The general assembly is entitled to pay and decide on the attendance fee of the board members of a joint stock company. Therefore, it is only under the authorization of the general assembly to pay, designate and increase the attendance fee. The Board of Directors of the joint stock company is not authorized to pay, increase on decrease the attendance fee.

Source: İSMMMO
Legal Notice: The information in this article is intended for information purposes only. It is not intended for professional information purposes specific to a person or an institution. Every institution has different requirements because of its own circumstances even though they bear a resemblance to each other. Consequently, it is your interest to consult on an expert before taking a decision based on information stated in this article and putting into practice. Neither MuhasebeNews nor related person or institutions are not responsible for any damages or losses that might occur in consequence of the use of the information in this article by private or formal, real or legal person and institutions.

Those people and enterprises that are tenants have to withhold income tax from the gross amount of their rental payments at the rate of 20%.

This withholding tax will also be made from the rent paid in advance for the upcoming months and years.

For example; when the rent is paid in advance for 3 months or 1 year for a workplace, the total rent paid will be subject to tax withholding.

If tenants are taxpayers whose commercial earnings determined according to simple method, they shall not withhold in rental payments.

In case that the immovable property leased out is used both as house and workplace; the total rent is subject to withholding as long as it is used as workplace partially or in whole.

Source: GİB
Legal Notice: The information in this article is intended for information purposes only. It is not intended for professional information purposes specific to a person or an institution. Every institution has different requirements because of its own circumstances even though they bear a resemblance to each other. Consequently, it is your interest to consult on an expert before taking a decision based on information stated in this article and putting into practice. Neither MuhasebeNews nor related person or institutions are not responsible for any damages or losses that might occur in consequence of the use of the information in this article by private or formal, real or legal person and institutions.

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How to obtain the rental income?

What Are The Expenses To Be Deducted When Determining The Rental Income? -Lump Sum Expenses Method

Expenses To Be Deducted When Determining The Rental Income? -Actual Expenses Method

Losses arising from the expenditure surplus in the calculation of the net amount of income from immovable property can be deducted from income to be declared in the following years not for more than 5 years.

There are two exceptions to this rule:

• In the event of any loss resulting from deducting the amount of the rent of the house or lodging paid by the lessor from the rental income of their house, such loss cannot be subject to deduction from the income from immovable property to be obtained in the following years.

Non-deductible part of the amount corresponding to 5% of the acquisition value which has been subject to deduction of income from the immovable rented as house is not considered as an expenditure surplus.

Accordingly, it is not possible to consider an expenditure surplus as loss in these situation.

Source: İSMMMO
Legal Notice: The information in this article is intended for information purposes only. It is not intended for professional information purposes specific to a person or an institution. Every institution has different requirements because of its own circumstances even though they bear a resemblance to each other. Consequently, it is your interest to consult on an expert before taking a decision based on information stated in this article and putting into practice. Neither MuhasebeNews nor related person or institutions are not responsible for any damages or losses that might occur in consequence of the use of the information in this article by private or formal, real or legal person and institutions.

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What Are The Expenses To Be Deducted When Determining The Rental Income? -Lump Sum Expenses Method

Expenses To Be Deducted When Determining The Rental Income? -Actual Expenses Method

Taxpayers who have opted for the lump sum method can, after deducting the amount of exception from their rental income, set off the lump sum expenses at 15% of the remaining amount against actual expenses.

It is not possible to opt for lump sum expenses method in the case of leasing rights. For instance, taxpayers, who gain office rental income and income from leasing rights, should choose actual expenses method since they should declare rental income from leasing rights at their tax return.

Taxpayers who have chosen the lump sum expenses method cannot choose actual expenses method before two years have elapsed.

Lump sum expenses rate is determined at 15% of the revenue to be applied to rental income from 1/1/2017.

Source: gib.gov.tr
Legal Notice: The information in this article is intended for information purposes only. It is not intended for professional information purposes specific to a person or an institution. Every institution has different requirements because of its own circumstances even though they bear a resemblance to each other. Consequently, it is your interest to consult on an expert before taking a decision based on information stated in this article and putting into practice. Neither MuhasebeNews nor related person or institutions are not responsible for any damages or losses that might occur in consequence of the use of the information in this article by private or formal, real or legal person and institutions.

