E-newsletter Concerning The Modification On The Web Company Revenue – Gross sales Taxes: VAT, GST

27 April 2022

Bener Law Office

To print this article, all you need is to be registered or login on Mondaq.com.

Brief explanations regarding the changes in tax legislation

of the Law No. 7394 published in the Official Gazette dated April

5, 2022 are as follows:

A. Capital completion

Net corporation profit is defined in the article 6 of the

Corporate Tax Law. Article 376 of the Turkish Commercial Code No.

6102, includes provisions regarding capital loss and debt.

It is ensured that the amounts transferred by the shareholders

of the company, whose capital is decided to be completed, in an

amount to cover the unrequited portion due to loss pursuant to

Article 376 of the Turkish Commercial Code, are not taken into

account in the determination of corporate income, by adding a new

paragraph to the article with the article 23 of the Law No.

7394.

B. Corporation tax rate

In accordance with the provisional article 13 added to the

Corporate Tax Law, Corporate Tax is applied as 23% for the taxation

period of 2022. In accordance with the article 25 of Law No. 7394,

this rate has been increased to 25% for banks,

companies within the scope of the “Financial Leasing,

Factoring, Financing and Savings Finance Companies Law”

numbered 6361, electronic payment and money institutions,

authorized foreign exchange institutions, asset management

companies, capital market institutions, insurance and reinsurance

companies and pension companies.

This provision is in force to be applied to the company profits

of the 2023 taxation period, and the rate change is applied

to the 2022 profits of the relevant institutions in

accordance with article 26 of the Law No. 7394,

C. Amendments made in the Tax Procedure Law

New regulations have been introduced with the provisional

article 34, which has entered into force within the scope of

article 359 and 367 of the Tax Procedure Law (“TPL”)

regarding the smuggling offenses and penalties and penalties of

some smuggling offenses. You can find our explanations regarding

the new provisions below;

The prison sentences stated in the article 359 of the TPL and,

with upper limit of 3 years have been increased to 5 years; and

those with upper limit of 5 years have been increased to 8

years.
Effective repentance provisions can be applied during

investigation and prosecution stages, depending on the conditions

that if the taxes levied in accordance with the crimes listed in

article 359, the default interest, late fee and half of the fines

are paid, no lawsuit is filed in the tax court and waived if filed,

not applying to appeal and waived if applied, Thus, it is possible

to decrease prison sentences to be imposed in this regard.
In addition to the tax levied, a provision regarding reducing

the prison sentence by 50%, which will be applied when there is no

penalty imposed depending on the original tax, has been

introduced.
In case the smuggling offenses are executed more than once

within one calendar year or taxation period, the provisions of

“successive offence” in article 43 of the Turkish

Criminal Law shall be applied.
It is ruled that the condition of preparing a report and

consideration is not required in order to file a public prosecution

if it is revealed that the act subject to the consideration was

committed by another person other than the person who is being

investigated or prosecuted, or that it was carried out together

with another person, in the investigations and prosecutions carried

out regarding the crimes within the scope of Article 359 of the

TPL, according to the provision added to Article 367 of the

TPL.
A provisional article has been regulated to ensure that

effective repentance and successive offense can also be applied to

cases that are in the judicial authorities or execution phase, in

accordance with the conditions specified in the law.

The issues explained in this section entered into force on April

15, 2022.

D. Other Regulations

Explanations regarding the other regulations made within the

scope of the Law No. 7394 are given below. The effective dates of

the amendments are listed at the beginning of each heading:

July 1, 2022 – The phrase

“(Excluding the profits of those established for the purpose

of operating the portfolio consisting of real estate, real estate

projects and real estate-based rights in terms of their main field

of activity)” has been added to the said sub-paragraph 4, with

the article 22 of the Law No. 7394. In accordance with this

regulation, the profits of infrastructure real estate

investment trusts will not be an exception according

to the aforementioned subparagraph.
April 15, 2022 – Incomes related to the

income obtained by returning mutual fund participation shares to

the fund are exempt from corporate tax. In addition, the incomes

that may arise as a result of valuation of mutual fund

participation certificates according to the stock exchange price

will also be exempt from corporate tax.
April 15, 2022 – In accordance with the

additional article 4 of the Law No. 5651, advertisements given to

those who are subject to advertising ban will not be considered as

an expense in the determination of commercial and corporate

profit.
April 15, 2022 – Doctors who carry out

the practice of medicine by signing a contract with one or more

private health institutions will be considered as

self-employed.
Profits of The Year 2022 – The corporate

tax rate for banks and companies under the Law No. 6361, electronic

payment and money institutions, authorized foreign exchange

institutions, asset management companies, capital market

institutions, insurance and reinsurance companies and pension

companies will be applied as 25%, starting from 2022 profits.
April 15, 2022 – Pursuant to Article 376

of the Turkish Commercial Code, it is ensured that the amounts

transferred by the shareholders of the company, whose capital is

decided to be completed, in an amount to cover the unrequited

portion due to loss, are not taken into account in the

determination of corporate income. Incomes obtained by returning

mutual fund participation shares to the fund, which are included in

sub-paragraphs 3 and 4 of article 5/1-a of the Corporate Tax Law,

are included in the scope of corporate tax exemption.
April 15, 2022 – We consider that the

income obtained from the sale of mutual fund participation

certificates held for more than two years may be subject to

Corporate Tax exemption at the rate of 75%.
May 1, 2022 – In case the residences or

workplaces delivered to foreigners as an exemption from VAT are

disposed of within one year, the tax not collected on time is

collected together with the deferred interest. The period of 1 year

is increased to 3 years.
May 1, 2022 – Good deliveries and

services related to construction works will be exempt from value

added tax until December 31, 2025 for taxpayers holding investment

incentive certificates for the manufacturing industry and

tourism.
April 15, 2022 – Engineering services

provided to taxpayers who manufacture electric motor vehicles

developed for R&D activities in Turkey for the development of

these vehicles and within the scope of investment incentive

certificate will be exempted from VAT until December 31, 2023.
May 1, 2022 – National security

expenditures and investments will be exempted from Value Added

Tax.
May 1, 2022 – The holding period has

been increased from 1 year to 3 years – within the scope of

Value Added Tax exemption applied in real estate sales to

foreigners.
May 1, 2022 – Regulation on VAT

exemption for construction works carried out within the scope of

investments with incentive certificates.
May 1, 2022 – Regulation regarding the

exceptional application in engineering services related to electric

motor vehicles developed in Turkey within the scope of R&D

activities in Turkey.

The content of this article is intended to provide a general

guide to the subject matter. Specialist advice should be sought

about your specific circumstances.