Hybrid Electric Vehicles in Businesses: VAT and Investment Deductions in 2026
The previous version of Decree No. 92 “On Stimulating the Use of Electric Vehicles” provided for tax incentives for electric vehicles and charging stations until December 31, 2025.
Some of the previously established tax incentives have been extended by Decree No. 428 until December 31, 2028.
However, from January 01, 2026, no hybrid vehicles are eligible for the tax benefits established by Decree No. 92 in the new edition.
What should you pay attention to?
Investment tax deduction for hybrid electric vehicles in 2026
Starting from January 1, 2026, the possibility to apply 100% investment deduction is no longer available for hybrid electric vehicles and their restoration costs, and no specific provisions are established for applying the investment deduction to charging stations. When applying the investment deduction, the provisions of the Tax Code must be followed.
However, transitional issues should be taken into account. If a hybrid electric vehicle was purchased before 2026 and depreciation began accruing before January 1, 2026, then a 100% investment deduction may be applied in the Republic of Belarus provided other conditions are met. This is because the two-year period for exercising the right to an investment deduction is calculated from the month the depreciation began accruing, and the provisions of Decree No. 92 in its old version were in effect on that date without restrictions.
VAT on hybrid electric vehicles in Belarus
Hybrid electric vehicles and automotive components for the production of hybrid electric vehicles imported into the Republic of Belarus are subject to VAT at a rate of 20%.
Turnover from the sale of hybrid electric vehicles in the Republic of Belarus is subject to VAT at a rate of 20%.
Regardless of the date of purchase (import) of hybrid electric vehicles, VAT at a rate of 20% applies to sales of hybrid electric vehicles:
- shipped from January 01, 2026;
- transferred under financial lease (leasing) (including those transferred before January 01, 2026) – in the part attributable to the contractual value of the leased item as part of the lease payments due for periods after January 01, 2026.
Therefore, for VAT exemption purposes, it does not matter when the hybrid electric vehicle was purchased, but it does matter when it is sold or for what period the lease payments are calculated.
Example
In 2025, the leasing company leased a hybrid electric vehicle with an option to purchase. The agreement stipulates monthly lease payments.
The leasing company is not entitled to apply the VAT exemption to lease payments in respect of the contractual value of the leased hybrid electric vehicle relating to 2026 and must calculate VAT at a rate of 20%.
It is also recommended that you review the Letter of the Ministry of Taxes and Duties of the Republic of Belarus No. 2-1-13/04157 dated December 30, 2025 “On the calculation of VAT and income tax in connection with the adoption of the Decree of the President of the Republic of Belarus No. 428 dated December 11, 2025”, which contains a number of practical situations.
This publication is for informational purposes only and should be used as a general guide only. Before taking or refraining from any action based on the information in this publication, you should seek professional advice.
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