The Communiqué sets out the procedures and principles for applying paragraphs 1 to 12 of temporary Article 15 added to Corporate Income Tax Law No. 5520 by Article 50 of Law No. 7417.
PART ONE — Introductory Provisions
Purpose and scope
ARTICLE 1 – (1) The purpose of this Communiqué is to determine the procedures and principles for applying paragraphs 1 to 12 of temporary Article 15 (referred to as “the article”) added to Corporate Income Tax Law No. 5520 of 13 June 2006 by Article 50 of Law No. 7417 of 1 July 2022 on Amendments to the Civil Servants Law, Certain Laws and Decree Law No. 375.
(2) This Communiqué covers explanations concerning:
a) bringing into the national economy the money, gold, foreign currency, securities and other capital market instruments held abroad by natural and legal persons, and the recording of those assets in the statutory books of personal and corporate income taxpayers,
b) the declaration to the tax office and the recording in the statutory books of money, gold, foreign currency, securities and other capital market instruments and immovable property held in Türkiye but not recorded in the statutory books of personal and corporate income taxpayers,
c) the declaration of assets within the scope of the article held in Türkiye by persons not liable to personal or corporate income tax,
ç) other matters relating to the application of the article.
Legal basis
ARTICLE 2 – (1) This Communiqué has been prepared on the basis of the twelfth paragraph of temporary Article 15 of Law No. 5520.
PART TWO — Notification of Assets Held Abroad, Their Transfer to Türkiye, Payment of the Tax and Refunds
Notification of assets held abroad
ARTICLE 3 – (1) Money, gold, foreign currency, securities and other capital market instruments held abroad may be notified to banks or intermediary institutions in Türkiye by 31 March 2023 (inclusive) under the provisions of the article.
(2) The notifications to be made by natural and legal persons under the first paragraph may also be made by authorised representatives or legal representatives.
(3) Natural and legal persons may notify those assets held abroad, between 5 July 2022 and 31 March 2023 (inclusive), to banks or (in respect of securities and other capital market instruments only) to intermediary institutions using the form in Annex 1. Natural and legal persons will not make any declaration to the tax offices in respect of those assets.
(4) Assets used to repay foreign loans and capital advances within the scope of the second and third paragraphs of the article must also be notified to banks and intermediary institutions.
(5) As a rule, natural and legal persons make a single notification in respect of assets held abroad. However, since each month in which a notification is made is treated as a separate taxation period for the purposes of the article, more than one notification may be made up to 31 March 2023 (inclusive).
a) Where, after a notification has been made, a further notification is to be made within the same month to correct errors or to decrease or increase the assets notified, the first notification must be corrected. Where a correction reduces the assets in the first notification, the part of the tax initially paid in advance corresponding to the reduced amount may be refunded to the person making the notification by the bank or intermediary institution.
b) Where, in months after a notification has been made, a notification is to be made to correct errors or to decrease the assets notified, the earlier notification must likewise be corrected. In that case, as a rule, the request to correct the assets reported to the tax office by banks and intermediary institutions using the return in Annex 2 is made through the bank or intermediary institution.
c) Where, in months after a notification has been made, a notification is to be made increasing the assets notified, the earlier notification is not corrected; a new notification is made for the additional assets to be notified.
ç) All notifications made outside the scope of a correction are treated as new notifications and are not associated with the earlier notification.
Example 1 – Where a natural person who notified foreign currency equivalent to TRY 5,000,000 in August 2022 wishes, within the same month, to reduce the amount notified to TRY 2,500,000 or increase it to TRY 7,500,000, a corrective notification must be made in respect of the first notification.
Where a natural person who notified foreign currency equivalent to TRY 5,000,000 in August wishes, in September or October, to reduce the amount notified to TRY 2,500,000, a corrective notification must be made in respect of the August notification. The request to correct the assets reported to the tax office by banks and intermediary institutions using the return in Annex 2 is made through the bank or intermediary institution.
Where a natural person who notified foreign currency equivalent to TRY 5,000,000 in August wishes, in September or October, to increase the amount notified to TRY 7,500,000, a new notification of TRY 2,500,000 must be made for September or October. Since new notifications are not associated with the earlier notification, care must be taken to notify only the additional amount.
d) Correction requests made after the notification period has ended will not be taken into account. Accordingly, notifications made up to 31 March 2023 cannot be corrected after that date.
