electronic trading platform for promotion of light industrial goods to foreign markets. The e-trading platform concept is currently under development. The pilot project will be launched in the second quarter of 2013. Creating the trading platform is the second phase in the implementation of international technical assistance project “Improvement of foreign economic activities in the Republic of Belarus.” the UNDB is the donor of technical assistance. >> Belarus went up in the world rating “Doing Business-2013”

23/10/2012 URL: http://telegraf.by/en/2012/10/belarus-podnyalas-v-mirovom-reitinge-vedenie-biznesa-2013-na-58-emesto

Belarus ranked 58th among 185 countries in the report “Doing Business 2013: Smarter Regulations for Small and Medium-Size Enterprises” by the International Financial Corporation of the World Bank Group. Last year Belarus moved from the 69th position to the 60th, and now it has moved up by two more positions. Last year rating was reviewed due to the update of the data as well as due to two more countries, 4 | Stepanovski, Papakul & Partners

Belarus ranked 58th among 185 countries in the report “Doing Business 2013” and is in top 10 countries, which have reached significant improvement in terms of doing business since 2005.


Malta and Barbados, entering the rating. Belarus also entered top ten of the improver countries, which have reached significant improvement in terms of doing business since 2005. Compared to its partners from the Customs Union and the CIS, Belarus falls behind Kazakhstan (49th) but is ahead of Russia (112th) and Ukraine (137th). Belarus has improved its positions in five out of ten categories (indexes): in “Paying Taxes” category it moved from 158th to 129th position; in “Dealing with construction permits” – from 42nd to 30th; in “Getting electricity” – from 173rd to 171st. Belarus’s positions have not changed in the categories “Starting a business” and “Registering property” with 9th and 3rd positions respectively. Belarus went down in “Getting credit” from 97th down to 104th, in “Protecting investors” from 79th down to 82nd, in "Resolving insolvency” from 42nd down to 56th, as compared to the last year Chinese investments report. in Belarus total up to USD 5.5 billion. The experts of the International Financial Corporation of the World Bank Group noted that in Belarus there have been two positive reforms within the taxation and resolving insolvency areas. The country has also improved the insolvency procedure. At the same time Belarus has complicated the starting a business procedure having increased the cost of business registration and corporate seal manufacturing, as noted by the experts. >> President instructs the Government to manage stock companies it co-owns more efficiently 25/10/2012 URLs: http://naviny.by/rubrics/english/2012/10/25/ic_articles_259_179687; http://telegraf.by/en/2012/10/luka shenko-rasskazal-chinovnikam-kak-upravlyat-predpriyatiyami Alyaksandr Lukashenka expressed his belief that companies co-owned by the government must be profitable but at the same time work for the benefit of the entire country instead of limiting their activity to "narrow corporate interests." The Belarusian leader also warned against copying Western practices and suggested turning to China's experience instead. Mr. Lukashenka reportedly criticized the performance of supervisory boards at stock companies for doing little and leaving all major decisions for the chief executive officers to make. He cited the operation of leading confectionary producers Kamunarka and Spartak as examples. Earlier this month, Mr. Lukashenka ordered to dissolve the supervisory boards of these companies and the government given a controlling stake in them in what became their de facto nationalization. The government holds stakes in 1,738 stock companies and has a representative in each of their supervisory boards. >> China funding over 20 investment projects in Belarus

30/10/2012 URL: http://www.government.by/en/content/4666; http://news.belta.by/en/news/econom?id=697467

Today, the total amount of credit support from China for investment projects in Belarus stands at about USD 5.5 billion. A number of joint projects that started 3 to 5 years ago have been completed. In particular, these are the projects on construction of two cement factories in Grodno and Mogilev Oblasts, projects to build two 400MW units at Bereza and Lukoml state district power plants, to construct the Vitebsk 5 | Stepanovski, Papakul & Partners


hydroelectric power plant, a cement plant in Krichev, electrification of two sections of the Belarusian railways, supply of electric freight locomotive. New projects were launched last year. Among them are the projects to construct road on the Zhlobin-Gomel highway, a bleached pulp plant.

COMPANIES >> Belarusian Horizont unveils IPO plans 01/10/2012 URL: http://news.belta.by/en/news/econom?id=694690 The Belarusian holding company Horizont has plans for an initial public offering (IPO). In order to get to international stock exchanges, it is necessary to submit reports compliant with International Financial Reporting Standards (IFRS) and Horizont has been doing it for a year only. >> Belarus terminates investment contract with Iranian Azarab Industries 02/10/2012 URL: http://news.belta.by/en/news/econom?id=694813 Belarus has terminated the investment contract with the Iranian company Azarab Industries. The investment project envisaged the construction and operation of a cement mill in Vetka District, Gomel Oblast using the chalk deposits Podkamenye and Shirokoye in the same district as the source of raw materials. The designed output capacity of the cement mill was estimated at 1 million tons of cement. The required capital investments were estimated to be at least USD200 million. However, the investor has failed to start working on the project. >> MTS sales price and terms remain unchanged 31/10/2012 URL: http://news.belta.by/en/news/econom?id=697630 The price and terms of the sale of the government-owned stake in communications services provider MTS remain the same, Deputy Prime Minister of Belarus Anatoly Kalinin said while commenting on the MTS presale presentation. The auction of the government stake in COOO MTS is scheduled for 2 November. Invitations to attend the pre-sale presentation have been sent to 45 companies including major telecom operators working on the telecommunications market of the CIS and foreign countries. Last year Belarus hosted a similar presentation. Partaking in it were companies from Russia, Europe, Asia and the Middle East. The government offers its 51% stake for $1 billion. The Belarusian-Russian limited liability company Mobile TeleSystems (MTS) has been providing GSM 900/1800 mobile communication services in Belarus since 2002. UMTS-based services have been available since 2010. The founders are the Belarusian landline communication monopoly Beltelecom (51% of the registered capital) and the Russian mobile company Mobile TeleSystems (49%).

6 | Stepanovski, Papakul & Partners


CORPORATE LAW PRACTICE Maksim Kosachev | m.kosachev@spplaw.by TAX LAW PRACTICE Elena Sapego | e.sapego@spplaw.by COMMERCIAL LAW PRACTICE Tatiana Ignatovskaya | t.ignatovskaya@spplaw.by LITIGATION PRACTICE Andrey Vashkevich | a.vashkevich@spplaw.by MOSCOW OFFICE Anna Abakshina | a.abakshina@spplaw.ru

7 | Stepanovski, Papakul & Partners

SPP_Belarus_News Digest_Oct 2012_eng  

SPP_Belarus_News Digest_Oct 2012

Read more
Read more
Similar to
Popular now
Just for you