Reporting of HTP Resident Companies in Belarus

The Hi-Tech Park (HTP) in Belarus is a special legal regime that provides significant tax and administrative benefits to IT companies. However, along with the advantages of HTP residents, there are obligations, including maintaining accounting, tax, and statistical records by Belarusian legislation. This article will look at the basic reporting requirements for HTP resident companies, its management’s key nuances, and the possible consequences of non-compliance with established standards.

General Reporting Requirements for HTP Resident Companies

Companies with the status of residents of the Hi-Tech Park (HTP) in Belarus are required to comply with certain maintenance and reporting requirements. These requirements cover several key aspects: mandatory audits, regular reporting to the HTP administration and tax authorities, and timely fulfillment of financial obligations.

1. Mandatory audit

HTP residents are required to conduct a mandatory audit of their annual accounting (financial) statements annually. This audit must be completed no later than June 30 of the year following the reporting year. Conducting an independent audit allows for the identification and elimination of possible accounting irregularities and increases the reliability of the data provided. A positive audit report strengthens the trust of potential investors and financial institutions.

2. Quarterly reports

HTP residents are required to provide the HTP administration and tax authorities with information on the cash flow in their accounts and the movement of electronic money through electronic wallets quarterly, no later than the 10th day of the month following the reporting quarter. The form and procedure for submitting these reports are approved by the HTP administration and submitted electronically through the interdepartmental document management system. The resident must provide a report even if there are no performance indicators.

3. Annual reporting

Annually, by February 1 of the year following the reporting year, HTP residents must submit a report on their activities to the HTP administration. The HTP administration determines the form of this report and includes general information, appendices, and an explanatory note. The report is provided electronically through the interdepartmental document management system.

4. Deductions to the HTP administration

HTP residents must deduct 1% of the revenue (income) received for the previous quarter every quarter to the HTP administration. These deductions must be made no later than the 20th of the month following the reporting quarter. The correctness of the calculation and transfer of these deductions is checked during the mandatory annual audit. Failure to meet deadlines or incorrect calculation of deductions may affect the status of an HTP resident.

5. Transition to a standard taxation system

The acquisition of HTP resident status is incompatible with the application of the simplified taxation system (STS). From the first day of the month in which the company was registered as an HTP resident, it is obliged to switch to the general taxation system (GTS), regardless of the previously applied accounting period for the STS. Accordingly, after switching to the GSN, you need to submit the tax returns that are required for the GSN.

6. Taxation and benefits

HTP residents enjoy certain tax benefits, including exemption from income tax, VAT, and some other taxes. However, they must comply with established requirements, including timely filing of tax returns and payment of mandatory payments. Failure to comply with these requirements may result in penalties and loss of HTP resident status.

Compliance with all these requirements is mandatory for HTP resident companies. It helps maintain their status and ensures transparency and trust from government agencies and partners. 

Reporting of HTP Resident Companies to the HTP Supervisory Board Secretariat

The resident companies of the Hi-Tech Park (HTP) in Belarus are required to report to the Secretariat of the HTP Supervisory Board. These requirements aim to ensure transparency of activities, compliance with legislation, and trust among government agencies and partners.

1. Annual mandatory audit and provision of an audit report

HTP residents are required to conduct a mandatory audit of their annual accounting (financial) statements annually. This audit must be completed before June 30, following the reporting year. Upon completion of the audit, companies must provide the HTP Supervisory Board Secretariat with a copy of the audit report. This allows the Secretariat to assess the reliability and completeness of financial information and ensure that the resident complies with the established rules and regulations.

2. Quarterly deductions and reporting on them

HTP residents are required to quarterly deduct 1% of the revenue earned during their activities as residents and from the sale of tokens in favor of the HTP Supervisory Board Secretariat. These payments must be made no later than the 20th of the month following the reporting quarter.

Starting in 2023, HTP resident companies must complete and attach to the audit report information on calculations and accruals of deductions to the HTP Supervisory Board Secretariat for the year by the form established by the Ministry of Finance. This ensures transparency and control over the correctness of calculations and timely payments.

3. Annual report on key performance indicators

HTP residents must submit an annual report on the main indicators of their activities to the Secretariat of the HTP Supervisory Board. The Secretariat approves the form and procedure for completing this report, which may be updated annually.

The deadline for submitting the report depends on the date of registration of the company as an HTP resident:

• For companies registered in the first half of the calendar year, the report must be submitted no later than April 1 of the year following the reporting year.

• For companies registered in the second half of the calendar year, the report must be submitted no later than three months after the expiration of the twelve months from the date of registration.

After the first reports are submitted, the annual reports are sent to the Secretariat of the HTP Supervisory Board no later than March 1 of the year following the reporting year. This report should include information on the implementation of the business models specified in the relevant business project, on the achievement of planned financial and economic indicators, and on compliance with HTP and government requirements.

This report allows the Secretariat to monitor residents’ activities and assess their contribution to the development of HTP.

4. Providing copies of tax and statistical reports

HTP residents are required to send copies of their tax and statistical reports and other information related to their activities to the Secretariat of the HTP Supervisory Board.

This allows the Secretariat to monitor residents’ activities and ensure their compliance with established rules and regulations. However, the Secretariat is currently able to obtain this information independently.

5. Internal control and compliance with HTP rules

HTP residents must implement and maintain internal control systems that comply with the requirements established by the Regulation on the Rules of Internal Control of HTP Residents. This includes developing internal procedures and policies aimed at preventing violations and ensuring that the company’s activities comply with established requirements.

Compliance with these requirements contributes to maintaining a high level of trust in HTP residents among government agencies, partners, and customers.

6. Liability for non-compliance with requirements

Failure to comply with the established reporting requirements and obligations to the HTP Supervisory Board Secretariat may lead to various consequences for the resident company, including:

• Suspension or termination of HTP resident status may lead to the loss of tax and other benefits.
• Deterioration of the company’s reputation can negatively affect relations with partners and customers.

Therefore, it is essential for HTP resident companies to carefully comply with all established requirements and promptly submit the necessary reports to the HTP Supervisory Board Secretariat.

7. Report on the results of the information systems audit

When joining the HTP or installing an information system, it will be necessary to conduct an audit of this system and a report on the audit results. All information systems must be audited. Such a report is prepared not by the HTP resident company from which the report is required but by another company or sole proprietor. The report requires determining that the applicant’s information system(s) comply with the requirements imposed on the activities of HTP residents by the legislation and the HTP Supervisory Board. The report also needs to establish a low level of damage and loss of the applicant’s information systems due to third parties’ unlawful interference in this work.

Conclusion

Proper reporting is one of the key conditions for the successful operation of HTP resident companies. Compliance with the established requirements helps to avoid penalties, simplifies interaction with tax and regulatory authorities, and increases business transparency. Companies should carefully monitor changes in legislation and, if necessary, seek professional legal and reporting support. Our company offers business process management services and attracts talented specialists to your companies. We provide comprehensive support, overcoming foreign companies’ challenges when creating jobs in another country and resolving visa issues. Together, we will build successful teams.