2024-36/ Taxademy Newsletter (June 2024)
No : 2024-36
Date : June 5th, 2024
Subject : Taxademy Newsletter (June 2024)
Find out the latest developments on tax and related regulations and be updated on recent changes along with their effects on your business through our monthly tax bulletins.
Ministry of Trade’s Draft Circular on inflation accounting for firms about the capital and reserves, amendment in some tax incentives and exemptions especially capital gain taxation on immovables, minimum corporate tax in line with Globe rules, changes in the Commercial Law, Crypto Assets Law in the Parliament, increased interest rates for taxes, new DTT with Korea are the main items.
Major Tax Issues
Pillar II will be coming to the Parliament soon.
- The Revenue Administration has been working on the Draft Law and it is ready.
New Double Tax Treaty between Korea and Türkiye is published.
- This new Treaty signed in 2021 will replace the previous Treaty signed in 1983. It is in line with the recent OECD tax rules and will be effective in 2025. It is in Turkish, Korean, and English language and you can review them all.
Taxia held a seminar on “inflation accounting in Türkiye” with Dutch Business Association.
Inflation Accounting is not made in first provisional Tax Period in Türkiye.
- The Ministry of Finance has the power to postpone it for the provisional tax seasons. Inflation adjustments will be in the second and third quarter if not changed and annual basis for FY24.
- The President has power to revise the thresholds as well if needed.
The Draft Circular on inflation adjustment was not published yet by the Ministry of Trade.
- Draft Circular is explaining the financial tables to be considered in different cases such as profit distribution, capital increase and capital reserves to be converted to the capital.
- Banks are not in the scope of this Draft. It is not published yet for a long time.
Minimum equity requirements for the companies should be adjusted until 2026.
- With a Presidential Decree published November 2023, the companies to be incorporated after January 1st, 2024;
- Corporations (Joint Stock) require a minimum capital of TRY 250k.
- LLCs require a minimum capital of TRY 50k.
- Pre-existing companies are not required to comply with the new limits. But according to the Ministry’s announcement, it is suggested that the companies increase their capital to the minimum amounts to strengthen the equity positions.
- Those pre-existing companies having low capitals should increase their capital until 2026. According to the changes in Commercial Code with the Law Nr. 7511, no meeting quorum will be needed in general assembly meetings to increase the capital. If not increased, the companies will be deemed to be dissolved.
- Ministry of Trade can extend the deadline for 2 years (1+1 years) from 2026.
Interest rates for tax are increased.
- Monthly tax interest rate for late accrual and payment will be 4,5% monthly basis.
- The previous rate was 3.5% and new rate started to apply May 21st, 2024.
- This rate is set by the President, and has historically varied between 1.6% and 15%.
Deferment interest rate has been increased to 48% annually.
- The previous rate was 36%.
- The new rate is effective from May 21st, 2024.
The legal interest rate has also been increased.
- This rate, which has been applied as 9% for many years, has been redetermined as 24%.
- The new rate is valid as of June 1, 2024 for related transactions defined in the Law.
- The rate change was published in the Official Gazette dated May 21.
Crypto Assets Law accepted in Plan & Budget Commission in the Parliament.
- We have announced that “The law on crypto assets is on its way to the Assembly.” in our November Tax Newsletter. According to the Minister of Finance, Türkiye should bring the law soon to exit from the gray list.
- The Draft Bill Amending the Capital Markets Law numbered 6362, also known as the Draft Bill on Crypto Assets (Draft Bill), was submitted to the Grand National Assembly of Turkey on May 16, 2024.
- The Bill aims to regulate the operations of crypto asset service providers (CSPs), the activities of crypto asset platforms, the custody of crypto assets, and the buying, selling, and transfer transactions of crypto assets that can be conducted by individuals residing in Turkey on these platforms. It also seeks to establish regulations for CSPs to obtain permission from the Capital Markets Board (CMB) to operate and function, ensuring that the principles and rules they must adhere to during their activities will be issued by the CMB based on articles to be added to the Capital Markets Law.
- The Bill was accepted in the Plan and Budget Commission in one meeting and the Commission Report will be published soon and will come to the General Assembly.
