The Ministry of Taxes and Duties explained which loans Belarusians will have to pay income tax on

The Tax Code of Belarus stipulates that in certain cases, loans and credits obtained by individuals may be subject to personal income tax. The relevant amendments came into force on January 1, 2015. The Ministry of Taxes and Duties has clarified the circumstances under which personal income tax will have to be paid on borrowed money, reports BELTA.

This applies to loans and credits received from other individuals who are not individual entrepreneurs, from foreign organizations that do not carry out their activities in Belarus through a permanent establishment, as well as from foreign individual entrepreneurs.

However, this does not mean that you will now have to pay tax even if you borrowed money from a neighbor until payday. "Taxation applies only to those citizens who are required by the tax authorities to submit a declaration of income and property. For example, a person made expensive purchases (real estate, a car, etc.) but had a low salary or no income at all. If in the declaration of income and property, they indicate that these purchases were made with funds borrowed from another individual, then they will have to pay personal income tax on this amount," the press center of the Ministry of Taxes and Duties explained.

It is important that the declaration of income and property is submitted only by those individuals who have received a corresponding written request from the tax authority, the department emphasized. Tax authorities request declarations from those who, according to the Ministry of Taxes and Duties, live "beyond their means": they do not receive income from official sources or receive it in insignificant amounts, but at the same time purchase expensive real estate, vehicles, and carry out other financial transactions.

Personal income tax is payable within thirty days from the date of receipt of a notification from the tax authority. The tax rate is 13%.

The Ministry of Taxes and Levies has drawn attention to the fact that the Tax Code provides for the crediting or refund of income tax paid upon full repayment of loans and return of credit funds. To do this, it is necessary to submit an application and documents confirming the full repayment and return of money to the tax authority at the place of registration. Income tax will be credited or refunded within a month.

"However, when repaying (returning) loans and credits from funds received on a repayable or conditional repayable basis from individuals, income tax is not recalculated, and the tax is not subject to refund (credit)," the ministry's press center added.

A loan declared and received from a close relative is not subject to tax: this includes spouses, parents (adoptive parents), children (including adopted children), siblings, grandparents, grandchildren, as well as close relatives of a spouse.

Income tax is also not calculated on loan amounts received from Belarusian organizations and individual entrepreneurs, as well as credit funds obtained from Belarusian banks and non-bank credit and financial institutions.

Svetlana Savko