News: Belarus - blockchain and automatic exchange of financial information

Belarus refrains from signing an agreement on automatic exchange of financial information against the background of the entry into force of the Decree on the Development of Digital Technologies

The fight of states against the use of offshore jurisdictions and tax evasion is effectively formalized in the signing of significant number of international treaties aimed at automatic exchange of tax information and the reopening of bank secrecy.

The most important of these was the signing of the MCAA convention, which presupposes the preparation by banks of signatory countries of information on the financial activities of individuals and legal entities. The collected data are transferred to the tax authorities and subsequently to the country of residence of the account holder.

To date, more than 100 countries, members of the European Union and even offshore jurisdictions have joined the convention.

Belarus, which demonstrated its active intention to join the world community in this matter as far back as 2014, has not yet signed the convention for unknown reasons.

It is noteworthy that in March 2018, the Decree on the Development of the Digital Economy came into force, paying special attention to the legalization and legal regulation of crypto-currency transactions and blockchain technology,  signed by the President of Belarus at the end of 2017.

The Decree provides for the conditions and tax regime for the legal functioning of the crypto-currency in the territory of Belarus. In addition at the state level "High-Tech Park" is created. Under its jurisdiction individuals and legal entities are given the opportunity to acquire, dispose and perform other operations with cloud assets. The period for the platform for crypto-operations has been extended to the end of 2048, and its residents can only be Belarusian legal entities and individuals who have stated in the registration business plan the appropriate activity on cryptology. Crypto-currency exchanges are recognized as crypto-currency operators, which are charged with placing financial assets in accounts with local banks for at least 200,000 Belarusian rubles.

This activity is recognized as entrepreneurial and is subject to appropriate taxation from January 1, 2023, receiving a 5-year tax exemption. The National Bank of Belarus is authorized as the regulatory state authority.

The document was developed for more than 6 months, since a huge number of  specialists were involved in this process.

As reported in the presidential administration of Belarus, the crypto-currency regulation will be implemented in accordance with the recommendations of the Financial Action Task Force on Money Laundering (FATF). Participants of the crypto-currency market will not be subject to the provisions of securities laws, thus creating a completely self-sufficient legal basis.

It is worth noting that the National Bank of Belarus reported that there is no intention to create a national crypto-currency.

Is there any connection between Belarus ignoring the international initiative on automatic data exchange and the creation of crypto-currency harbour on its territory, it is a big question, but their simultaneous emergence creates food for thought.