Belarus companies to pay industry development tax at 1% of cost of construction works performed - draft ordinance
<p> MINSK, Oct 16 - PrimePress. Belarus is about to introduce a new financial requirement for real estate development companies: they will have to contribute 1% of the cost of the construction work performed to non-budgetary funds for the development of the construction industry in order to modernise production facilities and renew the fleet of construction machines and mechanisms of industrial house-building enterprises and manufacturers of reinforced concrete products. </p> <p> </p> <p> The new financial regulation is a provision of the draft presidential ordinance “On creating non-budgetary funds for construction industry development”, which was published at the legal forum of Belarus. </p> <p> </p> <p> The draft says that the development funds of the Ministry of Architecture and Construction, Regional Executive Committees and the Minsk City Executive Committee shall be formed from 1 January 2021 to 31 December 2025 at the expense of 1% of the cost of construction and other special installation works performed in the reporting month by legal entities (general contractor, contractor, subcontractor), by the legal entity itself. </p> <p> </p> <p> It is stated in the draft that contractors included in the system of the Ministry of Construction and Architecture will allocate funds to the development fund of the Ministry of Construction and Architecture, and all other enterprises, regardless of their form of ownership - to the development funds of regional executive committees, Minsk City Executive Committee. </p> <p> </p> <p> In accordance with the draft, deductions to the development funds will not be made for the construction of residential houses, engineering and transport infrastructure facilities to residential areas, including individual ones; facilities under construction with the participation of the republican and/or local budgets; external government loans and external loans raised under government guarantees; loans of banks of Belarus under the guarantees of the government, regional executive committees and Minsk City Executive Committee, as well as bank loans being repaid by the Ministry of Architecture and Construction. </p> <p> </p> <p> Monthly contributions to the development funds will be made for the construction projects started on 1 January 2021; the monthly contributions will not be excluded from the tax base for taxable profits. </p> <p> </p> <p> The document’s substantiation report says that the need to establish development funds was prompted by the difficult financial situation of industrial housing construction companies and reinforced concrete manufacturers. In particular, about 70% of construction equipment of construction companies is 10 years old or more. </p> <p> </p> <p> Belarus would need Br645.4 million ($251 million at the exchange rate of the National Bank of Belarus) in the period between 2021 and 2025, to upgrade construction equipment; Br32.3 million ($12.539 million) to upgrade and support the design capacity of reinforced concrete products manufacturing companies. </p> <p> </p> <p> The ordinance will be available for public hearings and discussions on October 16-26, 2020. End </p>
2020-10-17
Primepress
MINSK, Oct 16 - PrimePress. Belarus is about to introduce a new financial requirement for real estate development companies: they will have to contribute 1% of the cost of the construction work performed to non-budgetary funds for the development of the construction industry in order to modernise production facilities and renew the fleet of construction machines and mechanisms of industrial house-building enterprises and manufacturers of reinforced concrete products.
The new financial regulation is a provision of the draft presidential ordinance “On creating non-budgetary funds for construction industry development”, which was published at the legal forum of Belarus.
The draft says that the development funds of the Ministry of Architecture and Construction, Regional Executive Committees and the Minsk City Executive Committee shall be formed from 1 January 2021 to 31 December 2025 at the expense of 1% of the cost of construction and other special installation works performed in the reporting month by legal entities (general contractor, contractor, subcontractor), by the legal entity itself.
It is stated in the draft that contractors included in the system of the Ministry of Construction and Architecture will allocate funds to the development fund of the Ministry of Construction and Architecture, and all other enterprises, regardless of their form of ownership - to the development funds of regional executive committees, Minsk City Executive Committee.
In accordance with the draft, deductions to the development funds will not be made for the construction of residential houses, engineering and transport infrastructure facilities to residential areas, including individual ones; facilities under construction with the participation of the republican and/or local budgets; external government loans and external loans raised under government guarantees; loans of banks of Belarus under the guarantees of the government, regional executive committees and Minsk City Executive Committee, as well as bank loans being repaid by the Ministry of Architecture and Construction.
Monthly contributions to the development funds will be made for the construction projects started on 1 January 2021; the monthly contributions will not be excluded from the tax base for taxable profits.
The document’s substantiation report says that the need to establish development funds was prompted by the difficult financial situation of industrial housing construction companies and reinforced concrete manufacturers. In particular, about 70% of construction equipment of construction companies is 10 years old or more.
Belarus would need Br645.4 million ($251 million at the exchange rate of the National Bank of Belarus) in the period between 2021 and 2025, to upgrade construction equipment; Br32.3 million ($12.539 million) to upgrade and support the design capacity of reinforced concrete products manufacturing companies.
The ordinance will be available for public hearings and discussions on October 16-26, 2020. End