On Amendments to Laws Concerning Entrepreneurial Activity

May 6, 2024

The Head of State has signed the Law of the Republic of Belarus No. 365-Z of April 22, 2024 "On Amendments to Laws Concerning Entrepreneurial Activities".

The document expands the list of entities subject to mandatory participation in the state social security system.

Such entities will include citizens engaged in:

· independent professional activities, for which a single tax is paid by individual entrepreneurs and other individuals;

· craft activities, for which a craft fee is paid;

· activities on providing services in the sphere of agro-ecotourism, for which a fee for carrying out this type of activity is paid.

Starting from October 1, 2024, these citizens are obliged to pay mandatory insurance contributions for pension insurance to the budget of the state extra-budgetary fund of social protection of the population of the Republic of Belarus.

The procedure for paying contributions and their deadlines for the specified persons, as defined by Law No. 365-Z, are analogous to those for individual entrepreneurs.

Clarifications

The Head of State has signed the Law of the Republic of Belarus No. 365-Z of April 22, 2024 "On Amendments to Laws Concerning Entrepreneurial Activities" (Law No. 365-Z).

From October 1, 2024, the architecture of entrepreneurship in the republic has been updated, which provides for two categories of entities engaged in entrepreneurial activities:

Legal entities

· small organizations with an average number of employees up to 100 people,

· medium-sized organizations – up to 250 employees,

· large organizations – over 250 employees;

Individuals (four categories)

· individual entrepreneurs,

· individuals engaged in craft activities,

· individuals engaged in providing services in the field of agro-ecotourism,

· individuals engaged in independent professional activities.

For reference. When engaged in independent professional activities, a citizen does not have an employer and does not engage other individuals under labor and (or) civil law agreements.

The Law of the Republic of Belarus "On Amendments to Laws on Entrepreneurial Activities" has expanded the list of participants in the state social security system (Article 11).

From October 1, 2024, the following individuals are subject to mandatory state social security in terms of pension insurance: individuals engaged in independent professional activities and applying a single tax on individual entrepreneurs and other individuals in respect of such activities in the manner prescribed by Chapter 33 of the Tax Code of the Republic of Belarus; craft activities; activities on providing services in the field of agro-ecotourism (except for pensioners).

For reference. From January 1, 2023, individuals recognized as payers of tax on professional income are subject to mandatory state social security in terms of pension insurance (except for pensioners, as well as during the period of their application of a tax deduction for tax on professional income).

In other words, starting from October 1, 2024, all the above-mentioned categories of individuals are obliged to pay mandatory insurance contributions for pension insurance to the budget of the state non-budgetary social protection fund of the population of the Republic of Belarus (the fund's budget).

For the specified individuals (except for individuals who are payers of tax on professional income), the object for calculating contributions, the amount of such contributions, as well as the payment deadlines established by the legislation on state social security for individual entrepreneurs in accordance with the Law of the Republic of Belarus of July 15, 2021 No. 118-Z "On contributions to the budget of the off-budget state social protection fund of the population of the Republic of Belarus" (Law No. 118-Z) shall apply:

object for calculating contributions – the income determined by them,

· not less than the minimum wage established and indexed in accordance with the legislation in the month for which contributions are paid;

· not more than sixty times the average wage of employees in the republic for the last month of the year preceding the year for which contributions are paid (Articles 4, 9 of Law No. 118-Z);

For reference. The minimum monthly wage from January 2024 is set at 626.00 rubles; the nominal accrued average monthly wage for December 2023 is 2271.00 rubles.

amount of pension insurance contributions (as a percentage of the object for their calculation) – 29 percent (Article 5 of Law No. 118-Z);

For reference. Social insurance contributions (6 percent) are not paid by individuals engaged in independent professional activities, craft activities, and activities for providing services in the field of agro-ecotourism.

payment of contributions for the periods of activity in the reporting year – annually, no later than March 1 of the year following the reporting year (for the 4th quarter of 2024 – no later than March 1, 2025) (Articles 8, 11 of Law No. 118-Z);

submission of **reporting – annually, no later than March 31 of the year following the reporting year**, submission of personalized accounting documents (hereinafter – PAD) in form PU-3 (only for those payers who wish to declare periods of non-activity and thereby pay contributions not for a full calendar year, for 2024 – incomplete 4th quarter) (paragraph 16 of the Rules for individual (personalized) accounting of insured persons in the system of state social security, approved by Resolution of the Council of Ministers of the Republic of Belarus dated July 8, 1997 No. 837);

For reference. Program "PAD Input" (form PU-3) on the SSFS website.

benefits for payment of contributions– for individuals who, simultaneously with carrying out activities, are pension recipients(Article 11 of Law No. 365-Z), contributions by such citizens are paid voluntarily from the date of submitting an application to the Social Protection Fund bodies of the Ministry of Labor and Social Protection expressing the desire to participate in state social security legal relations;

registration in city, district, district-in-city departments (sectors) of regional, Minsk city administrations of the Social Protection Fund of the Ministry of Labor and Social Protection is carried out at the place of residence of payers in the manner prescribed by law.

Individuals engaged in independent professional activities and applying the professional income tax are currently payers of contributions to the fund's budget.