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What is the basis for low or no value for rental income?

What are the property and rights that are subjects of rental income?

How to obtain the rental income?

What Are The Expenses To Be Deducted When Determining The Rental Income? -Lump Sum Expenses Method

Example: Taxpayer (B) rented his house from 360 TL per month and obtained 4.320 TL annually in 2018. In this case, rental income from house less than the exemption amount of 4.400 TL is not to be declared by the taxpayer.

In the case the rental income is not declared between the dates in time or the rental income is understated, it will not be possible to benefit from the exception amount of 4.400 TL for the year 2018.

However, those who submit declarations, before any determination is made by the administration, on their own accord for their rental income which they did not declare or include in their declarations on time, will benefit from the related exception.

If the rental income from house exceeds the amount determined for exception, the amount of exception should be deducted from rental income to be declared in the annual tax declaration.

The exception applies only to rental income from properties that have been rented as house. Taxpayers whose rental income from house under 4.400 TL in 2018  do not file a tax declaration for these incomes.

For instance, if there is a rental income obtained and declared at the same time both from house and workplace, the exception applies only to the rental income obtained from house, not to the rental income from workplace.

Persons, who have to declare their income from business, agriculture or professional   activities, are not eligible to benefit from 4.400 TL of exception. Besides, persons who gain rental income equal to or above 4.400 TL, of whose gross total of their income including wage, capital investment income, rental income and other incomes exceeding the amount 120.000 TL for the year 2018 jointly or severally, cannot benefit from exception.

In case more than one person has the ownership of a house, the taxation of the rental income obtained from such house will be subject to 4.400 TL (for the year 2018) of exception separately for each proprietor.

Thus, if the inheritance is not shared, every inheritor will benefit from the exception separately.

In case one taxpayer obtains rental income from more than one house, the exception will be applied at once to the total amount of rental income.

Kaynak: gib.gov.tr
Yasal Uyarı: Bu içerikte yer alan bilgi, görsel, tablolar, açıklama, yorum, analiz ve bir bütün olarak içeriğin tamamı sadece genel bilgilendirme amacıyla verilmiştir. Kişi veya kuruma özel profesyonel bir bilgilendirme ve yönlendirmede bulunma amacı güdülmemiştir. Konu ile benzerlik gösterse de her işletmenin kendi özel şartları nedeniyle farklı durumları olabilir. Bu nedenle, bu yazıda belirtilen içerikte yola çıkarak işletmenizi etkileyecek herhangi bir karar alıp uygulamaya geçmeden önce, uzmanına danışmanız menfaatiniz gereğidir. Muhasebenews veya ilişkili olduğu kişi veya kurumlardan hiç biri, bu belgede yer alan bilgi, tablo, görsel, görüş ve diğer türdeki tüm içeriklerin özel veya resmi, gerçek veya tüzel kişi, kurum ve organizasyonlar tarafından kullanılması sonucunda ortaya çıkabilecek zarar veya ziyandan sorumlu değildir.

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“Equivalent rental value” is taken as bases in case of low or no value for rental income. According to this basis, equivalent rental income principle shall be applied on the conditions of;

• Leaving the immovable property to the usage of other persons for free,
• Lower value of rental income of rented immovable property than the equivalent rental value. The equivalent rental value in rented buildings and lands is the rental value determined by authorized specific authorities or courts, if it is available.

The equivalent rental value in property and rights for other than buildings or lands is 10% of their cost price. If this cost is not known, it is 10% of determined values of them calculated in accordance with valuation of property provisions of Tax Procedure Law.

Example: Taxpayer (A) gave up a flat valued 400.000 TL to one of his friends without charge in 2018.

Accordingly, although taxpayer does not obtain rental income, he should be supposed to obtain rental income in accordance with the amount reached after the calculation of equivalent rental value.

Equivalent rental value: 400.000 x 5% = 20.000 TL. This amount should be considered as income to be declared.

Equivalent rental value principle is not applied under the following conditions:

• Leaving empty immovable properties to other person’s residence in order to protect the immovable,
• Allocating the buildings to the residence of the property owner’s children, mother and father or siblings (But, if more than one house allocated to the residences of each of these persons, equivalent rental value is not calculated only for one of these houses. For example, if owner of property has allocated two houses to the residence of his child, it will not be calculated equivalent rental value for one house and for the second one it will be calculated.)
• Accommodating of relatives with the property owner in the same house or flat,
• Leasing done by General Budget and by Annex Budget Offices, by provincial administrations and municipalities and by other public institutions and organizations.

