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What are the Meanings of Legally Obligated and Limited Taxpayer in Turkey?

MuhasebeNews — Mon, 19 Mar 2018 16:00:56 +0000

1- WHAT IS THE MEANING OF LEGALLY OBLIGATED?
Companies whose registered office [1] or business center [2] is in Turkey will be subjected to tax through their incomes that they gain both in Turkey and abroad.

If registered office or business center of institutions listed below is in Turkey, they will be subjected to tax as legally obligated.
    1.1- Company with share capital,
    1.2- Cooperatives,
    1.3- State-owned economic enterprise,
    1.4- Commercial enterprise belonging to associations or foundations,
    1.5- Joint ventures,

Sample-1: Fontaine citizen of France,
– He was employed on 20 March 2010 in Turkey and then he went on leave on 15 May 2016. (6 years 1 month 26 days).
– He came back to Turkey on 20 October 2016 and he kept at his job until 31 December 2016. (2 months 2 days).
Liabilities of Fontaine for 2016 are explained below.
Explanation-1:
Fontaine is legally obligated.
Even though he stayed in Turkey less than 6 months separately, the duration of his staying for a calendar year is more than 6 months.
Legal Basis-1:
Article related to “Legally Obligated” of the Income Tax Law is stated below;
Persons listed below are regarded as domiciled in Turkey and they are considered as legally obligated:
1- Person whose residence is in Turkey. (Residence is a place stated in article 19 and its consecutive articles of the Civil Law.)
2- Person who persistently resides in Turkey more than 6 months in a calendar year. (Provisional leaving does not affect time of settlement in Turkey.)

2- WHAT IS THE MEANING OF LIMITED TAXPAYER?
Companies whose registered office and business center are not in Turkey will be subjected to tax through their incomes that they gain only in Turkey.

If registered office and business center of institutions listed below are not in Turkey, they will be subjected to tax as limited taxpayer.
2.1- Company with share capital,
    2.2- Cooperatives,
    2.3- State-owned economic enterprise,
    2.4- Commercial enterprise belonging to associations or foundations,
    2.5- Joint ventures,

3- CORPORATE INCOME CONSISTS OF INCOMES AND REVENUES STATED BELOW IN LIMITED LIABILITY TO TAX;
3.1- Commercial incomes gained through businesses made with foreign institutions whose registered office or business center in Turkey or through these kinds of institutions.
(Even though they carry abovementioned conditions, if they gain incomes through goods purchased in Turkey for export and they send them to abroad without selling them in Turkey, their incomes will not be regarded as obtained in Turkey. Selling in Turkey means that either customer or supplier or both of them should be in Turkey or sales agreement should be made in Turkey.)
(In line with Tax Procedure Law provisions numbered 04.01.1961 – 213)
3.2- Incomes gained in Turkey from agricultural enterprise,
   3.3- Self-employment earnings gained in Turkey ,
   3.4- Revenues gained by renting estate and assets and rights in Turkey,
     3.5- Income from moveable capitals gained in Turkey
3.6- Other incomes and revenues gained in Turkey.

Sample 2: Mr. John citizen of USA,
– He was in Turkey between the dates of 01.10.2015-10.12.2016 and he gained commercial income from commercial activities that he carried out in Turkey and America in that period. (1 year 2 months 10 days)
– By 2015, he gained 100.000 TL in Turkey and 200.000 TL in USA
– By 2016, he gained 300.000 TL in Turkey and 500.000 TL in USA.
The income being subjected to tax is explained below.
Explanation -2:
Mr. John resided in Turkey less than 6 months in calendar year 2015, he was regarded as limited taxpayer.
During that period of time, his income gained in Turkey and valuing at 100.000 TL would be subjected to tax in Turkey.
However, by 2016 he resided in Turkey more than 6 months, so he will be regarded as legally obligated.
Total amount of income is 800.000 TL (300.000+500.000), which he gained both in USA and in Turkey, and income tax would be calculated through that amount.
If a taxpayer is subjected to tax in the ratio of income that he gained in America, it can be deducted from the tax calculated in Turkey.
Legal Basis-2:
Article related to “Legally Obligated” of the Income Tax Law is stated below;
Persons listed below are regarded as domiciled in Turkey and they are considered as legally obligated:
1- Person whose residence is in Turkey. (Residence is a place stated in article 19 and its consecutive articles of the Civil Law.)
2- Person who persistently resides in Turkey more than 6 months in a calendar year. (Provisional leaving does not affect time of settlement in Turkey.)

