In Belarus, equal taxation conditions have been created for the import, production, and sale of cars

April 11, Minsk /BELTA/. 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 No. 130 of April 4, 2011 "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 do 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 the vehicles, regardless of their place of acquisition and the seller's category (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 to Decree No. 175 of April 4, 2009 "On Measures to Develop Passenger Car Production" provide for exemption for car manufacturers from the calculation and payment of excise taxes on domestically produced passenger cars and automotive components and their sale in Belarus, as well as from VAT on sales of domestically produced passenger cars in Belarus. In the previously effective version, these preferences for manufacturers were absent. Also, exemption from the calculation and payment of VAT levied by tax authorities on the import of technological equipment and automotive components from the territory of the Customs Union member states for the production of passenger cars is provided. Accordingly, with the entry into force of Decree No. 130 of April 4, 2011, equal taxation conditions are established in Belarus for the sale of vehicles, both those imported into Belarus and those purchased by car dealerships from legal entities and individuals within the republic, as well as from Belarusian manufacturers. The Ministry of Taxes and Duties believes that the opinion of some individuals that car prices will rise in the republic with the entry into force of Decree No. 130 has no legislative basis. The ministry recalled that the Agreement on the Principles of Indirect Taxation in the Export and Import of Goods, Performance of Work, and Provision of Services in the Customs Union of January 25, 2008, entered into force on July 1, 2010. Its provisions stipulate the application of a zero VAT rate to exporters, including for goods that are exempt upon import in accordance with the legislation of the importing state. This norm differs from the previously effective 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 in the Export and Import of Goods, Performance of Work, and Provision of Services of September 15, 2004, according to which, in case of granting an import exemption under the legislation of the importing country, the state where the exporter is registered did not provide a zero VAT rate. Accordingly, a Russian organization selling a car to a Belarusian organization has the right to apply a zero VAT rate to goods that are exempt upon import into 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 Duties concluded. -0-