The legal environment for Belarusian CSOs is not only characterised by extremely strict and worsening requirements, but also frequent legislative changes. These add to the instability and make planning of CSOs activities difficult. Unreasonable and irrational provisions were introduced into the legislation in 2024 without proper discussion with stakeholders. These resulted in several unforeseen negative consequences for the initiating state authorities, and were swiftly repealed.
The recently introduced requirement for CSOs to submit tax returns exclusively in electronic form has been paused: returns may be submitted on paper for tax years 2024 and 2025.
The Law on Amendment of Laws on Taxation, adopted on December 30, 2022, introduced significant changes to the tax system, affecting the procedure, reporting deadlines and amount of payment of taxes and fees, as well as the procedure for desk audits.
Among other things, this Law removed the exemption that previously permitted non-profit organisations not involved in entrepreneurial activities to submit tax declarations on paper (amendment to clause 2, paragraph 4.1 of Article 40 of the Tax Code). Before that Law, CSOs had not been required to file tax declarations electronically using specialised software.
As a result of this change, starting from January 1, 2024 when the amended Tax Code came into effect, all legal entities, including both commercial and non-commercial organisations, were required to submit tax returns electronically. In practice, this meant that CSOs that did not engage in business activities and previously submitted the simplest possible declarations on paper were obliged to submit declarations in electronic form. This entailed procuring an electronic key, installing certified cryptographic protection mechanisms and electronic declaration software on their computers, registering as a customer in the Public Key Management System for Verification of Electronic Signatures, and using a computer with cryptographic tools installed to access the Internet. A number of these actions necessitated payment for services and in-person involvement by an authorised representative of the organisation. Tax declarations of CSOs thus became significantly more complicated and costly.
There was no rational justification for these measures, CSOs needed to invest human resources, time and money in submitting virtually blank e-declarations. In addition, for many CSOs with geographically dispersed teams, including staff based outside of Belarus, this required even more effort. The confusion around this new process was compounded by the fact that, at the same time, individual entrepreneurs could no longer file their tax returns on paper – forcing thousands of people, along with CSOs, to go through all the formalities associated with obtaining a digital signature certificate.
Over time, however, the Ministry of Taxes and Levies recognised the difficulties involved in obtaining and renewing certificates for digital signatures. In the middle of 2024, long queues were reported at 12 service registration points and 44 reception points. A video went viral on social media, explaining that to obtain an electronic certificate for “convenient electronic declaration”, representatives of legal entities were compelled to start queuing at the reception points at night. Consequently, the Ministry explained the option of acquiring a digital signature certificates remotely and vaguely inticated the intention to persist in accepting tax declarations on paper.
To address the situation, the Law was passed on December 13, 2024, which stipulated that “Non-profit organisations that do not engage in entrepreneurial activity for the 2024 and 2025 tax (reporting) periods may submit to the tax authority at their place of registration the following documents:
- 13.1. tax returns (calculations) for taxes (levies) – in hard copy, notwithstanding the provisions of clause 2 para. 4.1 of Article 40 of the Tax Code of the Republic of Belarus.
- 13.2. information on the income of natural persons recognised as taxable persons for personal income tax and taxed at different rates of personal income tax, including information on the benefits and amounts of personal income tax – in electronic form on a USB stick.
Thus, the legislator instigated a two-year moratorium on implementing the recently introduced Tax Code requirement concerning the mandatory electronic form of tax reporting for all CSOs (although no such exemption was granted to individual entrepreneurs). Notably, information in electronic form regarding the income of individuals associated with CSOs can be submitted in the simplest possible form, such as on a USB flash drive. Interestingly, however, there is no provision for submission via email, which would arguably be more efficient and convenient for both taxpayers and tax authorities.
It is important to note that the introduction of mandatory electronic tax filing for all CSOs was criticised in the CSO Meter 2023 Country Report.