Cabinet Decision – Muhasebe News

According to Corporate Tax Law, will there be deductions for the payments related to the computers bought from companies residing abroad?

MuhasebeNews — Thu, 16 Aug 2018 17:00:32 +0000

The conditions about the deductions for the payments related to the computers bought from companies residing abroad in line with article 30 of the Corporate Tax Law Numbered 5520;

1- If the computer programs bought from companies residing abroad are sold to the eventual customers or used in an institution without doing modifications on them and/or multiplying, the income will be regarded as a commercial income and the tax cut will not be applied to that kind of payments.

2- If the rights of reproduction, modification, distribution, display of a computer program are reserved within the scope of Copyright, the purchaser will obtain an intangible right. Furthermore, there will be a tax deduction in the ratio of 20% from the royalty payments made to the company residing abroad, in line with the Cabinet Decision numbered 2009/14593.

3- If the company residing abroad prepares a special computer program for an institution, the profit made by the company residing abroad will be regarded as self-employed income and there will be tax deduction in the ratio of 20% in line with the Cabinet Decision numbered 2009/14593.

4- If there is avoidance of double taxation treaty between the country in where the company reside and our country and there is determined a lower ratio as a tax (that ratio is specified as 10% in the treaties), that ratio will be taken into consideration.

Source: Corporate Tax Law

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.

Are Stock Exchange Securities Subject to Tax?

MuhasebeNews — Tue, 06 Mar 2018 12:30:38 +0000

1- ARE STOCK EXCHANGE SECURITIES IN ISTANBUL STOCK EXCHANGE SUBJECT TO INCOME TAX?
The incomes of real persons, who buy and sell stock exchange securities in Istanbul stock exchange and make a profit from those transactions, are not subject to income tax.

2- ARE STOCK EXCHANGE SECURITIES IN ISTANBUL STOCK EXCHANGE SUBJECT TO WITHHOLDING?
No. Profits gained from stock exchange securities are not subject to income tax withholding.

3- THEY ARE SUBJECT TO WITHHOLDING, BUT THE RATIO IS ZERO SO IT IS REGARDED THAT THERE IS NO WITHHOLDING ACTUALLY.
The gains received through stock exchange securities are subject to tax according to provisional article 67 of the Income Tax Law. With the Cabinet Decision dated 27.4.2012 and numbered 2012/3141, withholding rate applied to future delivery and option contracts, based on stock exchange securities and share index by fully responsibles and limited taxpayers within the scope of provisional article 67, stock exchange securities including covered warrant in Istanbul stock exchange (excluding stock exchange securities of securities investment associations), gains received through stock funds participation certificate is determined as 0%. