Cryptocurrency taxation in Belarus: development of digital technologies in the country?
On March 28, 2018, the Decree On the digital economy development came into effect in Belarus. It is a presidential decree on improving the conditions for the development of high technology. One of the provisions of the act is the creation of a basis for cryptocurrency turnover and the development of blockchain projects. Let’s figure out how digital assets are currently regulated and what steps are being taken to develop blockchain in Belarus.
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According to the resolution, until January 1, 2023, private investors have the right to carry out any transactions with tokens and are exempt from taxes.
The same rules are applied to companies that are residents of the High Technology Park (HTP). They will not be affected by VAT, taxes on profits from mining, creation and purchase of tokens.
As for non-HTP firms, they are exempt from income tax in two cases. The tax is not paid when companies issue their own tokens or exchange them for each other. However, when exchanging digital assets for fiat money, the tax must be paid.
Companies are also exempted from VAT if they purchase goods and services to carry out transactions with tokens. Thus, the purchase of computer equipment for issuing cryptocurrencies is not subject to VAT.
HTP Regulations on crypto exchanges
Until the end of the summer of 2018, Minsk HTP plans to issue its own rules that regulate the work of cryptocurrency exchanges and companies. The document is aimed at supplementing the provisions of the previously issued decree and at defining clear standards for the blockchain companies’ operation.
Currently, it is said that token will not be a security, and mining is not an entrepreneurial activity. The size of the authorized capital of crypto platforms is also determined: the amount must be at least $500 thousand.
HTP also plans to discuss the requirements for the operation of cryptocurrency companies and its regulation.
According to representatives of Sysuyev, Bondar, Khraputsky law firm Alexander Bondar (partner) and Vitaly Tvardovsky (lawyer), to develop HTP as a special economic zone, it is very important to ensure admission of companies that plan to perform cryptocurrency transactions and organize ICO.
In their opinion, blockchain technologies have been used for a long time to solve a variety of tasks, and the ability to carry out cryptocurrency activities within the HTP will make the Park more attractive and increase the amount of deductions for its administration.
Experts believe that the development of HTP will be affected by the number of resident companies and the volume of transactions with tokens, carried out for other organizations. However, it is still difficult to assess the interest of Belarusian companies and large market players in the Park: much will depend on the requirements to them and their customers.
However, it can already be said that the adoption of the Decree No. 8 defined Belarus as a place where it is possible to create startups and transfer the operating part of the business.
In the opinion of Alexander and Vitaly, when the Decree No. 8 was adopted, the atmosphere for the blockchain industry became favorable primarily for individuals and residents of Belarus who dealt with mining or invested in cryptocurrency.
However, experts believe that it is too early to talk about completely friendly atmosphere for everyone: the Decree only outlined the main directions of activity, without affecting specific requirements to the development companies.
In their opinion, to estimate the impact of the Decree No. 8 on the cryptocurrency environment in Belarus, it is necessary to wait until blockchain companies begin to implement the first projects within the HTP.
However, Alexander and Vitaly are sure that regardless of the law enforcement practice, blockchain technologies in Belarus are becoming more in demand.
On October 10, Alexander Bondar will take part in a panel discussion as part of Blockchain & Bitcoin Conference Belarus. The speaker will discuss cryptocurrency regulation in Belarus and talk in detail about the taxation of blockchain projects in the country.