Transfer to Türkiye of assets held abroad
ARTICLE 4 – (1) Assets notified under the article must be brought to Türkiye, or transferred to an existing or newly opened account at a bank or intermediary institution in Türkiye, within three months of the date of the notification. In transfers of the asset to an existing or newly opened account at a bank or intermediary institution in Türkiye, the fact that the account holder making the notification and the person transferring the asset from abroad are different persons is of no significance for benefiting from the provision.
(2) Assets held abroad may be used to repay, by 31 March 2023 at the latest, loans obtained from banks or financial institutions abroad and recorded in the statutory books as at 5 July 2022. In that case, provided the loans are written out of the book records, the assets used to repay the debt need not be brought to Türkiye. Those benefiting from this provision must attach to their notification a copy of the supporting documents obtained from the banks or financial institutions abroad confirming that they have repaid the loans; the bank or intermediary institution receiving that notification has no obligation to check the write-off in the book records.
(3) Where capital advances recorded in the statutory books as at 5 July 2022 were met by bringing money, gold, foreign currency, securities and other capital market instruments held abroad to Türkiye before that date, the provisions of the article may be relied on provided those advances are written out of the book records.
(4) Assets held abroad that are outside the scope (for example immovable property) may be brought to Türkiye under the article by being converted into assets within the scope by 31 March 2023.
(5) Bringing assets to Türkiye means:
a) physically bringing money, foreign currency, gold, securities and other capital market instruments to Türkiye, or transferring those assets to an account to be opened at a bank or intermediary institution in Türkiye,
b) notifying to intermediary institutions those securities and other capital market instruments that cannot be physically brought to Türkiye or transferred to an account to be opened at an intermediary institution.
(6) Where money, gold, foreign currency, securities and other capital market instruments held abroad are transferred to an existing or newly opened account at a bank or intermediary institution in Türkiye, bank receipts or intermediary institution transaction result forms may be used to evidence that the assets have been brought to Türkiye.
(7) Provided notification is made to a bank or intermediary institution by 31 March 2023, the documents obtained from the Customs Administration on the basis of the declaration made when the assets in question are physically brought to Türkiye may be used to evidence that the assets have been brought to Türkiye.
Procedures to be carried out by banks or intermediary institutions on notification of assets held abroad, and payment of the tax
ARTICLE 5 – (1) Natural and legal persons will notify assets held abroad to banks or intermediary institutions using the form in Annex 1, prepared in two copies. One copy of the form will be returned to the person concerned by the bank or intermediary institution, after the details of any account opened as a result of the notification have been entered and certified, together with the bank receipts or transaction result forms issued.
(2) Where the notification is made by the representative or legal representative of a natural or legal person, banks or intermediary institutions will check whether that representative or legal representative is authorised.
(3) Banks and intermediary institutions will not request any document from those making notifications in respect of the assets notified.
(4) Banks and intermediary institutions will declare, as tax withholding agents, the tax they collect in advance from the person making the notification on the value of the assets notified — at 1% for notifications made up to 30 September 2022, 2% for notifications made between 1 October 2022 and 31 December 2022 (inclusive) and 3% for notifications made up to 31 March 2023 (inclusive) — to the tax office to which they are registered, using the return in Annex 2, by the evening of the fifteenth day of the month following the notification, in accordance with the procedures and principles set out in Tax Procedure Law General Communiqués Nos. 340 and 346. The taxes assessed by the tax offices on the values of the assets declared will be paid by the banks and intermediary institutions as tax withholding agents within that declaration period.
Refund to the person making the notification of taxes collected on the notification of assets held abroad
ARTICLE 6 – (1) Where assets held abroad and notified under the article are held for at least one year in accounts at banks or intermediary institutions in Türkiye from the date they are transferred to those accounts or brought from abroad and deposited into them, the tax rate to be applied under the article on the value of the assets notified will be treated as 0%. In that case, the taxes collected by banks and intermediary institutions and paid to the tax office as withholding agents will be refunded to the person making the notification upon application to the tax office using the form in Annex 4 within the correction statute of limitations.
(2) The tax office to be applied to is the tax office to which the head office of the bank or intermediary institution making the withholding is registered.
(3) Natural or legal persons claiming a refund must attach to the form in Annex 4 supporting documents (such as bank receipts, account statements or intermediary institution transaction result forms) showing that the assets they notified were deposited with banks and intermediary institutions and held in those accounts for at least one year. Applications may be made electronically through the Interactive Tax Office, or the form may be submitted to the relevant tax office in person or by post.
(4) Those making notifications may claim a cash refund under the article or may claim a refund by way of offset against their tax debts. In that case the offset claim will be processed by reference to the date on which the form in Annex 4 was submitted to the tax office in complete form.
