2023-100 / November 2023 Financial/Tax Bulletin
Find out the latest developments on tax regulations and be updated on regulatory changes along with their effects on your business through our tax bulletins.
Let’s briefly start with the headings and then examine the details. We will share information about Turkish economy in general, and the latest figures in labor, inflation, growth, main tax developments, social security obligations, banking and financial issues, R&D and incentives, and other issues below.
Main Economic Indicators
The balance of payments statistics for August 2023 is announced by the Central Bank.
- The current account recorded net deficit of USD 619 million. Gold and energy excluded current account indicated net surplus of USD 6,149 million.
- Goods deficit recorded USD 7,104 million.
- Click to view the announcement.
Turkish Statistical Institute announced inflation figures for October 2023.
- Consumer price index increased by 39.39% annually and 1.94% monthly.
- Domestic producer price index increased by 61.36% annually and 3.43% on monthly basis.
- Click to view the announcement.
Ministry of Finance and Treasury announced the domestic borrowing strategy and debt statistics for November 2023 – January 2024.
- Central Government Debt Statistics were published as well by currency, interest, and instrument type.
- Click to view the domestic borrowing strategy.
Major Tax Issues
The revaluation rate for 3Q2023 advance corporate tax has been set as 34.80%. The rate is expected to be announced as 58,46% for the whole year.
The decision on additional motorized vehicle tax by the Supreme Court has been published on the Official Gazette.
- The Court has approved the tax amnesty laws, and did not find any unconstitutionality.
Communiques regarding the tax procedure law have been published.
- Those are about the digital tax tool which enables more than 100 tax application online and other e-tools on tax, e-invoicing in the electricity cars charge stations.
The law on crypto assets is on its way to the Assembly.
- According to the Minister of Finance, Türkiye should bring the law soon to exit from the gray list.
Special treatment of indebted / technical bankrupt companies has been extended until 2025.
- The accommodations for default and bankruptcy proceedings have been extended by a year.
- In addition to FX rate losses, the costs of leases, depreciation, and operational costs can be used in calculations until 2024 at a rate of 50%.
The communique on inflationary adjustments is drafted. It will be executed this year.
- The following articles are present within:
- Principles of the application
- Adjustment only of the balance sheet
- Differences between the 2023 and 2024 applications
- Those who may not apply the adjustments
- Method to be utilized by those who use special financial periods
- List of assets to be adjusted
- List of assets not to be adjusted
- Designation of fictive financing expenses
- Status of revaluation premiums added to capital before 2024
- Equity accounts to be present in the balance sheet after the adjustments
- Accrued amortization, in-progress investments, goods priced by the government, status of advance payments, assets subject to financial leasing, backup funds, merging premiums
- Book entries to be accounted
- Adjustments for halts, liquidations, mergers, acquisitions, etc.
- Special cases for adjustments after 2024
- Status of specialized commerce activities
- Timing of adjustment records
- Preparation of the balance sheet
- Resale of assets
- Adjustment values for liability accounts
- Penalties for not applying adjustments
12th Development Plan (2024-2028) is accepted in the Parliament.
New developments regarding taxation are happening globally.
- Spain – Taxation of overseas stock options awarded to foreign workers
- Greece – Withholding exemptions for some payments from foreign entities to their Greek branches
- Singapore – Tax regulations on family investment trusts
- Luxembourg – Updates on the “Investment Tax Credit” program
- Luxembourg – Updates on the legal status of investment funds
- Germany – International taxation proposals which include regulations benefitting the taxpayer
- Canada – Mandatory declaration requirement to improve transparency in taxation
- Luxembourg – Proposals on minimum corporate tax application
- Switzerland – EU agreement regarding overseas employment
- Italy – Supreme court ruling on capital gains tax
- Netherlands – Discussions on the proposed additional tax on dividends for 2024
- EU Board proposal on easing the refunds of withholdings within the EU
- OECD publication on Country Based Reporting evaluation, vol. 6
- OECD Pillar I and Pillar II discussions
- OECD publication on carbon pricing
- Turkey – Renewal of the MLI agreement
- Turkey – Approval of DTT’s signed by Cambodia, Sri Lanka, Kongo, Senegal, Nigeria, and Sierra Leone
Banking & Finance
The Central Bank has published changes on regulations and communiques regarding payment systems.
- New requirements for payment systems and digital finance institutions regarding provided additional services, stock transfers, and holding of funds.
- Digital wallets have been defined in the regulations.
- New regulations on NFC protocols as described in the communique.
- New regulations on data transfers for international institutions.
New financial instruments regarding the real estate sector are being offered.
- Project based real estate funds are coming.
The Ministry of Treasury and Finance has published a report on the realization of central administration budget.
Capital Markets Board is starting to utilize the Electronic Application System.
The Central Bank has hiked the interest rates.
- The weekly repurchase agreement award rate is increased to 35%.
- Discount rate for bills less than 3 months to value date is 35.75%.
- Advance rate is 36.75%.
The Central Bank has eased some regulations to allow for more effective market dynamics.
R&D and Incentives
Exemptions for Angel Investors
- Real persons with full taxpayer statuses may exempt 75% of the value of their participation shares held in full taxpayer corporations from their annual tax returns.
- Shares must be acquired after the date of this ruling.
- Shares must be held for at least 2 years.
- This exemption is applied as 100% if the corporation is involved in a research, development, or innovation program as incentivized by the Ministry of Industry and Technology.
Free internet, telephone, and computer stimulus for university students.
Commercial Regulations
The “AirBnB Law” has been enacted.
- Short-term rentals are subjected to regulations, licensing, and taxation.
- All the neighbors should give consent to rent apartments by Airbnb.
KYC requirements are set for sales of real estate and motorized vehicles.
The Energy Markets Regulatory Board has published a methodology on pricing for blending.
Climate and Environment
Urban Transformation Administration has been formed.
BDDK (BRSA) announced a Guide on Green Assets.
Best regards,
Partners, Taxia
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