The IT industry continues to develop dynamically and attract more and more specialists. However, in addition to technical skills, it is crucial to consider a profession’s financial aspects. One of them is the payment of a tax on professional income when IT services are not provided within the framework of work duties. Our specialists can help you understand the specifics of applying the tax on professional income in IT.
Why specialists in the field of IT services need to know about the PIT
Information about the taxation of their services and the payment of professional income tax is essential for individuals who are specialists in the IT field for several reasons:
- Compliance with legislation. In most countries, the professional income tax is mandatory for all citizens, including IT professionals. Additionally, failure to pay taxes can lead to severe fines and prosecutions.
- Financial responsibility. Regular payment of taxes helps individuals in the IT sector to build a credit and financial history, receive bank statements that confirm income, to obtain visas, which facilitates obtaining loans, mortgages, visas and other financial services.
- Protection of property and personal interests. Paying taxes is a prerequisite for receiving various government services and benefits, such as health insurance, pensions and other social guarantees.
When IT specialists have the right to use the professional income tax (PIT)
When an individual specialist in the IT field provides services using the Internet to other individuals, including individual entrepreneurs, companies, contacting them via the Internet, an individual may not register as an individual entrepreneur and not open a company, but register as a PIT payer, he is self-employed.
Here are the criteria set by the Belarusian Ministry of Taxes and Duties, according to which you can check whether an IT specialist has the right to work as a taxpayer of the PIT:
1. Types of activities
An individual performs one or more types of activities:
- Website development.
- Installation (configuration) of computers and software.
- Restoring computers after a crash.
- Repair and maintenance of computers and peripheral equipment.
- Learning to work on a personal computer.
2. Independent work
The specialist works independently and does not involve hired employees or contractors.
3. Remote work in relation to the customer’s location
The specialist works remotely, outside the location of the customer (its branch, another separate structural unit), territory or facility under the control of the customer.
4. Self-employment
The customer is not the employer of an IT specialist.
5. Using the Internet
The specialist must use the Internet to provide services, perform work and transfer the results to the customer.
An IT specialist must meet all the criteria. Otherwise, he will not be able to be a PIT payer.
Features of the professional income tax (PIT) in the IT sector
Features for an individual
1. An individual does not need to come to the tax office to register as a PIT payer.
You need to:
- Download the free application “Professional Income Tax” from the website of the Ministry of Taxes and Duties of Belarus.
- Note in the appendix that the activity type is suitable for applying the PIT.
- Generate receipts and invoices in it (if necessary).
The amounts in the application are generated in Belarusian rubles, even when payments are made in a foreign currency. Moreover, the currency is converted into Belarusian rubles at the exchange rate set by the National Bank on the date of receipt of professional income.
2. You can become a PIT payer not starting January 1 but at any time.
3. The grace period for using the PIT is until the receipt of income in the amount of more than 2,000 Belarusian rubles. Until an income of 2,000 rubles is reached, the IT specialist only prescribes the amounts in the application when generating checks and invoices, and taxes are not withheld from these amounts. During this period, an IT specialist is not formally self-employed, paying taxes and employed in the economy, unless he is employed or under a contract and similar agreements, as an individual (not self-employed or an entrepreneur).
4. PIT rates: 10% and 20%.
The 10% rate is applied as a general rule.
The 20% rate is applied to income that corresponds to the following criteria:
- The PIT payer received income from Belarusian companies and individual entrepreneurs.
- During the calendar year, the amount of such income exceeded 60,000 Belarusian rubles.
The PIT is paid at a rate of 20% from an amount that exceeds 60,000 rubles per year, as well as if the tax service determines that the income was received without forming a check in the PIT appendix.
5. The tax is calculated automatically by the tax authorities in the application every month. No later than the 10th day of the month following the reporting one, a notification arrives with the amount of tax and details for payment. You can pay the tax through the application or in another way by the 22nd of the month in which information about the amount of tax was received.
When an IT specialist cannot be a PIT payer
It is not necessary to perform work or provide services as a PIT payer when a company enters into a contract with an IT specialist, provides services, etc. the company:
- In which he works under an employment contract.
- In which the specialist was employed less than three years ago.
Features for companies and individual entrepreneurs who cooperate with the PIT payer in the IT field
- When an IT specialist is a PIT payer, companies and entrepreneurs who use his services in the IT field do not withhold income tax and social insurance contributions from payments to such a person. These amounts are included in the PIT, which an individual pays.
- It is optional to involve employees employed by the same company or left the company within the last three years as PIT payers.
- You can enter a service agreement with IT specialists or work without a contract. In any case, an individual must issue a check generated in the application or an invoice if such an agreement exists.
Contact us
If you have any questions related to the application of the professional income tax in relation to IT services, we will be happy to help you! Our many years of experience will help you resolve any disputes.
Phone and e-mail communication options are available for your convenience:
- +375293664477 (WhatsApp/Telegram/Viber);
- info@ambylegal.by.
