2024-55 / Tax Newsletter (September 2024)
Please find our summary with respect to the latest developments on tax regulations aiming to provide you an update on the recent changes along with their possible effects on your business.
There is a new Omnibus Tax Law that introduces the “minimum corporate tax” in line with Globe rules for MNE’s and local Türkiye based firms. Ministry of Finance announced the Draft Communiques regarding the recent amendments in tax legislation.
Inflation accounting is another hot subject in Türkiye. 1,5 million taxpayers are out of the scope.
Major Tax Issues
Small firms are not subject to inflation accounting in Türkiye for provisional tax periods in 2024.
- It was confirmed before by the Ministry of Finance that the inflation adjustment would be prepared for the second provisional tax period, despite some criticism from accounting and business professionals and NGOs in Türkiye.
- After the heavy pressure on the Government, the Ministry of Finance published an amendment stating that small firms with less than 50 million TL gross sales are not supposed to prepare financial tables with inflation accounting.
Ministry of Finance announced the Draft Corporate Tax Communique regarding the recent amendments in tax legislation.
- Different tax legislations and amendments were made in recent years starting from 2021. The Revenue Administration has prepared the Communique including 7 tax omnibus law.
- Explanations on important regulations such as different tax rates in corporate tax, reduced rate applications, free zone tax exempted earnings, taxation of investment funds and partnerships, minimum corporate tax application, partial division and real estate sales earnings exemption, discount application for some services provided abroad from Türkiye, and 50% exempt dividend income obtained from foreign affiliates meeting the conditions can be found in this Communiqué.
- Important changes are summarized below in this Corporate Tax Communique:
- Minimum corporate and income tax implementation will start in 2025.
- In free zones, corporate tax exemption will be only applicable for exports income.
- Pillar II will be applied in Türkiye. A new Chapter has been added to the current Corporate Tax Code in Türkiye.
- Türkiye chooses the income inclusion rule (IIR) and the undertaxed profits rule (UTPR). Also, a qualified domestic minimum top-up tax (QDMTT) is used.
- There will be another Draft Communique for the Pillar II application.
- The tax-free period for REIT/REIF is coming to an end, and the requirement to distribute 50% of the profit is mandatory, with withholding tax to be collected accordingly.
The list of taxpayers who declared the most tax for the 2023 taxation period has been announced.
New Tax Communiques are on the way regarding tax penalties, rental payments, and other payments by banks, e-invoices, e-ledgers, and e-applications.
New Draft Tax Communique has been announced for income tax in Türkiye.
- Communique explains new “stock options tax exemption” for technology companies.
- Stock options are defined in Turkish Tax Law for the first time with a possible tax exemption but with unexpectedly though conditions.
Banking & Finance
The Monetary Policy Committee has decided to keep the policy rate (the one-week repo auction rate) constant at 50 percent.
- You can find the details by clicking the link.
Central Bank of the Republic of Türkiye (CBRT) signs Memorandum of Understanding with Saudi Central Bank.
The BRSA (BDDK) has prepared Draft Communiqués regarding the display of inflation accounting-based items in financial tables.
The CMB (SPK) has published its announcement regarding the purchasing power of the money in the financial statements to be prepared by the issuers.
R&D and Incentives
Ganfeng Lithium and Yi̇ğit Akü Announce USD 500 Million Battery Investment in Türkiye
- Ganfeng Lithium Group, a global leader in lithium battery production with a market capitalization of USD 26 billion on the Hong Kong Stock Exchange, has announced a significant investment in Türkiye. The company will establish a joint venture with Yiğit Akü, one of Türkiye's largest lead-acid battery manufacturers, to produce lithiumion batteries. The initial investment for the project is set at USD 500 million.
Commercial Regulations
The Ministry of Trade has made an important regulation to ensure market order in the automotive sector and to prevent consumer grievances.
- A new regulation has been published on this subject. The secure payment system has been made mandatory to prevent fraud in second-hand vehicle sales with the Secure Payment System.
Miscellaneous
GDP grew by 2.5 percent in the second quarter of 2024.
The Medium-Term Program (MTP) covering the 2025-2027 period has been announced.
Best regards,
Taxademy.
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