GILS Tax law: Belarus

TAX CONTROL AND APPEALING ITS RESULTS IN BELARUS

Belarusian legislation regulates the procedure of tax control actions with two legal acts:

- Tax Code of the Republic of Belarus (General Part) - Chapter 10 (hereinafter - TC);

- Edict of the President of the Republic of Belarus of October 16, 2009 No. 510 "On Improving Control (Supervision) Activity in the Republic of Belarus" (hereinafter - Edict No. 510).

1. TYPES AND/OR FORMS OF TAX CONTROL, THE PROCEDURE FOR CONDUCTING:

There are four types of tax control under Belarusian legislation: 

• off-site control, including monitoring matching accounting expenses and income of individuals,

For reference: Tax authority carries out off-site control at its location and without issuing a tax control notice. Such type of tax control includes reviewing the tax returns (calculations), other available documents and (or) information about the taxpayers. The main purpose of off-site control is to give the taxpayers the right to cure the law violation detected by the tax authority and to pay the extra tax, fee (duty) themselves. At present, this is the main type of out-of-court tax control.

• on-site control,

For reference: Tax authority conducts on-site control at a company's (hereinafter – inspectee) location. 

• cross-control,

For reference: Cross-control is carried out to establish (confirm) the credibility and legitimacy of transactions between the inspectee and its contractors or third parties related to transactions under control.

• thematic operational control.

For reference: Tax authority conducts thematic operational control to individuals (who are not individual entrepreneurs) at the place of their activity to promptly detect and suppress law violations while they are committing in a limited territory. This type of tax control also carries out to objects, vehicles, and other places of activity to find out the cases of unregistered business activities, to collect operational information, to check the applications and appeals from entities and individuals.

The basic type of tax control carried out with the inspectee is on-site control.

The document on the basis of which the tax control begins:

The tax control notice is the document upon which the control actions are based. It indicates the reason for the tax control, a list of the issues to be inspected, the inspected period and the tax control duration. Nevertheless, no notice is required for the off-site control. 

The main rights and obligations of the tax authority and the taxpayer:

The taxpayers have the basic rights during the tax control as follows:

- to represent their interests in the tax authorities, either personally or with a representative;

- to be present during the tax control, to explain issues related to the scope of the control and to receive a tax control act (statement);

- to submit clarifications concerning the calculation and payment of taxes, fees (duties) and objections concerning a tax control act (statement) to the tax authorities and to their officials;

- to appeal against the tax authority’s decisions and the actions (inactions) of their officials;

- to fail to execute the tax authority’s decisions and requests of their officials not complying with TC and other legislation;

- to get acquainted with tax declarations (calculations), other documents and (or) tax information, if it does not affect the third parties’ rights, freedoms and (or) lawful interests, and the materials do not contain information constituting state secrets, commercial and (or) other protected secrets.

During the tax control, the taxpayers are obliged: 

- to submit the documents (copies thereof), tax information and other data concerning the inspectees’ activities and property to the tax authority;

- to sign the tax control act (statement);

- not to disturb tax officials to carry out the tax control, to keep their premises suitable for the tax control open.

The tax authority has the right: 

- to receive documents (copies thereof), tax information and other data concerning the inspectees’ activities and property to the tax authority;

- to verify documents confirming the identity and (or) authorities from the taxpayers and their representatives, to request and obtain the documents (copies thereof) and other information concerning their activity and property from the taxpayers;

- to summon the inspectees, their representatives as well as third parties who have the documents and (or) information on the inspectees' activities;

- while conducting the tax control, except for off-site control:

A) to check cash in the cash desk and with accountable officials, securities and other property;

B) to inspect the taxpayer’s territories, premises or other objects used for determining whether the actual data on the objects correspond to the documentation provided by the taxpayer;

C) to demand property inventory, as well as to verify its results and seal the register, premises, places of document storage and (or) property of the taxpayer;

D) to confiscate original documents of the taxpayer or to demand extracts or copies thereof;

E) to inspect the taxpayer and its representatives personally, to inspect the things, documents, values and means of transport in their possession.

Carrying out the tax control the tax authority must: 

- recover unpaid (not fully paid) amounts of tax, fee (duty), penalties and enforce the unfulfilled tax obligation by charging penalties;

- demand the taxpayers cure the law violations and monitor compliance with the legal requirements;

- send (hand in) decisions to the taxpayers or their representatives;

- transfer tax control and other materials on tax crimes to the criminal prosecution authorities;

- revoke the decisions of lower tax authorities not complying with the legislation.

The timing of the tax audit:

As a general rule, the on-site control must be conducted within 30 working days. The tax control term can be extended by the tax authority’s head (deputy head). If additional control is appointed, its term must not exceed 10 work days. 

The term for the thematic operational control of one inspectee or its branch must not exceed 3 work days. For reference: The specified time limits do not apply if the control is carried out by order of criminal prosecution bodies. There is no deadline set for off-site and on-site control due to the specifics of their conduct.

