Significant Tax Amendments Introduced Through the Law No. 7456
Law No. 7456 on Additional Motor Vehicle Tax for Compensation of Economic Losses Caused by the Earthquake on 6/2/2023 and on Amendments to Certain Laws and Decree Law No. 375 (Law No. 7456) was published in the Official Gazette dated 15.07.2023 and No. 32249. The significant tax amendments included in the Law No. 7456 are summarized below:
- Law No. 7456 stipulates a one-time additional motor vehicle tax (MVT) to be levied on vehicles such as cars, minibuses, buses, trucks, motorcycles included in the relevant tariffs of Motor Vehicle Tax Law No. 197 and registered on 15.07.2023 or to be registered for the first time until 31.12.2023. This amount is envisaged to be equal to the amount of MVT accrued in 2023. The additional tax will be collected in two installments. For vehicles registered on 15.07.2023, it is foreseen that the first installment of the additional tax will be paid until 31.08.2023 and the second installment until 30.11.2023. For vehicles to be registered for the first time between 15.07.2023 and 31.12.2023, it is regulated that the additional tax will be paid in advance together with the MVT of such vehicles. Taxes to be collected will be registered as revenue in the general budget. Pursuant to Article 2, 10 and 73 of the Constitution, the additional MVT must be examined in terms of the principle of legality of taxation and the principle of certainty within the scope of the non-retroactivity of tax laws and the principles of taxation according to financial power. Indeed, the Constitutional Court had annulled the additional MVT regulation introduced after the 1999 earthquake by examining that tax in light of the said principles. In terms of the taxpayers who plan to initiate a tax litigation case, it should be highlighted that the additional MTV will be accepted to be accrued and notifies as of the promulgation date of the Law and the term of litigation should be calculated accordingly.
- The general corporate income tax (CIT) rate increased from 20% to 25%. For banks and financial institutions, CIT rate has been raised to 30%. In addition, it is envisaged that the CIT rate, which is applied with a 1% discount for exporting corporations, will be applied with a 5% discount. This regulation applies to the income of the corporations obtained during the Fiscal Year of 2023 and the following taxation periods, starting from the declarations to be submitted as of 01.10.2023.
- The value added tax (VAT) exemption applicable to transfers and deliveries realized through the sale of immovable properties registered in the assets of the company for at least two full years is abolished. On the other hand, pursuant to the provisional article added to the Value Added Tax Law No. 3065 (VAT Law), VAT exemption will continue to be applied to the transfer and delivery of immovable properties registered in the assets of the company before 15.07.2023.
- The CIT exemption at the rate of 50% envisaged for the sale of immovable properties that have been registered in the company’s assets for more than two years is terminated. Pursuant to the provisional article added to the Corporate Income Tax Law No. 5520 (CTL), the CIT exemption will continue to apply to the sale of immovable properties registered in the assets of the company before 15.07.2023. However, the CIT rate to be applied to the income from the sale of immovable properties after 15.07.2023 will be considered as 25%, not 50%.
- It is envisaged that immovables are excluded from the scope of tax-free partial spin-off regulated under Article 19/3-b of the CTL. This amendment will enter into force on 01.01.2024. Therefore, it is of utmost importance for corporations considering to transfer their immovable assets through a partial spin-off to take this amendment into consideration. Apart from this, it should be also noted that the previous criticism points of the Revenue Administration regarding the transfer of immovables through partial spin-off should be considered for the tax-free partial spin-off transactions planned to be terminated until 31.12.2023.
- It is regulated to abolish the CIT exemption for incomes derived from other investment funds and partnerships other than venture capital funds and partnerships. The exemptions in this scope are abolished for investment fund participation shares acquired as of 15.07.2023.
- It is foreseen to amend the authority granted to the President in order to tax goods included in the tariffs numbered (I) and (III) attached to the Special Consumption Tax Law No. 4760 (SCT Law) in accordance with possible price fluctuations. In addition, there are various regulations regarding the lump-sum tax amounts provided for the goods in the tariff numbered (I) annexed to the SCT Law.
All rights of this article are reserved. This article may not be used, reproduced, copied, published, distributed, or otherwise disseminated without quotation or Erdem & Erdem Law Firm's written consent. Any content created without citing the resource or Erdem & Erdem Law Firm’s written consent is regularly tracked, and legal action will be taken in case of violation.
Other Contents
The Presidential Decision dated 25.05.2023 and No. 7300 (Decision) has entered into force through publication in the Official Gazette dated 26.05.2023 and No. 32202. The Decision extended the deadlines for applications and first installment payments for debt restructuring, tax base increase and correction of...
