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One of our clients resolved to liquidate its subsidiary in Belarus. The company was operating since 2020, had one employee and mainly provided IT services to its parent company in Europe. During the liquidation process, a tax audit was performed and revealed a number of violations. This resulted in a large amount of additional profit tax, penalties and administrative liability.

Let us review a simple case. A foreign organization’s representative office terminates its activities in Belarus by decision of the head company. The representative office has a car that it plans to sell to a legal entity – resident of the Republic of Belarus (a dealer). Who is obliged to pay VAT, the seller or the buyer?