Equal taxation conditions have been established in Belarus for the import, production, and sale of vehicles.

On April 11, Minsk /BelTA correspondent/. Equal taxation conditions have been established in Belarus for both the import and production and sale of cars within the republic. This was reported to BelTA by the Ministry of Taxes and Duties of Belarus, commenting on Decree No. 130 of April 4, 2011. "The adoption of Decree of the President of Belarus of April 4, 2011 No. 130 "On Amendments and Additions to Certain Decrees of the President of the Republic of Belarus" is aimed at establishing equal taxation conditions for both the import and production and sale of cars within the Republic of Belarus," the ministry noted. In particular, it was explained that amendments and additions to Decree No. 546 of November 24, 2005 "On Certain Issues of Taxation of Goods Moved Across the Customs Border of the Republic of Belarus" provide for exemption from VAT and excise taxes on car imports, regardless of the country of import (the aforementioned preferences did not apply to vehicles imported from the territory of the Russian Federation). In this case, the tax base for value added tax on the sale of vehicles by legal entities and individual entrepreneurs is determined as the difference between the sale price and the purchase price of vehicles, regardless of their place of purchase and the category of the seller (i.e., they can be either individuals or legal entities). Previously, this preference applied only to persons selling cars imported by them into Belarus in accordance with Decree No. 546. Amendments and additions made to Decree No. 175 of April 4, 2009 "On Measures for the Development of Passenger Car Production" provide for exemption for car manufacturers from the calculation and payment of excise taxes on volumes of manufactured passenger cars and self-produced auto components and their sale in Belarus, as well as from VAT on turnover from the sale of passenger cars manufactured by them in Belarus. In the previously effective version, these preferences for manufacturers were absent. Exemption from the calculation and payment of VAT levied by tax authorities on the import of technological equipment and auto components from the territory of the member states of the Customs Union for the production of passenger cars is also provided for.

Correspondingly, with the entry into force of Decree No. 130 of 4 April 2011, equal taxation conditions are being created in Belarus for the sale of vehicles, both those imported into the territory of Belarus and those acquired by car dealerships from legal entities and individuals within the republic, as well as from Belarusian manufacturers.

The Ministry of Taxes and Levies believes that the opinion of certain individuals that prices for passenger cars will rise in the republic with the entry into force of Decree No. 130 has no legislative basis.

The ministry recalled that on 1 July 2010, the Agreement on the Principles of Indirect Taxation when Exporting and Importing Goods, Performing Works, and Rendering Services within the Customs Union of 25 January 2008 entered into force. Its provisions stipulate the application of a zero VAT rate to the exporter, including for goods exempted upon import in accordance with the legislation of the importing state.

This norm differs from the previously applicable Article 2 of the Agreement between the Government of the Russian Federation and the Government of the Republic of Belarus on the Principles of Indirect Taxation when Exporting and Importing Goods, Performing Works, and Rendering Services of 15 September 2004, according to which, in the event of an import concession under the legislation of the importing country, the state where the exporter is registered did not provide a zero VAT rate.

Correspondingly, a Russian organisation selling a car to a Belarusian organisation is entitled to apply a zero VAT rate to goods that are subject to concessions upon import into the territory of Belarus, including on the basis of Decree No. 130.

"Thus, there are all prerequisites for reducing the price (in terms of the tax component) of passenger cars sold, including because the tax base for value added tax in such cases is determined not on the entire turnover, but on the difference between the sale price and the purchase price," the Ministry of Taxes and Levies concluded. -0-

BELTA