- You can read more about the law in an expert’s blog by Srp-Legal.
Tax record holders will be announced every year in August.
The Electronic Ledger Communiqué, which was in draft form for a long time, has been published.
- With the Communiqué published in the Official Gazette dated 21/05/2024, important regulations were made regarding the electronic ledger application.
Banking & Finance
The regulation regarding the establishment of securities has been abolished.
Public Savings and Efficiency Package was announced.
BRSA Annual Activity Report 2023
- In line with the transparency and accountability principles of the Banking Law, the relevant authorities, and the public "BRSA Annual Activity Report 2023" prepared for informational purposes has been added to the website of the Institution.
Press Release on Publication of FX-Protected Deposit Statistics
- The statistics was published on Friday, 31 May 2024 in the Electronic Data Delivery System (EVDS), with the “FX-Protected Deposit and Participation Accounts” subheading under Monthly Money and Banking Statistics.
- “DDKKM – Real Persons”, “DDKKM – Legal Persons”, “DDKKM – Total”, and “TRY KKM” balances are presented as separate series. DDKKM balances will be tracked in billion USD equivalent of convertible FX-/gold-denominated original stock balances, while TRY KKM balances will be tracked in billion TRY.
R&D and Incentives
Draft Communique regarding with “Local Production” is ready.
- Local and national products can be provided “price advantage” in public tenders in Türkiye.
- It is understood from the Draft that there is a need to activate the domestic goods certificate application to ensure the development of the domestic industry through public procurement in the ongoing system with the current Communiqué dated 2014.
- According to the Statistics there are 168.263 industrial firms in Türkiye and 15.536 “domestic goods certificate” is prepared for 4.393 firms in 2023 in Türkiye.
Commercial Regulations
Amendments in Commercial Code is accepted in the Parliament.
- In addition, the “capital increase adjustment till 2026” explained in Tax chapter above, there are important changes in Turkish Commercial Code with a Law nr. 7511.
- The obligation to elect the chairman of the board of directors every year is abolished. So, the “3 years management period” will be for both the Board and Chairman with this revision.
- A new mechanism is being established for the board of directors to meet even if the chairman does not want it. This used to be a problematic area to gather the Board sometimes.
- The non-delegable duties and authority regarding the appointment and dismissal of the company's branch managers by the board of directors are narrowed. It was an important issue for the banks and firms having branches throughout the country.
- Cooperatives are given additional time to log in to KOOP-BIS (Cooperative Information System). As there are 35.000 cooperatives in Türkiye and only %10 of them finished the logging procedure to the new information system deadline are extended for 2 years.
The Ministry of Commerce started to audit IBAN rental advertisements.
The regulation on “Advertising on Commercial Vehicles” has been revised.
The amendments to the Mining Law were accepted by the Turkish Grand National Assembly and became law after being published in Official Gazette.
The Free Trade Agreement with Malaysia was published.
- Especially the professions that are restricted to be practiced professionally in countries and the measures taken to liberalize trade between the two countries are discussed in detail.
- This Agreement is regulated on trade in services in addition to the main Agreement signed in 2014. The agreement includes market entry restrictions, rules, national treatment restrictions and additional commitments, if any, in business sectors.
Miscellaneous
Short term lease regulation is revised.
- Airbnb Law application was extended till June for landlords to be in line with the rules. With a new Communique some technical applications are revised for this business.
- You can access our article regarding the Airbnb Law by clicking on the
Constitutional Court published important decision on “licensee fee” for e-commerce firms.
- The Court did not find it unconstitutional to charge high-rate tax-like fees (electronic license fee) included in the Law on electronic commerce. According to the Law before the Court, it is envisaged that the electronic commerce intermediary service provider will be charged a fee between 0,3% and 25%, increasing according to the net transaction volume of the electronic commerce intermediary service provider in a calendar year.
Consumer Price Index for May 2024 as announced by TURKSTAT;
- Consumer price index (CPI) increased by 75.45% annually and 3.37% monthly.
Growth for 2024 Q1 as announced by TURKSTAT;
- Gross Domestic Product (GDP) increased by 5.7% in the first quarter of 2024.
Best regards,
Taxademy
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