The documents (acts) that are handed over to the taxpayer at the end of the tax audit:

The tax authority draws up an act or a certificate based on the results of the tax control (except for off-site control). If there are no tax violations, a certificate is drawn up (for off-site control - none). If there are any, an act describing the violations detected is drawn up. 

If the tax authority identified errors (incompleteness) in the submitted documents during the off-site control, it sends a notice to the taxpayer suggesting amendments within 10 work days. If the taxpayer didn’t make the amendments within this period, the tax authority can request supporting documents. If such assessment reveals a tax violation, the tax authority informs the taxpayer of information and (or) explanations, documents are not accepted and sends an off-site control act. 

The act (certificate) must be signed by the head of the inspectee (person responsible for accounting management), an official of the tax authority and third parties (if necessary). 

If there are any objections to the act (certificate), it is indicated at the time of signing. They must be submitted to the tax authority not later than 15 work days from the date of signing the act (certificate). After the expiry of this period, no objections are accepted. 

Tax authority reviews the inspectee’s objections within 15 working days and draws up a written opinion. The additional control on the objections analysis may be appointed within 10 working days from the date of their submission. 

Within 30 working days from the date of tax control act delivery to the taxpayers or from the date of filing objections the tax authority makes the decision. It is handed in personally or sent by registered mail to the taxpayers or their representatives.

In addition, a protocol for an administrative offence and (or) a resolution on an administrative offence may be drawn up.

The deadlines for the fulfilment of the results of the tax audit.

As a rule, taxpayers could execute the tax control decision by themselves within 7 days.

2. PROCEDURE FOR APPEALING THE RESULTS OF TAX CONTROL:

2.1. Pre-trial settlement

Whether the pre-trial settlement is mandatory:

Pre-trial settlement (administrative appeal procedure) is not mandatory. Taxpayers can file a claim directly to the court.

The authority where the appeal on the results of the tax audit should be filed:

A tax authority's decision may be appealed against: 

• to a higher tax authority;
• to a court.

However, filing an appeal to a higher tax authority or a higher official does not exclude the right to file an appeal in court. 

The time frame for filing the appeal:

The taxpayer can appeal the tax authority's decision to a court within 1 year from the date of the decision. The deadline for filing an appeal to a higher tax authority is shorter - 30 days from the date of the tax authority's decision. 

The appeal procedure is multi-stage.

1. An appeal against the decision of the tax office of the Ministry of Taxes and Duties (hereinafter - tax office) in a district, city or district in a city can be filed with the regional or Minsk city tax office (according to territoriality) or with the Ministry of Taxes and Duties (hereinafter - MTD). It must be filed within 30 days from the date of the decision. 

2. An appeal against the decision of the regional or Minsk city tax office may be filed with the MTD within 30 days from the date of its adoption. 

The decision may be appealed directly to the court without filing an appeal to a higher authority. Failure to submit an appeal is a ground to reject it. In this case, the term for filing a complaint (missed for a valid reason) may be renewed.

The time period for consideration of the appeal:

The appeal must be reviewed within one month from the date of its receipt.

The powers of the authority considering the appeal; the decision on the appeal: 

Following the results of the appeal review, the higher tax authority or a higher official (if there is no higher tax authority) to whom the officials issued the decision are directly subordinated, could:

- leave the decision unchanged and the complaint - without satisfaction;

- revoke the decision in full or in part;

- revoke the decision and order the additional control;

- make amendments to the decision.

The tax authority sends the decision on the complaint to the appealers (their representatives) within 3 work days from the date of the decision.

2.2. court settlement of tax dispute

Regulation of tax disputes:

Tax disputes resolution, where the taxpayer is the company, are regulated by the Economic Procedural Code of the Republic of Belarus (Chapter 25). Such a company should file an application to the economic court located in a region where the company operates. 

Time frame for going to court:

An application to the economic court may be filed within 1 year from the date of the decision.

The state fee amount:

The state fee is 20 basic values (BYN 800 or approximately USD 250 as of June 7, 2024). 

The time period for consideration of the claim:

In general, the first instance court tries tax disputes within 2 months from the date of the court’s order on the case appointment for hearing, which is not later than 15 days from the date of the application receipt by the court.

Court decision:

If the court finds the appealed tax authority's decision does not comply with the legislation and violates the taxpayer’s rights and lawful interests, it is adjudicated to invalidate the tax authority’s decision.

In addition, the court makes a decision on the tax authority's obligation to cure the violation of the company’s rights and lawful interests in full.

When the decision comes into force;

The court decision comes into force 15 work days after its making unless it is appealed.

Appealing the decision of the court of first instance in higher court instances:

An appeal (protest) can be filed within 15 work days after the court's decision to the appeal instance. 

A cassation appeal can be filed with the Supreme Court within one month after the judgement entered into force. 

A supervisory appeal may be filed within one year after the judgement entered into force.

 

Author: Polina Sachava, Associate