Revocation of the UK-Belarus Double Tax Treaty: What You Need to Know

In a recent legislative move, the UK government has decided to revoke the double taxation treaty it once held with Belarus. This decision is encapsulated in the Double Taxation Relief and International Tax Enforcement (Belarus) (Revocation) Order 2025. But what does this mean for businesses, individuals, and the relationship between the two nations? Let's break it down.

Why Revoke the Treaty?

The primary role of a double taxation treaty is to prevent income or gains from being taxed twice—both in the country where they are earned and where the recipient resides. However, Belarus took unilateral steps to suspend parts of this agreement, specifically concerning dividends, interest, and capital gains. These actions, deemed a breach of the treaty by the UK, prompted the revocation.

Key Dates to Remember

• April 1, 2025: The treaty will no longer apply to corporation tax and other UK taxes.
• April 6, 2025: The treaty will cease for income tax and capital gains tax purposes.

Impact on Businesses and Individuals

For businesses and individuals, the change means that the UK will now tax income and gains from Belarus according to its own domestic laws without the constraints or benefits of the treaty. While this revocation could mean higher taxes due to the lack of treaty-based relief, the UK will still offer unilateral relief for Belarusian taxes where possible.

Why Now?

The UK tried to address the breach with Belarus, but with no resolution in sight, the UK opted to suspend the treaty reciprocally. This step is significant, reflecting the UK's commitment to enforcing fair international tax practices.

Looking Ahead

Should Belarus amend its approach and comply with the original treaty's terms, the UK is open to reinstating the agreement. For now, however, the revocation stands as a clear message on the importance of mutual compliance in international agreements.

What Should You Do?

Businesses and individuals affected by this change should familiarize themselves with the new tax obligations and seek advice if necessary. HMRC offers guidance and updates on these changes, ensuring that taxpayers can navigate the transition smoothly.

In summary, while the revocation marks a shift in tax relations with Belarus, it underscores the UK's commitment to fair and reciprocal international taxation standards. Keep an eye on developments, as the situation with Belarus could evolve, potentially restoring the treaty in the future.