Lukashenka signed a Decree that orders to tax interest rates on short-term deposits

Banks will make the necessary charges. Foreign currency deposits will be taxed in rubles

Belarusian president Aliaksandr Lukashenka signed Decree No. 7 ‘On depositing money’ on November11, 2015. The ordinance provides for imposing an income tax upon the interest rates on short-term deposits starting from April 2016, Belsat informs following BelTA.

From November 12 on, time and conditional deposit accounts will be divided into irrevocable and revocable deposits. The terms for early withdrawal of funds will be the main distinctive feature of these two types of deposits, the National Bank said. The ordinance covers only newly-signed deposit agreements.

The income tax will be imposed upon the interest rates gained from the actual placement of funds in current (settlement) bank accounts and deposits for the period of no more than one year (in Belarusian rubles) and no more than two years (in foreign currency), BelTA reports.

The income tax will be imposed only on the interest rates and not the whole sum of the deposit, the document states. If the income tax is to be paid, the bank will calculate the sum of the tax and transfer it to the state budget.

While the management of the National Bank explained to reporters the details of the introduction of the new Decree, banks added new deposit products to the system.

For example, Belarusbank has introduced a new deposit "Classic irrevocable" in rubles at 30% (refinancing rate plus 5%) and at 5% in foreign currency.

Irrevocable deposit means that for a certain period, the customer will not be able to withdraw their money. Although the First Deputy Chairman of the National Bank Taras Nadolny makes a reservation - you can get the money ahead of time in exceptional circumstances.  

"These cases will be an extreme exception. For instance, the money could be needed in case of tragic accidents. Necessary documents are to be provided in this case. The decree gives the right to the banks, they will decide on their own," Euroradio quotes Taras Nadolny.

"Revocable" or short-term loan will be also provided in Belarus, and they will have to be paid tax on. In addition, interest rates on the "irrevocable" deposits will be 3-5% higher than on short-term deposits.

Taras Nadolny said that to date, 82% of deposits in Belarusian rubles are short-term. The situation with foreign currency deposits is better - 60% are foreign currency deposits are for up to one year.

According to the National Bank, the interest will be subject to tax. It will not be necessary to go and pay a 13% tax. The bank will make the necessary charges. Foreign currency deposits will be taxed in rubles.

Here is what the Deputy Minister for Taxes and Duties Sviatlana Shauchenka said:

"Income received in foreign currencies will be transferred at the date of income receipt into Belarusian rubles. The tax of 13% is paid in Belarusian rubles."

National Bank said that old deposits will not be subject to change and will not be taxed. But deposit extension will be available only on the terms of the decree, which means with tax.

Belarusbank repeated information about the new decree and the "wealth tax" several times. That is fast. Instruction is already in action.

But Belagroprombank even said that first of all there will only remain the deposits that correspond to the Decree No. 7, and secondly, rates of old deposits will drop unilaterally, even though you don't have to pay any tax on it.

"We have no new deposits, but we have removed those that do not meet the conditions and left those that are appropriate. Also, tomorrow the 26% rates will become the 25% rates," told representative of Belagroprombank. New deposits have appeared in private banks as well. For example, Priorbank today offers to have deposit accounts with the prefix "irrevocable" at 27% in rubles and 4.2% in dollars.

Employees of banks immediately warned that short-term deposits are to be taxed. But new deposits have not yet appeared everywhere.