Source:gib.gov.tr
Legal Notice: The information in this article is intended for information purposes only. It is not intended for professional information purposes specific to a person or an institution. Every institution has different requirements because of its own circumstances even though they bear a resemblance to each other. Consequently, it is your interest to consult on an expert before taking a decision based on information stated in this article and putting into practice. Neither MuhasebeNews nor related person or institutions are not responsible for any damages or losses that might occur in consequence of the use of the information in this article by private or formal, real or legal person and institutions.

It is not required to prepare an invoice for the loans between companies. About the payments; you should use 232 account for debts and 102 account for receivables. For the payments such as the interest, late interest, and exchange differences, the rules of transfer pricing and distribution of hidden profits must be followed.

Legal Notice: The information in this article is intended for information purposes only. It is not intended for professional information purposes specific to a person or an institution. Every institution has different requirements because of its own circumstances even though they bear a resemblance to each other. Consequently, it is your interest to consult on an expert before taking a decision based on information stated in this article and putting into practice. Neither MuhasebeNews nor related person or institutions are not responsible for any damages or losses that might occur in consequence of the use of the information in this article by private or formal, real or legal person and institutions.

Obtaining of rental income is bound to collection principle. In order to tax the rental income in accordance with the collection principle, it should be collected in cash or in kind.

Collection of Rental Income in Cash

Collection of rental income in cash states that the payment of rent in Turkish Liras or in foreign currency. Received cheques are also taken into account as collection in cash.

• Rental income collected by the taxpayers relating to that year or previous years is taken into account as the income of the year which it is collected in.

For example, if 2015, 2016 and 2017 rental income is collected in 2018, this income shall be taken into account as the income of year 2018.

• Rental income relating to prospective years which is collected in advance is not taken into account as the income of the year which it is collected in but as the income of the years which the income is related to.

For example, if 2018, 2019 and 2020 rental income is collected in 2018, each year’s rental income shall be declared in the related year.

In terms of foreign currency, rental payment and gross revenue is calculated according to the exchange rate announced by The Central Bank of Republic of Turkey on collection date.

Collection of Rental Income in-kind

If the rental pyment is collected in-kind, payments are valued according to Tax Procedure Law.

 Collection and Payment of Leasing by Means of Banks or Postal Administration

Those who obtain a rental income and their tenants;

• For residence, 500 TL or over for each house,
• For workplace, without a limitation of amount should make the payments and collection of the leasing by means of banks, financial institutions or postal administrations and are obliged to authenticate their payments and collections through documents issued by these institutions.

Since receipt or monthly statement is issued for the payment and collection while using mediums like depositing money, money order, cheque or credit cart by means of banks, financial institutions or postal administrations, these documents shall be accepted as certifying documents. Payment and collection carried out via internet banking are also evaluated in the same scope.

The fine which shall be applied to persons who do not comply with the aforesaid obligations is 5% of each transaction’s amount and it should be no lower than the amount of special irregularity fine determined for that year in accordance with the repeating Article 355 of Tax Procedure Law.

Records on Rental Incomes of Taxpayers Who Have Bookkeeping Obligation

According to the Tax Procedures Law No. 213, real person taxpayers who are obliged bookkeeping should register rental incomes subject to income tax and related expenses to a separate page of general ledger, operating account or self-employment income book or to a separate book or sheet separately, without  mixing and uniting with accounts keeping for other earnings.

Source: gib.gov.tr
Legal Notice: The information in this article is intended for information purposes only. It is not intended for professional information purposes specific to a person or an institution. Every institution has different requirements because of its own circumstances even though they bear a resemblance to each other. Consequently, it is your interest to consult on an expert before taking a decision based on information stated in this article and putting into practice. Neither MuhasebeNews nor related person or institutions are not responsible for any damages or losses that might occur in consequence of the use of the information in this article by private or formal, real or legal person and institutions.

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The VAT rates for the selling of properties that are the company’s assets until 31.03.2019 are;

1% if the property is under 150 square meters,
8% if the property is over 150 square meters.

