“Debt tax” to be paid when filling in tax return

Amendments to article 178 of the Tax Code took force on January 1.

The new rules provide for a 13% tax on loans and credits received by citizens from other individuals. It is, in fact, a tax on debts, charter97.org learnt from the press service of the Tax Ministry.

The ministry notes that the tax on borrowed money must be paid only if the money is reported in your tax return. For example, one can be asked to explain the source of funds for an expensive purchase.

The requirement does not cover loans from Belarusian companies and credits from Belarusian banks and non-bank financial institutions.

The income tax is refunded if the debtor can confirm with documents that the debt has been repaid and money for the repayment wasn't taken from a new loan.

Tax offices do not impose a tax on income from loans and credits if they:

1. were received from close relatives: spouses, parents (including adoptive parents), children (including adoptive children), siblings, grandparents, grandchildren, great-grandparents, great-grandchildren;

2. were received from close relatives of a spouse, including a deceased spouse;

3. were repaid (returned) in full and the tax office received the document that confirm the full repayment (return) of loans and credits. If the loan or creadit has been paid partially, the tax is paid on the unpaid (unreturned) amount of the loan or credit.

The Tax Ministry reminds that tax returns are filled in only by the individuals who received a written notification from the tax body.