2023-34 / March 2023 Financial/Tax Bulletin
Find out the latest developments on tax regulation and be updated on regulatory changes along with their effects on your business through our tax bulletins. The important financial news of last month is briefly explained below.
We are glad to share these summaries with our clients and network. As a result of productive and comprehensive research, we present you the March 2023 bulletin.
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.
Earthquake Reliefs
The recent earthquakes have hurt us all. As such, there are many developments regarding reliefs.
- Easing of liabilities for those who are affected.
- Tax cuts for donations and aids provided.
- Precautions taken in the markets to contain the effects.
- Updated regulations in the energy sector.
- Easing of social security and insurance premiums.
Main Economic Indicators
The balance of payments statistics for December 2022 is announced by the Central Bank of Turkey Republic (CBRT).
- The current account recorded a deficit of USD 5,910 million, against a surplus of USD 3,525 million observed in the same month of the previous year, hence bringing the 12-month rolling deficit to USD 48,769 million.
- Click to view the announcement.
Turkish Statistical Institute announced inflation figures for January 2023.
- Consumer price index (CPI) increased by 55.18% annually and 3.15 monthly.
- Domestic producer price index increased by 76.61% on annual basis, by 1.56% on monthly basis.
- Click to view the announcement.
Ministry of Finance and Treasury announced the domestic borrowing strategy and debt statistics March – May 2023.
- Central Government Debt Statistics were published as well by currency, interest and instrument type.
- Click to view the domestic borrowing strategy.
Major Tax Issues
Tax declaration deadlines are approaching.
- Income tax returns for 2022 should be filed by the end of March.
- Taxpayers who are subject to income tax should file their returns electronically by the 31st of March.
- Corporate tax returns for 2022 should be filed by the end of April.
The earthquake has been declared as a force majeure.
- For taxpayers residing in Adana, Adıyaman, Diyarbakır, Gaziantep, Hatay, Kahramanmaraş, Kilis, Malatya, Osmaniye, and Şanlıurfa, force majeure clauses will be active between 06/02/2023 and 31/07/2023.
- Elazığ and Sivas (Gürün District) has been added to the list by a recent update.
Special Tax Treatment for Earthquake Zones
- Lodging services within the earthquake zones provided at no cost can be filed as such. All costs related to such services will be regarded as expenses for income and corporate tax.
- Fuel sales within the earthquake zones may be done without any documentation.
- Fuel may be delivered in portable containers without recording the identity number of the purchaser.
- Deliveries of prefabricated structures and containers are subjected to a VAT rate of 1%.
- Tax treatments for donations are being discussed by the Revenue Administration.
The exchange rates to be used for 2022 end of year transactions have been determined.
Companies are no longer subjected to withholding tax regarding transactions involving their own shares.
- Withholding rates for dividends assumed to be distributed to the shares held by the company itself have been set as 0%.
Communiques regarding taxation have been published.
- A general communique on corporate tax (serial nr. 21) has been published.
- A general communique on VAT application (serial nr. 45) has been published.
A communique draft has been prepared regarding the tax exemptions of the IPA 3 aid received from the European Union.
Social Security Issues
Social security premium payables, notifications, and declarations have been postponed due to the earthquakes.
The following healthcare providers are authorized to carry out work in temporary or mobile stations within the earthquake zones.
- Individuals
- Self-employed pharmacists
- Institutions
- Opticians
- Prosthetics and orthosis providers
- Hearing aid providers
- Dental prosthetic providers
The proposal regarding the age restrictions on retirement (EYT) has been passed by the Grand Assembly.
- An announcement has been made in the Official Gazette on the 3rd of March.
Banking & Finance
The Central Bank has lowered the interest rates.
- The award rate for weekly repurchase agreements is now 8.5%.
The Banking Regulation and Supervision Agency has postponed the liabilities of debtors based within the earthquake zones.
The Capital Markets Board has provided donation guidelines for publicly traded companies.
The Ministry of Strategy and Budgeting has published a 2nd communique on the spending and budgeting plans for 2023.
Institutions managing portfolios are subjected to higher equity requirements.
- Minimum equity requirements respective to assets under management (AUM) are as follows:
- AUM less than TRY 1B: Minimum equity of TRY 30M.
- AUM between TRY 1B and TRY 4B: Minimum equity of TRY 40M.
- AUM between TRY 4B and TRY 36B: Minimum equity of TRY 50M.
- AUM greater than TRY 36B: Minimum equity of TRY 100M.
The compliance deadlines for electronic payment systems have been extended.
The communique on precious metals and refineries has been amended.
- Refineries are required to be corporations. (A.Ş.)
- Refineries must have a minimum paid-in capital of TRY 34M.
- Refineries must have a minimum paid-in capital of TRY 50M to transact in the Turkish exchanges.
- Refineries must apply for a permit with a cost of TRY 8M to operate.
The Capital Markets Board has eased the process of share repurchases for publicly traded companies.
R&D and Incentives
A project based incentive has been provided for a cold-rolled aluminum plate production plant in Konya.
An industrial zone has been designated for energy specialization in Karaman.
Applications for organization project grants have started.
Feed grants will be provided to livestock producers.
Commercial Regulations
Amendments have been made regarding the purchasing and delivery of electricity.
The regulations on maritime tourism have been updated.
- The lodging capacity of yacht ports may not exceed 20% of the docking capacity, capped at 60 beds.
The monetary thresholds for e-commerce providers have been increased by 50%.
Insurance policies have been revised within the earthquake zones due to force majeure.
- All insurance policies expiring between the 6th of February and the 1st of May have been extended until the 1st of May.
- Unless salvaged, all insurance policies expiring between the 6th of February and the 1st of May will be automatically renewed.
- The premiums may be collected no earlier than the 1st of May.
- Insurance policies may not be revoked due to non-payments between the 6th of February and the 1st of May.
- For obligatory insurance policies, payment plans consisting of a minimum number of 6 installments must be offered.
- Additional premiums for late traffic insurance payments will not be charged.
Consumable alcohol regulations have been updated.
- Alcoholic beverages at the following volumes may not be imported, produced, or offered.
- Volume less than 5 cl.
- Volume more than 300 cl (excluding beer).
- Such consumables are barred from imports and production by the end of April, barred from wholesale by the end of May, and barred from retail sales by the end of June.
Other Issues
All foreign currency exchange transactions are required to be reported electronically by the authorized institution.
New regulations regarding medicine have been published.
- A directive is in place regarding the imports of medicine unavailable in Turkey due to shortages or licenses.
- A directive is in place regarding traditional herbal products.
Best regards,
Partners, Taxia
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