(5) For a refund to be made to the person making the notification, the taxes calculated on the value of the assets notified under the article must have been paid by the withholding agents.
(6) Refunds to those making notifications will be carried out taking into account Article 23 of Law No. 6183 of 21 July 1953 on the Procedure for the Collection of Public Receivables and Article 88 of Social Insurance and General Health Insurance Law No. 5510 of 31 May 2006.
(7) The one-year period for the refund begins on the date the assets notified were transferred to accounts opened at banks and intermediary institutions in Türkiye or were brought from abroad and deposited into those accounts.
Example 2 – Natural person (A) notified bank (N) on 13 September 2022 of an asset held abroad worth TRY 600,000 under the article and paid the calculated tax in advance. That person transferred the amount on 1 December 2022 to their account at the bank to which the notification was made. Accordingly, the start of the one-year period for the refund of the tax assessed on the asset held abroad is 1 December 2022, the date the amount notified was transferred to the bank account in Türkiye; if the amount notified is held in that bank account until 1 December 2023, the tax paid at the time of notification may be refunded.
(8) The fact that assets notified and transferred to or deposited into accounts opened at banks and intermediary institutions on this basis are held in different deposit, participation or investment accounts at those institutions does not affect the calculation of the one-year period for the refund.
PART THREE — Declaration of Assets Held in Türkiye and Payment of the Tax
Declaration of assets held in Türkiye
ARTICLE 7 – (1) Money, gold, foreign currency, securities and other capital market instruments and immovable property owned by personal or corporate income taxpayers and held in Türkiye but not recorded in their statutory books may be declared by 31 March 2023 (inclusive), using the return in Annex 3, directly to the tax offices to which they are registered for personal or corporate income tax, or electronically in accordance with the procedures and principles set out in Tax Procedure Law General Communiqué No. 340.
(2) Taxpayers required to file their annual personal or corporate income tax returns electronically must also file the return in Annex 3 electronically, in accordance with the procedures and principles set out in Tax Procedure Law General Communiqués Nos. 340 and 346.
(3) Persons not liable to personal or corporate income tax may also benefit from the article by making a declaration in respect of money, gold, foreign currency, securities and other capital market instruments and immovable property held in Türkiye. Those persons must deposit their assets other than immovable property into accounts opened at banks or intermediary institutions as at the declaration date and evidence this with supporting documents.
(4) For persons not liable to personal or corporate income tax, the tax office to which the declaration is to be made is the tax office for the area in which they reside.
(5) Sole proprietorships and ordinary partnerships are not liable to personal or corporate income tax; they are registered in respect of withholding and value added tax. Declarations may therefore also be made in the name of sole proprietorships and ordinary partnerships, and by reason of the assets declared the sole proprietorships and ordinary partnerships may benefit from the protection against tax inspection and assessment in respect of value added tax, and their partners in respect of personal or corporate income tax.
Payment of the tax
ARTICLE 8 – (1) Tax will be assessed by the tax offices at 3% on the values of the assets declared to them. The tax so calculated will be paid by the end of the month following the month of assessment.
PART FOUR — Common Provisions
Position of assets appearing in the name of companies’ legal representatives, shareholders or agents
ARTICLE 9 – (1) Where companies’ legal representatives or shareholders, or persons authorised under a power of attorney or agency agreement drawn up by authorised bodies before 5 July 2022 to deal with assets within the scope of the article on behalf of the company or its shareholders, hold assets abroad as at that date, those assets may be notified in the name of the company and brought to Türkiye or transferred to an account to be opened at a bank or intermediary institution in Türkiye in accordance with the explanations in this Communiqué; likewise, assets held in Türkiye but not recorded in the statutory books as at 5 July 2022 may be declared in the name of the company in accordance with the explanations in this Communiqué, so that the provisions of the article may be relied on.
(2) Assets belonging to the company or its shareholders but held by persons other than the company’s legal representatives, shareholders or agents may be notified or declared in the name of the company under the article so that the provision may be relied on. In addition, assets belonging to natural persons but held by companies abroad of which those persons are shareholders or legal representatives may also be notified or declared in the name of the natural persons concerned so that the provision may be relied on. However, during any inspection carried out for reasons other than the notification or declaration, it must be proved that those assets belong to the company or its shareholders or to the natural persons.
Value of assets on notification
ARTICLE 10 – (1) Both in notifying assets held abroad to banks or intermediary institutions and in declaring assets held in Türkiye to tax offices, assets will be valued as at the date of notification or declaration using the following measures:
a) money in Turkish lira, at nominal value.
b) gold, at fair value.
c) foreign currency, at the Central Bank of the Republic of Türkiye’s foreign exchange buying rate.
