Can Bağkur (social security organization for artisans and the self-employed) premiums be deducted in the provisional tax declaration for the period 2024/2?
Provided that it is certified that it was paid in the year in which the income was earned, Bağ-Kur premiums can be deducted limited to the income. In the event that there is no or insufficient income declared in the annual declaration at the end of the period, the part of the amount of paid Bağ-Kur entrance deductions and premiums deducted in the provisional tax periods, which can be benefited according to the annual declaration, can be deducted from the income declared by the income taxpayers, and the remaining part cannot be deducted. Bağ-Kur premiums are shown in the “Other Deductions” column on the declaration.
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DETAILS
What is advance tax?
Advance tax is an advance tax calculated and paid on the quarterly earnings of commercial earners, self-employed persons and corporate taxpayers who are taxed in the real method, as an offset to the income and corporate tax of the current taxation period.
Which earnings are covered by advance tax?
Commercial earners, self-employed persons and corporate taxpayers who are taxed in the real method are obliged to pay advance tax to be offset against the income and corporate tax of the current taxation period. Ordinary partnerships, collective companies and ordinary limited partnerships are not liable for advance tax as they are not liable for income or corporate tax as partnerships. However, the earnings obtained by the partners in ordinary partnerships and collective companies and by the limited partners in limited partnerships are subject to advance tax.
Who does not pay advance tax?
Corporate taxpayers in liquidation do not pay advance tax during the liquidation periods, income taxpayers who are taxed in simple procedure, those who perform construction and repair work for years, those who earn wage income, those who earn movable and real estate capital income, those who earn agricultural income, those who earn other earnings and income, those who are self-employed whose earnings are exempt from tax and those who are obliged to perform the duty of notary public do not pay advance tax. However, the persons who are stated not to pay advance tax are obliged to pay advance tax due to their commercial or professional earnings other than the earnings obtained from these jobs.
How is the income subject to advance tax determined?
Taxpayers will first determine the provisional tax period earnings based on the financial statements of 3, 6, 9 and 12 months of the relevant accounting period, in accordance with the provision of Article 120 of the Income Tax Law. In the determination of provisional tax earnings, the principle of periodicity should be followed and the provisions of the Tax Procedure Law regarding valuation should be taken into consideration.
What is the advance tax rate for Income Taxpayers and Corporate Taxpayers?
The provisional tax rate for income taxpayers is the rate in the first bracket of the income tax tariff (15%) for income taxpayers and 25% for corporate taxpayers starting from the second provisional tax period of the 2021 accounting period starting from 1/1/2021.
From the second provisional tax period of the 2022 accounting period, it is applied at a rate of 23%.
The following paragraphs have been added to Article 32 of the Law No. 5520
“(7) The corporate tax rate is applied with a 1 point discount to the earnings of exporting corporations exclusively from exports.
(8) The corporate tax rate of the corporations holding the industrial registry certificate and actually engaged in production activities is applied with a 1 point discount to the earnings obtained exclusively from production activities. For the part of these earnings corresponding to exports, no additional discount is applied according to the provision of the seventh paragraph.
(9) The discounted rates in the seventh and eighth paragraphs are applied on the corporate tax rate after the other discounts under this article are applied.”
How will advance tax be calculated?
For income taxpayers, advance tax will be calculated by applying the rate (15%) in the first bracket of the income tax tariff to the quarterly earnings of the relevant accounting period. For corporate taxpayers, advance tax rate is applied at the rate of 25% on net corporate income as of the second advance tax period of the 2021 accounting period starting from 1/1/2021 (23% as of 1.1.2022). Advance tax previously paid for the same accounting period, if any, and taxes paid through withholding tax in relation to the earnings subject to advance tax will be deducted from the calculated advance tax, and the amount remaining after the deduction will be declared as advance tax due.
Which exemptions and deductions are taken into account when preparing the advance tax declaration?
Taxpayers can benefit from all discounts and exemptions that they can take into account in their income or corporate tax return during the determination of their earnings subject to advance tax.
What should be done in case of under-declaration of advance tax?
In the event that the advance tax for the previous periods is under-declared by more than 10%, a tax loss penalty and default interest will be applied to the ex-officio or imputed assessment to be made for the under-declared portion. The 10% margin of error should be calculated over the advance tax base that should be declared (not the declared one).
Is a delay interest calculated in case of non-payment of advance tax?
Advance tax amounts that have been accrued but not paid and therefore cannot be deducted from the tax calculated on the annual declaration are canceled. For the canceled advance tax amount, a delay increase is applied from the due date until the start date of the legal period in which the annual declaration must be submitted, which is the date of cancellation.
Can unpaid provisional tax be offset from income tax calculated on the annual return?
It is not possible to offset provisional tax that has been accrued but not paid from income or corporate tax calculated on the annual return. In order for the offsetting process to be carried out, the provisional tax that has been accrued must have been paid.
Can provisional tax that has not been paid in the previous period be offset from the next period return?
It is possible to offset provisional tax that has not been paid in the previous period within the year from the next period return, regardless of the condition of payment. The condition of being paid is sought when making offsets from the annual income tax return. Provisional tax paid in the provisional tax periods related to the relevant accounting period is offset from the income or corporate tax calculated on the annual return.
What is done for provisional tax that has been accrued but not paid?
Provisional tax amounts that have been accrued on three-month earnings but cannot be offset from the tax calculated on the annual return due to non-payment are cancelled. A late payment interest is applied to the provisional tax amount that is cancelled from the due date until the date it should be cancelled (March 1 for income taxpayers and April 1 for corporate taxpayers).
Is it possible to deduct Bağ-Kur premiums in the provisional tax return? If so, in which column is it shown?
Bağ-Kur premiums can be deducted limited to the income, provided that it is documented that the income was paid in the year it was earned. If there is no income declared in the annual return at the end of the period or if it is insufficient, the part of the Bağ-Kur entry deduction and premium amounts that are deducted in provisional tax periods and that can be used according to the annual return; can be deducted from the income declared by income taxpayers, the remaining part cannot be deducted. Bağ-Kur premiums are shown in the “Other Deductions” column on the return.
| PERIOD | DECLARATION | PAYMENT |
| 1st Period (January, February, March) | Until the evening of May 17 | Until the evening of May 17 |
| 2nd Period (April, May, June) | Until the evening of Aug 17 | Until the evening of Aug 17 |
| 3rd Period (July, August, September) | Until the evening of Nov 17 | Until the evening of Nov 17 |
| (*)4th Period (October, November, December) | Until the evening of Feb 17 | Until the evening of Feb 17 |
- *(With the amendment made by Law No. 7338, the fourth provisional taxation period return will not be submitted for the earnings obtained as of 1/1/2022.)
How will provisional tax be applied to taxpayers who start a new business, quit their business and enter liquidation?
Taxpayers who start a new business will start paying provisional tax as of the provisional tax period that includes the date they started their activities. In case of termination of business, provisional tax returns will not be submitted for the periods after the period that includes the date the business was terminated. Institutions that are registered in the trade registry and enter liquidation will pay provisional tax on the provisional tax period profits that include the date they entered liquidation, and will not submit provisional tax returns in the liquidation periods after this period.
Do private construction companies submit provisional tax returns?
Except for companies that do construction and repair work spanning years, all construction companies submit provisional tax returns.
Can income and corporate taxpayers who keep books according to the balance sheet principle offset their previous year losses from the provisional tax?
In calculating the provisional tax base, the previous year losses that can be deducted will be taken into account in determining the income/corporate tax bases.
Source: Revenue Administration
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