Tax evasion Penalty in Belarus

In the Republic of Belarus tax evasion is a serious offense followed by penalties and other measures of liability. The norms of the law on administrative offenses provide for measures of responsibility for non-payment of taxes to ensure timely and full receipt of tax payments to the budget. Violation of these obligations can not only lead to financial losses for the taxpayer, but also to additional restrictions, such as suspension of operations on bank accounts or even criminal liability in particularly severe cases.

In this article we will look into types of tax offenses and corresponding penalties, additional liability measures that apply to violators of tax laws, what factors affect the size and severity of the penalty and give recommendations on preventing tax violations and minimizing risks.

Importance of paying taxes and consequences of tax evasion

Payment of taxes is the most important obligation of every taxpayer, be it an individual, individual entrepreneur or legal entity. Taxes ensure the functioning of the state, financing of social programs, public health care and education, infrastructure and other areas of critical importance for society.

In Belarus, the tax system is structured in such a way as to guarantee an even distribution of the tax burden and the filling of the budget. Timely and full payment of taxes contributes to economic stability, supports government programs and improves the quality of life of the population.

However, tax evasion has serious consequences for both individual taxpayers and the state as a whole.

Consequences of tax evasion for a taxpayer

1. Financial penalties

Depending on the nature of the violation, a taxpayer may face fines, the accrual of penalties, additional taxation and other financial penalties.

For minor delays in payment, penalties are accrued for each day of delay.

In case of willful tax evasion, the amount of penalties may reach significant amounts.

2. Administrative and criminal liability

According to the Code of Administrative Offenses of the Republic of Belarus, penalties are provided for tax evasion. In especially large cases – criminal liability.

If the owed amount exceeds a certain threshold, the taxpayer may face imprisonment.

3. Blocking of accounts and restriction of activities

In case of prolonged tax evasion, the taxation authorities may block a taxpayer’s bank accounts, resulting in inability to conduct business or fulfill financial obligations.

4. Restriction of the right to travel abroad

For individuals with large tax debts, the right to leave the country may be temporarily restricted.

Thus, compliance with tax obligations is not only a legal, but also a social responsibility of each taxpayer. Timely payment of taxes allows to avoid financial sanctions and legal consequences, and also contributes to the development of the state and society.

How tax violation penalties are calculated

In Belarus, penalties for tax violations, including those related to tax evasion, are determined based on the amount of the base value and the amount of unpaid taxes.

Types of tax offenses and related penalties

The tax legislation of the Republic of Belarus establishes strict liability measures for various types of tax offenses. Let’s look into the main ones:

Violation of the deadline for submission of tax declaration

Tax declarations (calculations) are documents that taxpayers are obliged to submit to tax inspectorates upon their request or in cases that are listed in tax regulations. There are always clear deadlines for submitting such documents to the tax office. Tax declarations are submitted electronically or in paper form (individuals). There is a measure of responsibility for violation of these deadlines – an administrative fine.

For individuals:

• Delay of more than 30 business days (when there is Payable Tax) or when there is no Payable Tax and the delay is more than 12 months: a fine of 0.5 basic unit (21 rubles or approximately 6.5 euros).
• For each full month of delay: an additional 0.5 basic unit.
• Maximum fine: not more than 10 basic units (420 rubles or approximately 127 euros).

For organizations and individual entrepreneurs:

• Deliay up to 3 business days: a fine of up to 1 basic unit.

For organizations, individual entrepreneurs and officials of organizations:

• Delay over 3 business days: a fine of 2 basic units (84 rubles or approximately 26 euros). For each full month of delay, the fine is increased by 0.5 basic units (21 rubles or approximately 6.5 euros). At the same time, the maximum fine is not more than 10 basic units (420 rubles or approximately 127 euros).

Violation of a tax payment deadline

Tax payment deadlines are always clearly established in tax regulations. As a general rule, when the deadline for tax payment falls on a non-working day or a weekend, you can pay taxes on the next nearest working day. You can do it no later than 24.00 of the last day of the deadline. It should be taken into account that usually the day of tax payment is considered to be the day of producing payment documents to the bank, but other options are also possible. For example, when there is no money in the bank account, the tax payment day will be the day when the actual payment of taxes took place. In this case, a penalty for late payment is not applied if an organization or individual entrepreneur has transferred payment orders for the payment of taxes to the bank on time.