ç) of securities and other capital market instruments:
1) shares, at the stock exchange price if any, otherwise at fair value; if that cannot be determined, at acquisition cost; and if the acquisition cost is not known, at nominal value.
2) debt instruments such as bonds, bills and eurobonds, at the stock exchange price if any, otherwise at fair value; if that cannot be determined, at acquisition cost; and if the acquisition cost is not known, at nominal value.
3) investment fund participation units, at the closing price determined in the relevant market.
4) derivatives such as futures and options contracts, at the stock exchange price if any, otherwise at fair value; if that cannot be determined, at acquisition cost; and if the acquisition cost is not known, at nominal value.
d) immovable property, at fair value.
(2) The Turkish lira equivalent values of those assets will be used in notifications and declarations.
(3) For the purposes of this Communiqué, fair value means the purchase and sale value determined as at the date the assets are notified or declared, and that value must reflect the true position.
(4) In determining the stock exchange price of assets to be valued at that price, the values arising on the domestic or foreign exchanges on which those assets are traded on the date of notification or declaration will be taken into account.
(5) For assets denominated in foreign currency, the Central Bank of the Republic of Türkiye’s foreign exchange buying rate on the date of notification or declaration will be used.
(6) In corrections made up to 31 March 2023 to correct errors or to reduce the assets notified, the values of the assets as at the date of the first notification will be used.
Recording of assets notified or declared in the statutory books
ARTICLE 11 – (1) Assets notified or declared must be recorded in the statutory books by taxpayers keeping books under Tax Procedure Law No. 213 of 4 January 1961.
(2) Since, where assets held abroad are notified in the name of a company the company itself, and where they are notified in the name of individuals those individuals, may benefit from the opportunities the article provides, assets notified in the name of a company must be recorded in that company’s statutory books.
(3) Taxpayers keeping books on the balance sheet basis will open a special fund account on the liabilities side for the assets they notify or declare under the article and record in their statutory books. That account will be treated as part of capital, may not be withdrawn from the business until two years have passed from the date of notification or declaration, and may not be used for any purpose other than addition to capital. On the other hand, those amounts will not be taxed if the business is liquidated. Nor will the amounts held in the fund account be taxed on transfers and demergers taking place under Article 81 of Income Tax Law No. 193 of 31 December 1960 and Articles 19 and 20 of Law No. 5520.
(4) Taxpayers keeping a self-employment income book or books on the business account basis will show the assets they notify or declare separately in their books.
(5) Assets brought to Türkiye by taxpayers keeping books under Law No. 213, and assets recorded in the statutory books by personal or corporate income taxpayers, will be included in their businesses without being taken into account in determining income for the period, and may be withdrawn from those businesses, once two years have passed from the date of notification or declaration, without being taken into account in determining taxable income and, for entities, distributable income.
(6) Assets held in Türkiye must be recorded in the statutory books at their Turkish lira equivalent values determined in accordance with Article 10 as at the date of declaration to the tax office; where those assets are disposed of, that value will be used in determining the gain on sale.
(7) No fee will be charged under Fees Law No. 492 of 2 July 1964 on the title deed transactions relating to the transfer to the business of immovable property declared under the article and to be recorded in the business’s books. In addition, the capital gains provisions of repeated Article 80 of Law No. 193 will not apply to the transfer of that property to the business.
(8) So that no title deed fee is charged on the immovable property transfers to be carried out at the land registry, following submission of the return referred to in the article, a letter obtained from the tax office to which the declaration was made — including the title deed details of the immovable property declared and confirming that it was declared in the name of the company under this article and recorded in the special fund account (or shown on the relevant pages of the statutory books), and that accordingly no fee will be charged on the title deed transaction — will be submitted to the relevant land registry directorate.
Income, expense and depreciation treatment
ARTICLE 12 – (1) The depreciation provisions of Law No. 213 will not apply to assets notified or declared and recorded in the statutory books.
(2) Losses arising from the subsequent disposal of those assets recorded in the books will not be accepted as an expense or deduction in determining income or corporate income for personal and corporate income tax purposes. Income and revenues arising from holding and disposing of those assets will, however, be taken into account in determining income or corporate income under the general rules.
(3) Taxes paid in respect of assets notified or declared may not in any way be recorded as an expense or offset against any other tax.
