The Law on the Amendment of Tax Laws and Certain Laws and the Decree Law No. 375 (“Law”) published in the Official Gazette dated August 2, 2024 and numbered 32620 regulates many issues related to tax law, particularly Corporate Tax, VAT and Income Tax. Some of these regulations are analyzed below:
– According to the first article of the Law, the phrase “in all kinds of payments,” in Article 22/A (“Transactions that cannot be made before the public receivable is paid and the responsibility of those who make transactions”) of the Law on the Procedure for Collection of Public Receivables (date: 21/7/1953, No. 6183) has been amended as “in all kinds of payments (including payments to be made upon court decisions and payment or execution orders of enforcement offices)”. With this amendment, the scope of the payments has been expanded.
– According to the second article of the Law, the title of the third section of the second part of the Income Tax Law (date: 31/12/1960, No. 193) titled “Exemptions and Exceptions” has been regulated as “Other Exemptions and Exceptions”, and Article 17 that was abolished before has been rearranged with its title.
According to the article titled “Wage exemption in benefits provided to service personnel by giving share certificates”, according to the criteria determined by the Ministry of Industry and Technology, income tax exemption will be provided at different rates according to the period of holding the share certificates, which are given free of charge or at a discount to the personnel working in enterprises that have the qualifications of technoentrepreneurship companies and are considered as to be wages.
The rates are arranged in a way to vary according to the period of time the shares are held by the employees. If the shares are disposed of within three full years, the entire tax will be collected from the employer, 75 per cent of the tax will be collected from the employer if the shares are disposed of between four and six years, and 25 per cent of the tax will be collected from the employer if the shares are disposed of between seven and twelve years, and no tax loss penalty will be applied.
The limitation period for the taxes not levied starts from the beginning of the calendar year following the date of disposal of the shares. The article also states that the Ministry of Treasury and Finance shall be authorised for the implementation of the article.
– With Article 9 of the Law a new section to Article 344 of Law No. 213 has been added and the scope of tax loss penalty has been extended.
Causing to tax loss by carrying out commercial, agricultural, or professional activities without the knowledge of tax office, even though a tax liability must be established according to tax laws, without complying this obligation is added to situations that mentioned in Article 344.
In this case, tax loss penalties that would be applied according to the section one, two and three will be applied by increasing 50%. Same increase will be applied to tax loss penalties because of assessments that will be informed later regarding same tax type and term.
– Provisional article 35 is added to Law No.213 by Article 16 of Law No.7524
“PROVISIONAL ARTICLE 35- If tax settlement is requested however the date of settlement have not been fixed before the date that this article would be in force or the date fixed but meeting for settlement did not made yet or the date postponed because of various reasons or settlement request period did not passed regarding taxes or penalties article 112, article 376, additional clause 1, 7, 8, 9 and 11 will be applied with their previous versions that before the amendment.”
According to this article, if settlement is requested before this and not started yet to this settlement, the versions of the aforementioned articles before the amendment will be applied.
With Article 51 of furtherly mentioned law, some various changes are made in Article 1 of Law No.5597 “Law On Departure Fee and Amendment Law On Various Laws”:
i. Departure fee that in the first section of Article 1, is increased from 50 Turkish liras to 500 Turkish liras.
ii. The following sentence is added to continuation of the first sentence of Article 1 section one:
“This fee would be applied by amount that fixed with revaluation rate pursuant to the repeated Article 298 of the Tax Procedure Law dated 4/1/1961 number 213 every year regarding to former year. For the fees assesed in this way, fractions up to 10 Turkish liras will not be considered. However, in departures that made until the end of the tenth day of January of the year that applying fixed fee to this extent, the payments that made according to valid amount from the end of previous year difference is not topped up.
iii. Lastly, “this amount” phrase is changed to “fee that situated in this clause or fixed amount of this fee by applying revaluation rate”. According to this amendment President will be authorized to change fee that situated in this clause or new fixed amount of this fee by applying revaluation rate up to three times or reduce it to zero.
– Article 3 of the Law amended the abrogated Article 69 of Law No. 193:
This provision, which was introduced for those who are income taxpayers due to their commercial or professional activities, allows these taxpayers to determine their revenues at specific times of the year and to be invited to explain if there is a difference exceeding 20% between this determination and their declarations, and to levy tax on the determined revenue if the explanation is not sufficient. This regulation will also apply to corporate taxpayers. Details regarding the amount of revenue are provided in subparagraphs a, b and c of paragraph 3 of the Article.
– Article 23 of the Law added the Proivisional Article 45 to Law No. 3065:
Within the scope of the protocol signed between the public administrations with general budget and foreign state institutions and organizations in the places considered as disaster areas, upon the earthquake disaster that occurred on February 6, 2023, as of 1/1/2024 Deliveries and services made to foreign state institutions and organizations regarding the construction of immovable properties such as housing, workplaces, schools, student dormitories, hospitals, places of worship, culture and art centers, libraries to be donated to public administrations with general budget, and the delivery of residences to be donated to foreign state institutions and organizations within the scope of the protocol signed between public administrations with general budget and foreign state institutions and organizations in these places are exempted from VAT until 31/12/2025.
– With Article 24 of the Law, the first sentence of subparagraph (a) of the second paragraph of the provisional Article 3 of the Free Zones Law No. 3218, which starts with the phrase “The earnings of the taxpayers engaged in production activities in free zones from the sale of the products manufactured in these zones”, has been amended as “The earnings of the taxpayers engaged in production activities in free zones from the sale of the products manufactured in these zones abroad”. Accordingly:
Prior to Law No. 7524, all of the profits derived from production activities in free zones were within the scope of corporate tax exemption, regardless of whether the products were sold domestically or internationally. With Article 24, solely the earnings derived from the sales made abroad by the corporates operating in free zones will be within the scope of corporate tax exemption; the exemption provided for domestic sales has been abrogated.
– With Article 37 of the Law; an additional article has been added to the Law No. 5520 to follow its article 36 regulating “Minimum Top-up Corporate Income Tax and Provisional Articles”:
According to this provision; the earnings of the subsidiaries of multinational business groups whose annual consolidated revenue in the consolidated financial statements of their
