Belarus was the first in the world to legalize smart contracts and abolished income tax for miners

During the last year, the main topic was discussed in the corridors of power and the Belarusian IT-community: the benefits for the High-Tech Park (HTP) can be canceled, more precisely, not extended. Critics said that programmers have the highest wages - several times higher than the average wages in the country. Why should we give fat cats the benefit of paying contributions to the Social Security Fund and provide other tax deductions? The budget and FSZN lose big money.



But supporters of extension of benefits laid the main trump card: HTP has become one of the main sources for attracting currency to the country: as a result, Belarusian IT-companies are well-known all over the world. It is necessary not only to preserve the benefits, but also to expand them to other areas of business. Moreover, it is necessary to maximally support and implement IT in all areas of the economy and society , because this is the future of humanity.



Fortunately, in a clash between the economic and the IT lobby, the president chose IT. Today, at a meeting with representatives of business circles, Alexander Lukashenko announced the signing of a “revolutionary” decree “On the Development of the Digital Economy” ( key provisions of the document , the text has not yet been published), which for the first time introduces the concepts of mining, blockchain, smart contracts, tokens to the legal field. It introduces mining and cryptocurrency tax breaks. And most importantly - HTP is exempt from income tax and VAT until January 1, 2049 .



Aleinikov and Partners, Vlasova, Michel and Partners, Baker Tilly Bel and others worked on the text of the document. Preparation of the decree took about nine months, during which representatives of all HTP residents and IT companies that are not part of the HTP were interviewed. The signing of the superliberal decree is the undoubted success of its authors and the entire expert community that participated in the promotion of this project.



Alexander Lukashenko does not particularly understand high technologies. On this occasion, he said: “We have advanced people who have already thought about how to do this. I thought this way: today we don’t have it, if something is good - plus, if it is negative, I know who to ask. ”





Evaluation of the effect of the adopted decree, from the presentation of VP Capital



“The President of Belarus supported all the ideas and initiatives of the IT community. The decree, even before signing in the press, was sometimes called revolutionary. In essence, he is. In Belarus, one of the best conditions in the world for the development of IT, high-tech in general, businesses based on the blockchain technology and much more, are really being created. There is no point in talking about the decree - its norms speak for themselves, ”commented the head of the HTP Administration Vsevolod Yanchevsky on the document.



“A very interesting document. On the one hand, by this decree Belarus took over foreign law institutions from the world, on the other hand, thanks to this presidential decision, Belarus became the first country to introduce a smart contract into the legal field - said lawyer, senior partner of the law firm Aleinikov & Partners Denis Aleinikov. - This mechanism can solve the fundamental problem of humanity - non-fulfillment of what was agreed on paper. The functions of automatically fulfilling the terms of the contract are assumed by the computer program. ”



Blockchain technology is discussed in Section 6 of the main published provisions. It says that legal entities have the right to create and place their own tokens in Belarus. You can do it abroad, but only through HTP residents. You can acquire, dispose of tokens and perform other operations with them through cryptocurrency exchanges, cryptocurrency exchange operators.



Separately, it is worth mentioning mining by individuals. According to the text of the document, individuals receive the right to own tokens and perform the following operations with them: mining, storage, exchange, acquisition, alienation for Belarusian rubles, foreign currency, electronic money, as well as donations and testaments of tokens.



It has been established that the activity on mining, acquisition, alienation of tokens carried out by individuals is not an entrepreneurial activity. Moreover, participants of relations connected with the use of tokens were granted tax and other benefits and preferences. Economic entities are exempt from taxation of activities related to cryptocurrencies and tokens, including mining, in particular, token exchange (cryptocurrency) transactions. Exemption applies to income tax, VAT, tax on simplified tax, income tax on individuals.



In addition to all of the above, the decree significantly expands the types of activities that make it possible to become a resident of the HTP and receive appropriate tax benefits. There is a list of 38 types of activities, including ICO, mining, cryptocurrency exchanges, securities trading on tokens, etc.



Working conditions for residents of the HTP are significantly simplified: the authorization procedure for opening accounts in non-resident banks is canceled, the procedure for making payments using electronic money is simplified, currency transactions are allowed in the notification procedure, it is allowed to use English as the primary accounting document document language, etc.

“Dear friends, IT shnik! - Victor Prokopenya, Executive Director of VP Capital, wrote to Facebook over a fresh photo from the Palace of Independence after the meeting with the President - The President’s meeting on the digital economy’s results today: The decree will be signed before the end of this year - a super-liberal version with support for all methods of using the blockchain, 100% lack bureaucracy, any business models including food, full freedom in hiring foreign specialists, support for education, institutions of English law, and so on. The president supported the idea to significantly improve the quality of teaching English so that every child could speak English fluently after school. The number of trained IT specialists will be increased significantly . ”

The general manager of VP Capital Belarus Nikolay Markovnik also expressed a positive assessment:

“The complex of created legal conditions for the development of IT is unprecedented for the region. This will attract technology, companies and highly skilled specialists from neighboring countries to the country.



If we compare with the conditions for doing business in the United States, then we have more attractive conditions in terms of the tax regime. In other matters - just as good. Moreover, taking into account the complex regulation of the blockchain technology, it can be said that Belarus today is becoming one of the best countries in the world to run IT business.



It is important that the adoption of this decree is watched with great attention in Ukraine and Russia - our neighboring countries. Each country has its own problems, which are reflected in the IT sector. In Russia - sanctions, in Ukraine, searches of offices of IT companies are frequent. Taking into account the adoption of the Decree in Belarus, conditions are unprecedented for the region. Perhaps this will be a good opportunity for IT companies in neighboring countries. Structuring is quite possible when the head office is located in Belarus, and the developers are respectively in Russia or Ukraine



Also, given the simplification of the procedure for hiring specialists from other countries, the relocation of whole teams to our country is not a problem. ”