[1] Registered Office: It is an office stated in law of establishment, regulations, main status or agreements of institutions being subjected to tax.
[2] Business Center: It is a center where all businesses are gathered virtually and managed.

Source: Corporate Tax Law Numbered 5520 (Article 3)

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.

Volkswagen Tries to Win Back its Customers!

MuhasebeNews — Fri, 10 Nov 2017 08:00:46 +0000

German car maker Volkswagen offered 6 years warranty to win back its US customers!

After the diesel emmision scandal, Volkswagen tries to win back its customers again with SUV warranties that it said will be the longest in the United States.

By this means, 6 years warranty will be the longest in the United States.

Source: Euronews

Jobless Claims in U.S. Rise to Four-Week High Amid Holiday!

MuhasebeNews — Sat, 29 Apr 2017 07:43:13 +0000

Filings for U.S. unemployment benefits rose to a four-week high last week, interrupting a run of subdued firings, a Labor Department report showed Thursday.

Jobless claims increased by 14,000 to 257,000 (forecast was 245,000) in 22 April. Number of people continuing to receive jobless benefits rose by 10,000 to 1.99 million in the week ended April 15 (these data reported with one-week lag).

Prior week’s reading was revised to 243,000 from 244,000.

Source: Ministry of Economy

U.S. Producer Prices Declined in March!

MuhasebeNews — Sat, 15 Apr 2017 06:50:21 +0000

Wholesale prices in the U.S. declined in March for the first time since August 2016, a sign broader inflation will accelerate only gradually, a Labor Department report showed Thursday.

The producer-price index decreased 0.1% (forecast was for no change) following a 0.3% advance the prior month. From a year earlier, wholesale prices were up 2.3% (forecast was 2.4%).

Source: Bloomberg

U.S. Jobless Claims Decreased!

MuhasebeNews — Sat, 15 Apr 2017 06:43:00 +0000

Fewer Americans than forecast filed for unemployment benefits last week, with applications hovering just above a four-decade low, a Labor Department report showed Thursday.

Jobless claims decreased by 1,000 to 234,000 (forecast was 245,000) in the week ended April 8. The prior week’s reading was revised to 235,000 from 234,000.

The number of people continuing to receive jobless benefits dropped by 7,000 to 2.03 million in the week ended April 1 (data reported with one-week lag).

Source: Bloomberg

Citigroup Rises Its Profit!

MuhasebeNews — Fri, 14 Apr 2017 06:15:35 +0000

Citigroup has risen its quarterly profit to 17%!

The fourth biggest US bank Citigroup reported a 17% rise in quarterly profit, boosted by strong fixed-income trading as clients adjusted their positions following rate hikes by the Federal Reserve and changes in the forex and credit markets.

On the other hand, net profit rose to $4.09 billion or $1.10 per share.

Source: Euronews

FED’s New Target Has Been Revealed!

MuhasebeNews — Tue, 11 Apr 2017 08:05:36 +0000

FED Chair Janet Yellen gave informations about their new target.

Yellen has explained that they plan to raise US interest rates gradually in order to sustain healthy growth.

She also added that now that years of aggressive monetary policy easing has nursed the economy back to its current “pretty healthy” state, the aim now is to allow “the economy to kind of coast and remain on an stable state,”.

Source: Euronews

Change in Banking Regulations in America!

MuhasebeNews — Mon, 10 Apr 2017 06:18:12 +0000

President Donald Trump has given public a piece of good news about regulating banking regulations!

Presidend Donald Trump promised public that he would do a major haircut on Dodd-Frank regulations which were legislated in order to cope with the economic crisis.

However, it has been come out that those regulations prevents major banks to employ more people.

Source: Euronews

Claims for U.S. Jobless Benefits Increase to Seven-Week High

MuhasebeNews — Fri, 24 Mar 2017 09:31:36 +0000

Jobless claims increased by 15,000 to 258,000 in the week ended March 18, a Labor Department report showed Thursday. The median forecast in a Bloomberg survey called for 240,000. The four-week average for all jobless claims rose to 240,000 from 239,000 in the prior week. The number of people continuing to receive jobless benefits decreased by 39,000 to 2 million. (23.03.2017)

Source: Bloomberg