Aleksandrs Afanasjevs

PwC tax department consultant

Madara Hmelevska

PwC senior tax associate

Belarus has unilaterally decided to suspend the operation of certain articles of its double tax treaties (DTTs) with 27 countries from 1 June 2024. This article explores the status of the Belarus-Latvia DTT and the list of affected countries.

The Belarus-Latvia DTT

The list includes Latvia, with Belarus suspending the operation of three articles:

• Dividends (Art. 10)
• Interest (Art. 11)
• Income arising on the disposal of property (Art. 13)

Suspending the operation of these articles means the tax relief they offer will no longer be available to residents of either country.

The Russian Federation has taken a similar step by unilaterally suspending its DTTs with 37 countries (including Latvia) on 8 August 2023. However, this decision had no impact at that time because Latvia had already suspended its DTT with Russia on 16 May 2022. The Latvia-Russia DTT officially ceased to apply from 1 January 2024.

As well as partially suspending its DTTs, Belarus has announced plans to increase the rate of withholding tax (WHT) on dividends and similar income for companies established in any of the listed countries that operate in Belarus without a permanent establishment. The rate of WHT these companies must pay goes up from 15% to 25% from 1 April 2024.

The Belarus government says the changes involving partial DTT suspensions and increased WHT rates will apply up to 31 December 2026.

27 countries with which Belarus restricts the operation of its DTTs

The list published by the Belarus government on 13 March includes 27 countries: Austria, Belgium, Bulgaria, Croatia, Cyprus, Czechia, Denmark, Estonia, Finland, France, Germany, Hungary, Ireland, Italy, Latvia, Lithuania, Netherlands, North Macedonia, Poland, Romania, Slovakia, Slovenia, Spain, Sweden, Switzerland, UK and USA.