[World Tax News] Belarus issues tax guidelines for foreign entities operating through PE and more

World Tax News provides a weekly snippet of tax news from around the globe. Here is a glimpse of the tax happening in the world this week.

1. Belarus releases new guidance on the taxation of foreign entities operating through a Permanent Establishment

The Belarus Ministry of Taxes and Duties has released updated guidance on the taxation of foreign organizations conducting business in Belarus through a Permanent Establishment (PE).

The updated guidelines provide clarity and direction on applying the updated Tax Code of Belarus. These guidelines are essential for ensuring compliance with Belarusian tax laws and avoiding any potential penalties or legal consequences. The guidance includes clarification on the following aspects:

(a) Tax obligations of a foreign organization in connection with activities in the territory of the Republic of Belarus through a permanent establishment;

(b) The concept of a permanent establishment of a foreign organization;

(c) Registration of foreign organizations in connection with activities in the territory of the Republic of Belarus through a permanent representative office;

(d) Features for foreign organizations operating in the Republic of Belarus through several permanent representative offices;

(e) Peculiarities submission of tax declarations (calculations) and fulfilment of tax obligations;

(f) Costs taken into account when taxing the profit of a foreign organization operating in the Republic of Belarus through a permanent establishment;

(g) Algorithms of actions when the income of a foreign organization operating in the Republic of Belarus through a permanent establishment is subject to income taxation;

(h) Taxes for which foreign organizations are recognized as tax agents;

(i) Carrying out tax control measures; and

(j) Deregistration of a foreign organization.

Source: Letter No. 4-2-21/00759 of 10 March 2023

2. Netherlands urges taxpayers to repay tax debts postponed during the COVID-19 pandemic

On March 09, 2023, the Dutch Ministry of Finance issued a statement urging taxpayers to settle their tax dues postponed due to the COVID-19 pandemic. In the upcoming timeframe, the Tax and Customs Administration will take the initiative to notify these business owners about their overdue payments and provide them with information on how to catch up or request a deferment.

From March 12 2020, until March 31 2022, the Dutch Govt. provided taxpayers with a unique opportunity to defer payments for various taxes. Commencing from October 1 2022, taxpayers were required to repay their deferred tax payments.

The Ministry of Finance reported that most taxpayers are on track with their repayment schedule, while around 103,000 taxpayers have unpaid debts. Among these, more than 73,000 taxpayers have yet to initiate any repayments. To address this issue, the tax authority will send out letters to taxpayers in March, followed by another round in April if no action is taken. By mid-May, formal decision letters will be sent to taxpayers who still have not paid and will be given two weeks to make their payments. If the debt remains unpaid, collection measures will be taken.

Source: Release dated March 9 2023