Legal Notice: The information in this article is intended for information purposes only. It is not intended for professional information purposes specific to a person or an institution. Every institution has different requirements because of its own circumstances even though they bear a resemblance to each other. Consequently, it is your interest to consult on an expert before taking a decision based on information stated in this article and putting into practice. Neither MuhasebeNews nor related person or institutions are not responsible for any damages or losses that might occur in consequence of the use of the information in this article by private or formal, real or legal person and institutions.

IN TERMS OF VAT

In terms of General Communique on VAT Application it can be explained as; ‘’If the service brought to Turkey is in relation with the company’s activities in Turkey, the service is used in Turkey; if the service is not in relation with activities in Turkey, if its consequences are outside of Turkey, it is not used in Turkey.’’

In terms of General Communique on VAT, the VAT for services provided from abroad must be declared as reverse charge VAT by the addressee within the country making use of the service.

To deduce on VAT declaration (number: 1) the VAT
related to the import of services in accordance with Articles 1 and 2 of VAT Law;

Turkish persons and authorities shall give the reverse charge VAT declaration (Number: 2) and make payment to the related tax authority and deduce the VAT by showing it on the VAT declaration (Number: 1).

On condition that the utilization takes place in Turkey and there is no provision impeding the VAT;

-Getting technical, installation or consultancy services from abroad,

-Getting or renting incorporeal rights from abroad (know-how, brand etc.),

-Bringing a rented moveable (e.g. construction equipment)  from abroad and using it in Turkey

-getting software services from abroad,

-getting repair-maintenance services from abroad,

-late interests related to the supply of goods from abroad,

-the service of a person who is an employee of a foreign company and works temporarily in Turkey

To not be subject to VAT for a service from abroad;

-It must be a service that is not subject to VAT,

– The service must not be imported to Turkey (or performed and made use of)

– The imported service must be one that is subject to VAT exemption.

All services provided from abroad and that do not fulfill these three conditions are subject to VAT.

A tax agreement between Turkey and the provider’s country of residence do not affect the VAT liability as tax agreements do not inclose VAT.

IN TERMS OF WITHHOLDING

Incomes of real and legal persons in Turkey obtained through their services abroad are subject to income and corporate tax in Turkey unless otherwise implied in tax agreements.

Withholding in the amount that is specified in Cabinet Decision in accordance with Corporate Income Tax must be deducted from the payments made abroad and declared with the withholding tax return.

In accordance with Article 30 of Corporate Tax Law numbered 5520, to withhold;

-The service provider must be a resident of a foreign country.

-In terms of its natüre, the service must be subject to withholding pursuant to Article 30 of Corporate Tax Law.

-A double taxation avoidance agreement can not be in force between the related countries and a there can not be a provision avoiding the withholding in the tax agreement.

Also payments that are within the scope of Article 94 of Income Tax Law and Article 30 of Corporate Tax Law, unless otherwise implied, the necessary ones must be withheld.

-salaries of employees from abroad (if a foreign person who is employed in another country also works as an employee or executive of a company in Turkey, their earnings are referred to as ‘’self-employment income’’, causing the payments made to that employee to be subject to withholding in accordance with Article 30 of Corporate Income Tax),

-remunerations of businesses regarded as self-employment such as engineering, maintenance, consultancy, education, writing a software, translating,

-payments for lease and rental services (financial or normal rents),

-interests for lending, deposit or similar fundings

-late interests related to the supply of goods from abroad

-payments for incorporeal rights such as copyrights, concession, business titles, trademark or know-how or rents

As well as;

-All kinds of commission payments,

-All kinds of payments regarding advertisements and notifications,

-Payments for overseas transport

-Insurance premium payments,

– Payments for businesses outsourced abroad

-Audit payments,

-Travel costs (hotel, restaurant, transportation, communication etc.)

-Fair participation costs,

-satellite rent payments,

Source: İSMMMO
Legal Notice: The information in this article is intended for information purposes only. It is not intended for professional information purposes specific to a person or an institution. Every institution has different requirements because of its own circumstances even though they bear a resemblance to each other. Consequently, it is your interest to consult on an expert before taking a decision based on information stated in this article and putting into practice. Neither MuhasebeNews nor related person or institutions are not responsible for any damages or losses that might occur in consequence of the use of the information in this article by private or formal, real or legal person and institutions.