Hrodna tax inspectors begin to impose taxes on loans

The money borrowed from your neighbour is subject to tax.

The tax office asked a resident of Hrodna about sources for purchasing a flat. The woman said she had borrowed money. Under the new rules, she has to pay tax on the borrowed amount of money, Vecherni Grodno newspaper writes.

The Hrodna resident filed an income tax return to the Kastrychnitski district tax office in 2015. The woman bought a flat last year. Asked about sources of income for the purchase, the woman answered she had borrowed money. The lenders were not her relatives, guardians, trustees or persons under guardianship.

The woman has to pay a tax of 24,960,00 rubles on the loans, the tax department for the Hrodna region reports. According to amendments to tax legislation, both incomes and loans are subject to tax since January 1.

In accordance with paragraph 2-1 of article 178 of the Tax Code of Belarus, since January 1, 2015, an individual must pay tax on money borrowed if:

– the individual files an income tax return and/or gives explanations regarding sources of income on a written request of the tax office;

– the individual declares loans borrowed from other individuals who are not self-employed businessmen, foreign companies that do not carry out business activity in Belarus though a permanent establishment and foreign self-employed businessmen on the tax return (or in an explanation regarding sources of income)

– loans haven't been paid off in full or in part;

– loans were received from non-relatives.