Belarus Scraps Tax Breaks for Residential Rentals

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From January 1, 2026, Belarus has introduced changes to value-added tax (VAT) rules affecting several key sectors of the economy, ranging from residential rentals and financial services to healthcare and logistics. The new framework предусматривает the cancellation of certain tax benefits and revises the treatment of specific transactions, the Ministry of Taxes and Duties explains.

One of the most notable changes is the abolition of the preferential tax regime for short-term rentals of residential properties from the private housing stock. From 2026, VAT is charged on leases of up to 15 calendar days, both for rentals to individuals and for leases to organizations. The new rules apply based on the date the property is handed over, which is particularly important for contracts spanning late 2025 and early 2026.

Certain financial-sector transactions have also been revised. The preferential treatment for factoring is now retained only when financing through the assignment of monetary claims occurs before the debtor’s obligation is extinguished. At the same time, brokerage services provided by insurance brokers to insurance companies have been brought under VAT, with commissions taxed at a 20% rate from January 1, 2026.



In the healthcare sector, the rules for determining the VAT tax base for services involving medicines and consumables have been clarified. The decisive factor is the tariff structure. If the cost of materials is included in the tariff, VAT is calculated on the full service price. Otherwise, the materials are treated as a separate taxable supply, affecting the final tax amount.

The approach to taxing transactions involving goods placed under customs procedures or stored in temporary storage warehouses has also changed. Sales of such goods to companies from Eurasian Economic Union (EAEU) countries, followed by transport under the transit procedure, are not subject to VAT, as the place of supply is considered to be outside Belarus. In similar transactions involving individuals who are EAEU residents, VAT must be paid.

Rules for applying the zero VAT rate to international road transport have been adjusted as well. The definition of an authorized recipient of goods has been expanded, simplifying confirmation of eligibility for the zero rate through CMR waybills. Empty railway rolling stock and containers have also been classified as export operations.

The procedure for determining the tax base when selling vehicles has been clarified. When a vehicle is sold below its residual or contractual value, comparisons are made excluding VAT. The same approach applies to vehicles previously acquired under financial lease agreements, even if those contracts did not provide for a buyout of the leased asset.

Changes also affect VAT rates. A ban has been introduced on including VAT in the price of transactions that are exempt from taxation when payment is made from budget funds. At the same time, the VAT rate has been reduced to 10% for quail products and, on a temporary basis, for the import of fresh apples from countries subject to customs control. The rules for issuing electronic VAT invoices for reimbursed expenses of commission agents and lease-related transactions have also been clarified, along with procedures for adjusting VAT deductions in cases of livestock losses during mandatory disease-control measures.

For individuals, the progressive personal income tax scale has been expanded, Belarus.by reports. The base rate of 13% remains applicable to more than 98% of employed citizens, while higher rates of 25% and 30% apply only to very high incomes. The threshold for the 25% rate has been raised from 220,000 to 350,000 Belarusian rubles ($75,438–120,015) per year. A separate dividend tax scale of 13% and 25% remains in place.

Finance Minister Yuri Seliverstov stressed that Belarus does not plan to raise the VAT rate, which will remain at 20% despite the partial rollback of tax benefits. Meanwhile, Russia will increase VAT to 22% in 2026, and similar decisions have been taken in Kazakhstan. In the near term, the authorities intend to assess the economic impact of these measures in neighboring countries before considering any potential revisions.

Analysts at International Investment note that, taken together, the 2026 VAT changes create a stricter and more formalized tax environment. The list of exemptions is narrowing, while calculation rules are becoming more detailed, reducing room for ambiguous interpretations and strengthening oversight in budget-sensitive segments.