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2024/80 Tax Newsletter in Türkiye (December 2024)

Merry Christmas! Hope enjoyed 2024 and you will have a wonderful year ahead.

 

Please find out 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.  

 

The New Omnibus Tax Law and related legislations and inflation accounting are the main subjects for the second half of the year. Tax Communiques regarding with different tax procedural applications including new withholding tax on e-commerce and e-ledger application for the firms are on the way. Minimum wage is increased only %30 although the official inflation rate is way higher than this.

 

e-ledger will be a must for all companies starting in 2025 but with a new exception. e-invoice limit will be decreased and there will be no paper invoice in Türkiye in 2026. New minimum capital for companies will have to be adjusted as well in 2025.

 

Tax increases and tax exemption rate revisions are still on the table. Withholding tax on dividends is increased while “capital gain tax exemption” for holding shares sales is reduced to %50. FY25 budget is approved in the Parliament. Tax estimation is 11 trillion 138,8 billion TRY.

 

Major Tax Issues

 

Tax exemption rate is reduced from %75 to %50 for “capital gains” for the holding companies.

 

  • This new rate started to apply in November 27th, 2024. There are 3 conditions to meet.
  • The “sold shares” should be held at least for 2 years in firms’ balance sheet.
  • Companies must collect the sales amount in 2 years.
  • Exemption amount should be reserved in a special fund in balance sheet without moving.


Turkish Tax Administration updates digital tax services with new tools and applications.

 

  • There are important tax audits recently which are chosen by those systems and we need to be prepared new AI tools and “robotic tax inspectors”
  • It seems that tax authorities are working on it for tax audit and compliance.


Revenue Administration published “Mutual Agreement Procedure Guideline” recently.

 

  • It is explained how to apply and proceed for the firms in this guide in detail.
  • Within the scope of the "Mutual Agreement Procedure" of the Double Taxation Agreements, taxpayers can apply to the Turkish Tax Authority or the relevant authorities of other countries when they believe that they have been or will be taxed in a manner contrary to the provisions of the taxation agreement.
  • You can click to read the Guide in English.


New Draft Tax Communique is published for “withholding tax on e-commerce” in Türkiye.

 

  • Tax rate is defined as %1 on e-commerce activities.
  • This new “e-commerce tax” will be applied to online service providers, e-commerce operators, electronic commerce service providers, and marketplace sellers.
  • The President has the authority on this matter to define the rates. This is not a final tax. It is allowed to be credited on the annual corporate or income tax.
  • Draft Communique number 330 is sent to the President for approval and publishing with revisions comparing to the first version dated November 4th, 2024.


Withholding tax is increased for “dividends” in Türkiye after 3 years.  

 

  • Withholding income tax rate is set as %15 instead of %10. You can double check as well if there is any lower tax rated defined in double tax treaties.
  • Domestic participation exemption is kept for the Turkish resident companies.


Small firms (revenue wise) are not subject to inflation accounting in Türkiye for provisional tax periods in 2024. There is a huge expectation by those firms to be scoped out for the year end as well.

 

  • The Ministry of Finance published an amendment stating that small firms having less than 50 million TL gross sales are not supposed to prepare financial tables with inflation accounting for the second and third provisional tax quarters.
  • But all companies will have to adjust the balance sheet for the year end. This is very important to note that the exemption is only for provisional periods and not for the whole year.
  • New Tax Law is accepted in the Parliament easing the inflation accounting for some firms. But there is no clear guidance / secondary legislation yet.
  • Scope in the inflation accounting is getting narrow. The government owned enterprises are out of scope. Broke firms and companies in liquidation process are not subject to the inflation accounting with this new amendment. Investment amounts in balance sheets will be adjusted with a different “special fund method” to give a tax effect extension for those firms/accounts.
  • Inflation adjustment gains related to the ongoing investments will be recognized as income in installments after the completion of the investment with this amendment. The Ministry of Finance is expected to direct a “clear guidance” on this issue soon.


New Tax Communiques are published regarding tax penalties, rental payments, and other payments by banks, e-invoices, e-ledgers, and e-applications.

 

  • Rental payments are to be paid via banks regardless of the amount of rental type.
  • Payment exceeding TRY 30.000 will be paid via banks, non-compliance will be punished. Tax Administration gives some exemption for tourism sector to comply with this rule.


