T.C.
REVENUE ADMINISTRATION
Izmir Tax Office
Income Taxes Group Directorate
Date: 13.05.2024
Subject: Whether the premiums received from banks for foreign currency protected deposit accounts are exempt from corporate tax according to KVK (Corporate Tax Law)
Your inquiry and the attached application indicate that you are a taxpayer with the Tax Office, and you have a foreign currency protected deposit account in Euros and US Dollars, established as per the Central Bank’s Communiqué No. 2022/27, effective from 30.09.2022. You have received premiums from banks for this account and seek our opinion on whether these premiums are subject to taxation, specifically whether they are exempt from corporate tax.
According to Article 14 of the Corporate Tax Law No. 5520, institutions are exempt from corporate tax on the following types of income:
- Foreign exchange gains due to period-end revaluation of foreign currencies in the balance sheets of institutions as of 31/12/2021, if converted to Turkish lira and deposited in at least three-month Turkish lira deposit accounts.
- Foreign exchange gains and interest, profit shares, and other income earned from Turkish lira deposits converted from foreign currency accounts up to the date of the fourth temporary tax period declaration.
For balances as of 31/3/2022, the President has the authority to extend this exemption until 30/6/2024 for foreign currencies in the institutions’ balance sheets, which can be applied separately or together.
These exemptions will also apply to renewed accounts until 30/6/2024. The provision excludes the third paragraph of Article 5 of the Law for foreign currencies converted to Turkish lira deposit accounts and gold accounts.
Accordingly, if your foreign currencies in the balance sheets on the specified dates are converted into foreign currency protected deposit accounts, you can benefit from the exemption. Additionally, premiums received by your company, considered as deposit interest, can also be exempt from corporate tax.
Source: Revenue Administration
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