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LONDON – The UK government has formally announced the suspension of its double taxation treaty with Belarus, a move set to take effect in April 2025 and expected to significantly impact cross-border taxation for individuals and companies operating between the two nations.
In a diplomatic note received by Belarus’ Ministry for Taxes and Duties, the United Kingdom confirmed its decision to fully suspend the Convention for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion—a bilateral agreement signed in Minsk on 26 September 2017.
Why Is the Treaty Being Suspended?
Although UK authorities have not released a detailed public statement explaining the rationale, the suspension aligns with broader geopolitical tensions and policy realignments involving Belarus and Western nations. The move follows similar actions taken by other EU and Western countries seeking to reassess tax and diplomatic agreements with Minsk in recent years.
What Will Change for Businesses and Individuals?
The suspension will take effect in two phases:
- Corporate Tax: Treaty benefits will cease for profits starting from 1 April 2025.
- Personal Income and Capital Gains Tax: Treaty relief ends for income accrued or paid on or after 6 April 2025.
Key Implications:
- UK and Belarusian residents will no longer be protected from double taxation, potentially resulting in higher overall tax liabilities.
- Withholding taxes on dividends, interest, and royalties between the two countries may increase.
- Cross-border tax planning strategies involving UK-Belarus transactions will need to be urgently reassessed.
Reactions from Tax Experts
Elena Kovaleva, a Minsk-based international tax advisor, commented:
“This suspension creates uncertainty for businesses relying on the treaty for withholding tax relief. It’s critical that companies with Belarus-UK operations revisit their structures before the 2025 deadlines.”
James Taylor, partner at a UK tax law firm, added:
“Without treaty protection, some companies may face double taxation unless domestic relief provisions are available. It’s essential to monitor for any transitional guidance.”
What’s Next?
As the suspension is now formally communicated, the UK and Belarus tax authorities are expected to update guidance for affected taxpayers. Businesses engaged in bilateral trade, investment, or services must prepare for a post-treaty environment. Advisors are urging clients to:
- Conduct impact assessments by Q3 2024
- Consider alternative holding structures
- Reassess withholding tax exposure and foreign tax credit availability
With no indication that the treaty will be reinstated in the near future, stakeholders should operate on the assumption that the suspension is indefinite.
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