Law No. 7524, containing significant changes to the tax laws, was published in the Official Gazette of 2 August 2024.
The omnibus bill containing significant changes to the tax laws, which had been on the agenda for some time, was submitted to the Grand National Assembly of Türkiye on 16 July 2024 and was adopted, with certain amendments, by the Assembly’s Planning and Budget Committee. Further changes were then made during the plenary debates, and after new articles had been added the bill was adopted as Law No. 7524 on 28 July 2024 and submitted for the President’s approval.
Approved by the President, the Law, consisting of 61 articles including the commencement article, was published in the Official Gazette of 2 August 2024. In general terms, the Law makes changes in the following areas.
• A global minimum corporate income tax has been introduced.
• A domestic minimum corporate income tax has been introduced.
• The corporate income tax rate on income derived under the build-operate-transfer model and the public-private partnership model has been raised to 30%.
• For investment funds and trusts to benefit from the corporate income tax exemption, a condition has been introduced that at least 50% of their income from immovable property be distributed as dividends.
• The President has been empowered to require withholding on payments made to personal and corporate income taxpayers deriving commercial income.
• A tax security mechanism has been created to determine the actual revenue of those registered by reason of commercial or self-employment activity.
• A salary exemption has been introduced for benefits provided to employees in the form of shares by employers qualifying as technology start-up companies.
• The VAT exemption applied to sea and transport vehicles has been removed for craft used in activities such as leisure, entertainment, sport and amateur fishing and for private boats and yachts.
• The difference in treatment favouring importation over domestic supply for certain goods has been eliminated.
• A provision has been introduced for VAT that has not been deducted for five years to be removed from the deduction account, transferred to a special account and treated as an expense.
• In mergers, transfers and demergers, carried-forward VAT and the refund entitlement may be transferred to the new company through a tax inspection, without being subject to the statute of limitations.
• Tax inspection has been established as the standard procedure for VAT refunds.
• Irregularity and special irregularity penalties have been increased.
• The principal tax has been removed from the scope of the settlement mechanism.
• The tax loss penalty has been increased for those operating outside the records.
• The valuation measure for precious metals has been set as the stock exchange price.
• The limit of up to 20% of the minimum fixed tax amount applicable to the fixed tax on certain tobacco products has been removed.
• The income exemption available to businesses operating in free zones has been limited to export revenue.
• Payments to be made pursuant to court decisions and to payment or enforcement orders of enforcement offices have been brought within the scope of the requirement to produce a certificate of no overdue debt.
• The short-term insurance branches premium rate has been raised from 2.00% to 2.25%.
• The departure fee has been raised to TRY 500.00.
The detail of the changes by law is set out below; the procedures and principles relating to those changes are expected to be set out in communiqués to be published subsequently.