Council of State Plenary Session of the Tax Law Chamber (Council of State TLC) decided that real estate taxpayers can file a lawsuit against the decisions of the appraisal commissions for the determination of minimum plot and land unit values until the last day of the year during which such decisions are taken...
The deadline for declaring the corporate tax return pertaining to FY 2022 is May 5, 2023. If there are any disputed taxes (e.g. additional -earthquake- tax) and a tax lawsuit is planned to be filed, we would like to remind that the tax return should be declared with a reservation...
Through the Law No. 7440 on Restructuring of Certain Receivables and Amending Certain Laws (Law No. 7440), published in the Official Gazette dated 12.03.2023 and No. 32130, procedures and principles regarding restructuring of the specified public receivables are regulated...
Through Law No. 7440 on Restructuring of Certain Receivables and Amendments to Certain Laws (Law No. 7440), published in the Official Gazette dated 12 March 2023 and No. 32130, amendments...
Through the Article 20 of Law No. 7440 on Restructuring of Some Receivables and Amending Some Laws (Law No. 7440), published in the Official Gazette dated 12 March 2023 and No. 32130, significant tax regulations regarding Debt Push-Down financing structure for merger transactions are introduced...
Through Article 10/27 of the Law No. 7440 on Restructuring of Certain Receivables and Amendments to Certain Laws (Law No. 7440) published in the Official Gazette dated 12 March 2023 and numbered 32130, an additional corporate (earthquake) tax at the rate of 10% is imposed against some corporate taxpayers...
Tax Procedure Law General Communiqué No. 546 (Communiqué) is published in the Official Gazette dated 18 January 2023 and No. 32077. Pursuant to the Communiqué, joint stock, limited liability company, unlimited liability company and limited partnership companies, cooperatives, Turkish branches of...
Through the promulgation of the Presidential Decision No. 6657 (Decision) on Resource Utilization Support Fund Deduction published in the Official Gazette dated January 10, 2023 and No. 32069, the Resource Utilization Support Fund rate for loans obtained by financial leasing companies from abroad is...
Through the promulgation of relevant general communiqués published in the Official Gazette dated 30 December 2022 and No. 32059 (2nd Repeated), certain tax limits to be applied during 2023 were determined. Accordingly, above-mentioned communiqués are...
The Presidential Decision numbered 6584 (Decision) on the entertainment tax rates regulated under Article 21 of the Law numbered 2464 on Municipal Revenues (Law) was published in the Official Gazette dated 21 December 2022 and numbered 32050...
Through the promulgation of the General Application Communiqué on Accommodation Tax (Communiqué), published in the Official Gazette dated 14 December 2022 and No. 32043, the procedures and principles for the implementation of the accommodation tax are regulated...
Through the administrative letter dated 30.11.2022 and No. E-85593407-156.06 published by the Customs General Directorate of the Trade Ministry regarding the import transactions in which an invoice is issued in foreign currency but the payment is made, the issues that cause hesitation in practice in terms of...
The Law on Amendments to the Tax Procedure Law and Certain Laws (Omnibus Law) entered into force through its publication in the Official Gazette dated 26.11.2022 and numbered 32025. The Omnibus Law amended the Law No. 4059 on Financial Stability and Certain Regulations (Financial Stability Law)...
Through the promulgation of President Decision No. 6417 (Decision) published in the Official Gazette dated November 24, 2022 and No. 32023, Special Consumption Tax (SCT) bases imposed on some private cars in the list (II) of the Special Consumption Tax Law No. 4760 have been changed...
Through the promulgation of Tax Procedural Code General Communiqué No.542 (Communiqué) published in the Official Gazette dated November 24, 2022 and No. 32023, the revaluation rate was determined as 122.93% for the year 2022...
Through the Expenditure Taxes General Communiqué Serial No. 92, ("Communiqué") published in the Official Gazette dated 11th October 2022 and no. 31980, banking and insurance transactions tax ("BITT") regulations are introduced regarding the taxation of the money received by insurance companies...
Through the promulgation of General Communiqué Serial No. 1 on Bringing Some Assets to the Economy (“Wealth Amnesty Communiqué”) which is published in the Official Gazette dated 9th August 2022 and no. 31918, the principles regarding the implementation of Wealth Amnesty which is...
Through Law No. 7417 on the Amendment to the Civil Servants Law, Certain Laws and Decree No. 375 ("Law No. 7417") published in the Official Gazette dated 5th July 2022 and No. 31887, a significant amendment is introduced for the application of interest rate deduction resulting from cash capital increase...