Cases in which no inspection or assessment will be carried out
ARTICLE 13 – (1) Under the article, no tax inspection and no tax assessment will be carried out in any way in respect of the amounts corresponding to the assets notified or declared. To benefit from this provision:
a) for assets held abroad and notified:
1) they must be brought to Türkiye, or transferred to an account to be opened at a bank or intermediary institution in Türkiye, within three months of the date of the notification,
2) the tax assessed on the assets notified must be paid within the deadline,
3) the assets notified must be recorded in the statutory books by taxpayers keeping books under Law No. 213, a special fund account must be opened on the liabilities side for those assets recorded in the statutory books (or they must be shown on the relevant pages of the statutory books), that fund account and the assets must not be withdrawn from the business until two years have passed, and the fund account must not be used for any purpose other than addition to capital;
b) for assets held in Türkiye and declared:
1) the assets declared must be recorded in the statutory books by taxpayers keeping books under Law No. 213, a special fund account must be opened on the liabilities side for those assets recorded in the statutory books (or they must be shown on the relevant pages of the statutory books), that fund account and the assets must not be withdrawn from the business until two years have passed, and the fund account must not be used for any purpose other than addition to capital,
2) for persons not liable to personal or corporate income tax, it must be evidenced with documents showing that the assets were deposited into accounts at banks or intermediary institutions (excluding immovable property),
3) the tax assessed on the assets declared under the article must be paid within the deadline.
(2) Assets notified may be used to repay, by 31 March 2023 at the latest, loans obtained from banks or financial institutions abroad and recorded in the statutory books as at 5 July 2022; provided they are written out of the book records, the protection against tax inspection and tax assessment will apply to the assets used to repay the debt without the requirement that they be brought to Türkiye.
(3) Where capital advances recorded in the statutory books as at 5 July 2022 were met by bringing money, gold, foreign currency, securities and other capital market instruments held abroad to Türkiye before that date, the protection against tax inspection and tax assessment may be relied on provided those advances are written out of the book records.
(4) Where, as a result of tax inspections or referrals to the assessment commission commenced for reasons other than the assets notified or declared, a difference in the tax base is found in respect of taxpayers making a notification or declaration under the article:
a) where it is established that the difference in the tax base arose because of the assets notified or declared, and the amount of the assets notified or declared is equal to or greater than that difference, no assessment will be made for personal or corporate income tax or value added tax.
Example 3 – (ABC) Inc. made a declaration of TRY 500,000 on 16 August 2022 to the tax office to which it is registered, under the article, in respect of assets held in Türkiye but not recorded in its statutory books, and paid the tax assessed on that declaration within the deadline. The taxpayer company, which also meets the other conditions in the article, was referred for inspection in respect of the 2020 accounting period as part of sector inspections. As a result of the inspection for that period, a tax base difference of TRY 250,000 relating to unrecorded sales was found, but the taxpayer company stated during the inspection that this difference arose because of the assets declared under the article. The tax inspector examined that claim and concluded that the reason for the difference was consistent with the taxpayer’s statement. In that case, no assessment will be made in respect of the taxpayer.
b) where it is established that the difference in the tax base arose because of the assets notified or declared but that difference exceeds the amount of the assets notified or declared, a tax assessment will be made for personal or corporate income tax and value added tax only on the excess.
Example 4 – (DEF) Ltd. made a notification of TRY 1,000,000 in respect of assets within the scope of the article held abroad. Following a report concerning the taxpayer, which meets all the conditions in the article, the taxpayer company’s 2019 accounting period was referred for inspection. As a result of the inspection, a tax base difference of TRY 2,500,000 was found. The taxpayer stated that TRY 1,000,000 of that difference arose because of the assets notified. The tax inspector established that TRY 750,000 of the difference arose because of the assets notified and that the remainder arose from other causes such as incorrect depreciation, and the incorrect calculation of expenses, deductions and exemptions. In that case, no tax assessment will be made in respect of TRY 750,000 of the tax base difference found for that taxpayer.
(5) Where a notification or declaration is made under the article after a tax inspection has commenced or a referral has been made to the assessment commission, this will not prevent a tax assessment being made on the tax base differences found as a result of the tax inspection or the assessment commission’s decision, and the amounts notified or declared may not be offset.
Other matters
ARTICLE 14 – (1) The relevant institutions and organisations are obliged to comply with the requests of natural or legal persons relating to the procedures to be carried out under the article.
Entry into force
ARTICLE 15 – (1) This Communiqué enters into force on the date of its publication.
Execution
ARTICLE 16 – (1) The provisions of this Communiqué shall be executed by the Minister of Treasury and Finance.
Click for the annexes.