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Кey legislative changes related to life sciences business in Belarus

25 October 2019

Law firm “REVERA” hereby kindly provides you with the review of the key legislative changes that may impact the life sciences business and industry in Belarus. The reviewed period: October 2018 – March 2019

 

Key legislative changes

Main changes

Brief explanation

  1. 1.  

A new procedure for registering drug prices has been established

As from January 1, 2019, only those medicines are allowed in Belarus for which a maximum manufacturer’s price has been registered. This rule applies to an exhaustive list of medicines for oncological and cardiovascular diseases (37 international generic names including melphalan, medroxyprogesterone, pegaspargase, etc.). The procedure for price registration have been established by Resolution of the Council of Ministers № 776 dated October  31, 2018.

The Ministry of Health is the registering body. For a price to be registered, an applicant shall furnish information on ex-factory prices in reference countries, namely: in Armenia, Bulgaria, Hungary, Kazakhstan, Kyrgyzstan, Latvia, Lithuania, Moldova, Poland, Russia, Romania, Czech Republic, Estonia and the production country.

This information will be used to determine the maximum sales price. The Instruction on maximum sales price calculation was approved by Resolution № 83 of the Ministry of Antimonopoly Regulation and Trade dated November 19, 2018. All prices will be registered in Belarusian roubles.

  1. 2.  

A list of medicines to be mandatory contained in pharmacies was renewed

Such a list was approved by the Resolution № 92 of the Ministry of Health dated December 10, 2018.

  1. 3.  

Some changes to the regulated maximum ex-factory prices of Belarusian manufacturers were made

Last changes to the Resolution of the Ministry of Health № 137 of September 07, 2012 regulating this issue entered into force on January 13, 2019.

  1. 4.  

Changes to the Code of the Republic of Belarus on administrative offenses were made

The current version of the Code of the Republic of Belarus on administrative offenses of April 21, 2003 № 194-З entered into force on January 01, 2019.

It includes new administrative penalties for unfair competition and other violations of antitrust laws.

  1. 5.  

Annual plan of public procurement of medical products for 2019 was published

Such a plan was approved by the order of the Ministry of Health № 250 of February 28, .2019.

  1. 6.  

Annual Republican Formulary of Medicines for 2019 was published

Such a formulary was approved by the Resolution of the Ministry of Health № 6 of January 15, 2019.

The formulary is used while planning state public procurement of medicines, as well as for prescribing medicines for patients covered by reimbursement procedures.

  1. 7.  

New edition of Tax Code of the Republic of Belarus entered into force on January 01, 2019

Tax Code was completely redrafted. The main changes which may effect the life sciences business are as follows:

  • “Business purpose” concept. Tax Code elaborates on the “business purpose” concept in Belarusian tax legislation. Thus, if the main purpose of a business transaction is:(1)non-payment / partial payment of taxes; and /or (2) tax offset / tax refund, then the tax base for such transaction is subject to adjustment based on the results of a tax audit.
  • Criteria for recognition of related parties are expanded. Tax Code introduces the following new criteria for the parties to be recognised related: companies owned by shareholders-individuals that are related parties and hold at least 20% of the shares in these companies; companies owned by the same beneficial owner.
  • Significant changes in transfer pricing rules, in particular: the list of controlled transactions has been revised; control thresholds are significantly increased. It means that Belarusian companies belonging to multinational groups should prepare separate transfer pricing documentation completed in accordance with the Belarusian rules in addition to e.g. the OECD Master / Local file; some taxpayers are entitled to enter into Advance Pricing Agreement (APA) with the Ministry of Taxes.
  • Permanent establishment. Tax Code generalises definition of fixed place of business which is a step to harmonising Belarusian permanent establishment (PE) regulations with the OECD approach used to draft the majority of DTTs, including those signed by Belarus.

 

 

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