Through the Law No. 7417 on the Amendment to the Civil Servants Law, Certain Laws and Decree No. 375 ("Law No. 7417") which is published in the Official Gazette dated 5th July 2022 and No. 31887, significant amendments within Law No. 6183 on the Procedure for the Collection of Public Receivables...
Through the promulgation of the Law No. 7417 on the Amendment to the Civil Servants Law, Certain Laws and Decree No. 375 ("Law No. 7417") which is published in the Official Gazette dated 5th July 2022 and no. 31887, new Wealth Amnesty has been introduced.
Through the promulgation of the Regulation on Amendment to Regulation on the Procedures and Principles to be Applied in Tax Inspections published in the Official Gazette dated 28th June 2022 and no. 31880, significant amendments were made to the rules applied in tax inspections...
Through the promulgation of the President Decision No. 5752 published in the Official Gazette dated 28th June 2022 and no. 31880 (“Decision”), the period of the application of the low withholding rates on the interest obtained from Turkish Lira...
Through the promulgation of Law No. 7407 Amending the Banking Law, Some Laws and the Decree Law No. 655 (“Law No. 7407”), published in the Official Gazette dated 28th May 2022 and No. 31849, corporate tax exemption envisaged for incomes gained through currency protected TRY deposit accounts...
Through the promulgation of Law No. 7394 on the Amendments of Treasury-Owned Immovable Property Valuation and the Value Added Tax Law and on the Amendments of Certain Other Laws and Decrees (“Law No. 7394”), published in the Official Gazette...
Through the promulgation of Law No. 7352 Amending Tax Procedure Law and the Corporate Tax Law (“Law No. 7352”), published in the Official Gazette dated 29th January 2022...
Through the announcement of Circular No. VUK-138/2022-1 and dated 25 January 2022 (“Circular”) made by the Turkish Revenue Administration, it has been announced that the deadline for the submission of tax returns regarding...
Special Consumption Tax Rates and Base for Some Passenger Cars are Amended
VAT Rate Applicable to Education Services Provided in Private Schools and Universities is Reduced to 1%
Procedures and Principles Regarding the Tax Registration Cancellation of Taxpayers with High Risk to Forge Documents is Published
The New Wealth Amnesty entered into force through the Promulgation of the Law No. 7256
Provisions on Restructuring of Public Receivables of the Law No. 7256 entered into force
New Taxation Rules were introduced for Share Buybacks
Procedures and Principles regarding the Restructuring of Some Public Receivables were determined through the General Communiqué Serial No.1
Procedures and Principles regarding the Wealth Amnesty were determined
The Revaluation Rate was determined as 9,11 % for 2020
The Liability for Valuable House Tax will be effective as of 2021
Extension of the Period Designated for Submission of the First Country by Country Report
The Duration of VAT Rate Discounts on Certain Goods and Services is Extended
The Upper Limit of Stamp Tax to be Applied in 2021 was determined
Income Tax Tariffs Applicable on Remunerations and Income Other than Remunerations Acquired in 2021 were determined
The Communiqué on the Procedures and Principles Regarding Valuable House Tax was published
Special Communication Tax Rate was increased to 10%
VAT in Urban Transformation was reduced to 1%
SCT Rates on Electric Cars were increased
Tax Regulations Regarding Technopolis and R&D Centers
Withholding Rate of Long-term Construction and Repair Business was increased
Limitation on Financing Expense Deduction is Back
Special Communication Tax as Deductible Expense
Amendments to Regulation on the Conciliation Before Assessment
The Period of VAT Reduction on Overnight Services in Accommodation Facilities Has Been Extended for 1 Month
SCT Amounts Imposed on Some Fuel Products Have Been Increased
The Corporate Tax General Communiqué No. 18 is Published
The Duration of VAT Rate Discounts on Certain Goods and Services is Extended Until July 31st
The Period of VAT Reduction on Accommodation Services has been re-extended
Obligation of Ultimate Beneficial Owner Declaration for Corporate Taxpayers and Certain Persons
The Duration of VAT Rate Discounts on Certain Goods and Services is Extended Until 30 September 2021
The Period of Withholding Rate Reductions on Real Estate Rentals is Extended to September 30th
The Rate Regarding the Working Time Spent Outside the Region and Centers by Personnel Working in Technology Development Zones and R&D or Design Centers Has Been Amended
The Law No. 7338 on the Amendment of Tax Procedural Law and Certain Other Laws Has Entered Into Force
Tax Amendments Introduced Through the Law No. 7341