Belarus launches Tax Free system

MINSK. January 3. KAZINFORM The Tax Free system became operational in Belarus in 2013. This is envisaged in Law No.431-3 as of 26 October 2012 which introduced amendments and additions to the Tax Code of the Republic of Belarus. The law was officially published on the national legal Internet portal and takes effect on 1 January 2013.
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Belarus is the first among the countries of the Customs Union to launch the system of VAT refund to foreign citizens.

The refund will be made through an operator of the Special Tax Free system provided a foreign visitor buys goods worth at least Br800,000 (about €75) including VAT in one shop within one day. The goods must be purchased in the outlet which is part of the Tax Free system, Kazinform has learnt from BelTA.

The VAT will not be returned if the merchandise is subject to zero VAT or a reduced-rate VAT (for instance, food). Excisable duties are not eligible for the VAT return scheme. The VAT return scheme will work like this: a foreigner shall produce a receipt at a border checkpoint while leaving the country. The VAT will be returned as cash if there is a bank office at the border checkpoint. If there is none, the money will be returned by a bank transfer.

The Tax Free system is widely used in western countries. The money spent by tourists in a country is usually bigger than the sum of uncollected VAT. The countries often compete with each other by reducing the minimum purchase sums that fall under tax refund rule. Tax Free is a measure of state support aimed at boosting trade, small business servicing inbound tourism. The Tax Free system has been implemented due to the rising number of international events held in Belarus and for the sake of promoting cultural, educational, and recreational tourism.

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