A.V. Shestak filed a complaint with the Constitutional Court to review the constitutionality of parts nine to twelve of paragraph 19 of Article 208 “Income exempt from personal income tax” of the Tax Code of the Republic of Belarus (Special Part), applied during the consideration of a civil case with his participation.
In his individual complaint A.V. Shestak indicated that the tax legislation in force from 2012 to 2017 provided for the exemption of income received from the sale of plant products from personal income tax without limiting the amount of income. At the same time, following the results of the desk audit conducted by the Ministry of Taxes and Duties regarding the compliance of expenses with income of the applicant for the period from 1 January 2012 to 30 April 2022, the tax authority calculated income tax on his income in the amount of ten percent of the amount of declared income exceeding 200 base units, extending the amendments to paragraph 19 of Article 208 of the Tax Code, which came into effect on 1 January 2022, to the previous period.
According to the applicant, the amendments to paragraph 19 of Article 208 of the Tax Code introduced by Law No. 141-Z of 31 December 2021 “On Making Amendments to Laws on Taxation Issues” violate his constitutional rights, since they established for him, as a taxpayer who lawfully applied the personal income tax benefit, an additional obligation to pay income tax on income received from the sale of plant products, if such are indicated as a source of income during a desk audit by the tax authority in accordance with Article 731 of the Tax Code.
A.V. Shestak believes that the contested provisions of this Law related to changes in the taxation procedure should not have retroactive effect.
Based on the results of the examination of all the case materials, the Constitutional Court in its decision recognised the interrelated provisions of parts nine to twelve of paragraph 19 of Article 208 and Article 731 of the Tax Code as inconsistent with Articles 7, 13, 44, 56, 58, 104 of the Constitution of the Republic of Belarus to the extent that, in violation of the principles of the rule of law and justice, they allow, in the course of the desk audit of the compliance of expenses with income, the imposition on an individual of the obligation to pay income tax on income received from the sale of plant products before 1 January 2022 during tax periods in which the said income was exempt from income tax in accordance with the procedure established by law.
In accordance with the decision of the Constitutional Court, the Council of Ministers of the Republic of Belarus shall, no later than three months after the adoption of this decision, submit to the House of Representatives of the National Assembly a draft law on making the relevant amendments to the Tax Code, guided by the provisions of the Constitution of the Republic of Belarus and taking into account the legal positions of the Constitutional Court set out in the decision.
Before the relevant amendments are made to the Tax Code, when applying the interrelated provisions of parts nine to twelve of paragraph 19 of Article 208 and Article 731 of the Tax Code, law enforcement bodies shall ensure compliance with the principles of the rule of law and justice.
The court rulings issued against A.V. Shestak on the basis of parts nine to twelve of paragraph 19 of Article 208 and Article 731 of the Tax Code, to the extent that the provisions contained therein are recognised by the decision of the Constitutional Court as not conforming to the Constitution of the Republic of Belarus, shall be reviewed in accordance with the established procedure.