Taxation of retained earnings arising from inflation adjustment
Communiqué No. 555 of the Tax Procedure Law
ARTICLE 55- (1) According to the third part of the Communiqué, in the event that the retained earnings arising from the inflation adjustment of 2023, which are followed in the retained earnings account as a result of the correction of the balance sheet for the accounting period of 2023, are transferred to another account or withdrawn from the entity by any means, the transferred or withdrawn amount will be subject to income or corporate tax in this period without being associated with the earnings of the periods in which these transactions are made. In addition, the values withdrawn from the business will be subject to dividend withholding according to the legal status of the owners and will be taxed in accordance with the provisions regarding the taxation of dividends.
(2) Within the scope of the third part of this Communiqué, it is possible to add the prior year profit arising from the correction of the balance sheet for the accounting period of 2023 to the capital by corporate taxpayers, and this transaction will not be considered as profit distribution.
(3) According to the third part of the Communiqué, if the prior year and / or current period commercial profit before the correction, which is followed in the account of retained earnings of 2023, which is formed as a result of the correction of the balance sheet for the accounting period of 2023 according to the third part of the Communiqué, is subject to profit distribution after 1/1/2024, the amount distributed will not be subject to income and corporate tax, will be subject to dividend withholding according to the legal status of the owners and will be taxed in accordance with the provisions regarding the taxation of dividends.
Source: Communiqué No. 555 of the Tax Procedure Law
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