Banking & Finance

 

TMSF has increased the insurable amount from 650 thousand TL to 950 thousand TL.

 

The Monetary Policy Committee has decided to reduce the policy rate.

 

  • The Monetary Policy Committee (the Committee) has decided to reduce the policy rate (the one-week repo auction rate) from 50% to 47,5%.
  • The Committee has also decided to adjust the monetary policy operational framework by setting the Central Bank overnight borrowing and lending rates 150 basis points below and above the one-week repo auction rate, respectively.


The interest cost of rediscount credits for export and foreign exchange earning services has been reduced by CBRT. 

 

  • The CBRT has updated the rule that determines the discount rate for rediscount credits for export and foreign exchange earning services.
  • The new rule stipulates that the interest cost of rediscount credits will be a ratio of the policy rate. The new interest cost of rediscount credits will be applied as 29.93%.


CBRT announced a framework to support the decline in the FX-protected deposit (KKM) balance. The Central Bank of the Republic of Türkiye has decided to take the following steps:

 

  • The total target for KKM accounts’ transition to TRY and renewals has been reduced from 70% to 60%.
  • The minimum interest rate applicable to KKM accounts has been reduced from 70% to 50% of the policy rate.
  • The remuneration of reserve requirements maintained for KKM accounts has been terminated for new KKM accounts or for those to be renewed.

 

The BRSA (BDDK) has prepared Draft Communiqués regarding the display of inflation accounting-based items in financial tables.

 

  • Those legislation are still in BRSA’s website and not published yet.
  • BRSA gives an extension for the banks for inflation accounting as well for FY25.


MASAK has published important regulations.

 

  • The Financial Crimes Investigation Board (MASAK) has made comprehensive changes to the Regulations and Communiqués regarding the money laundering crime investigation, measures, compliance program and e-notification system for the related companies.


R&D and Incentives

 

There are “Mutual Investment Promotion Agreements” with 3 countries on the agenda of the TBMM.

 

  • You can access information about the “Mutual Investment Promotion Agreements” signed between Türkiye and Iraq, the United Arab Emirates and Hong Kong in the finalized Commission Reports section of the TBMM.


Commercial Regulations

 

The “Export Circular” has been updated by the Central Bank.

 

  • In the Circular published by the Central Bank of the Republic of Turkey, the Annex-2 list titled “Countries Granted Exception in the Repatriation of Export Proceeds” has been revised.
  • There are currently 34 countries on this list. Chad was the latest country to be added to the list.


Special application for insolvent companies has been extended for another year until the beginning of 2026!

 

Amendments have been made to the “Regulation on the Execution of Vehicle Sales, Transfer and Registration Services.”

 

An update has been made to the installment limitation in vehicle and mobile phone sales.

 

Fines imposed in accordance with the Commercial Code have been increased at the revaluation rate.

 

KGK announced an accounting standard on “crypto assets” in Türkiye.

 

  • You can read more about Turkish Law on Crypto Assets which is enacted recently.


The Procedures and Principles Regarding the Application of Rotation Provisions and Calculation of Periods have been renewed by the KGK.

 

KGK announced a revision on “Sustainability Audit” for banks and public companies.

 

  • You can read more about the details by clicking the Board Decision dated December 16th, 2024.


Miscellaneous

 

The General Directorate of Land Registry has renewed its regulation on transactions outside its jurisdiction.

 

Fines imposed under the Environmental Law have been increased by the revaluation rate.

 

The “Implementation Agreement on the Social Security Agreement” signed between Türkiye and Romania was signed and entered into force as a Presidential Decree recently.

 

  • Social security agreements with other countries are becoming more important.
  • There are 35 different agreements that Türkiye signed with other countries.
  • You can find the details of the Guide that we updated by clicking the


UTTS (car tracking system) will cover all the vehicles in Türkiye to track the oil / gas consumption.

 

  • It will cover the vehicles owned by the firms first. The deadline for this was the year end FY24. Ministry of Finance gave an extension for 1 month for firms.
  • The system will be applicable for the new cars in the second half of FY25.


Minimum wage is increased %30 for FY25.  

 

  • The minimum wage was determined after the fourth meeting between the parties. According to the statement, the new wage to be implemented in 2025 was determined as TRY 22,104.
  • There is no income tax and stamp tax in Türkiye for the minimum wages.

 


Best regards,  

Taxia Partners  




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