Administrative penalties are established for violation of tax payment deadlines:

For individuals:

If the amount of unpaid tax exceeds 1 basic unit and non-payment is committed through negligence:

• A fine in the amount of 15% of the unpaid tax amount, but not less than 0.5 basic unit.
• For intentional evasion, incomplete payment of taxes, a fine of 40% of the unpaid amount of tax, but not less than 10 basic units.
• Penalties: for each day of payment delay, penalties are accrued starting from the day following the due date, including the day of fulfillment of the tax obligation.

For individual entrepreneurs (IE) and legal entities:

Failure to pay or incomplete payment of tax:

• For an individual entrepreneur, the penalty is 40% of the unpaid tax amount, but not less than 2 basic units (84 rubles or approximately 26 euros).
• Organizations are also fined 40% of the unpaid tax amount, but not less than 10 basic units (420 rubles or approximately 127 euros).

For officials of organizations:

1.When officials have negligently allowed non-payment or incomplete payment of tax and this was discovered in the course of the tax inspector’s inspection of the tax return:

A fine of 2 to 8 basic units (maximum fine – 336 rubles or approximately 100 euros).

2. When officials negligently failed to pay taxes and this is established in the course of an audit of tax payments by an organization, the amount of the fine depends on the ratio of the taxes assessed in the course of the audit to the taxes paid by the organization for the audited period:

The amount of taxes assessed in the course of the audit is from 1% to 3% of the total amount of taxes assessed by the organization for the audited period – fine for an official – from 8 to 12 basic units (maximum fine – 504 rubles or approximately 152 euros).

The amount of taxes assessed during the audit is more than 3% but not more than 5% of the total amount of taxes paid by the organization for the audited period – fine for an official from 12 to 16 basic units (maximum fine – 672 rubles or approximately 202 euros).

The amount of additional taxes charged during the audit – more than 5% of the total amount of taxes paid by the organization for the audited period – the fine for an official is from 16 to 20 basic units (maximum fine – 840 rubles or approximately 255 euros).

If an official of the organization deliberately failed to pay taxes, the fine ranges from 40 to 120 basic units (maximum fine – 5040 rubles or approximately 1,500 euros).

For repeated violations of the tax payment procedure within a year, the amount of fines for individuals and officials increases and ranges from 100 to 200 basic units (maximum fine – 8,400 rubles or about 2,530 euros).

It should be noted that in case of deliberate tax evasion resulting in significant damage, criminal liability may be incurred in accordance with Article 243 of the Criminal Code of the Republic of Belarus.

Thus, tax compliance and timely fulfillment of tax obligations are the key to avoiding serious financial and legal consequences.

Conclusion

Compliance with tax legislation is not only an obligation of every taxpayer, but also an important factor of financial stability for both individual citizens and businesses and for the country’s economy as a whole. Taxes ensure the operation of public institutions, financing of the social sphere, infrastructure development and support of entrepreneurship.

Violation of tax obligations, whether it is late filing of a declaration, delayed payment of taxes or their incomplete payment, entails serious consequences. Depending on the nature of the offense, fines, penalties and, in particularly serious cases, even criminal liability are applicable. In addition, the tax authorities have the right to apply additional measures, such as blocking of accounts and restriction of the right to travel abroad.

In order to avoid unpleasant consequences, it is important for every taxpayer to monitor changes in tax legislation, follow the deadlines for filing reports and paying taxes, and take into account possible tax risks.

One of the most effective ways to minimize tax risks is to obtain professional advice from tax attorneys. Specialists will help to understand complex taxation issues, prepare correct tax reporting, identify possible tax benefits and develop a strategy to minimize tax risks. Consultations of tax lawyers are especially relevant in cases of disputes with tax authorities or in preparation for tax audits.

Thus, a responsible attitude to tax liabilities and a competent approach to tax accounting will allow you to avoid fines and other sanctions, maintain financial stability and conduct your business in full compliance with the legislation of the Republic of Belarus.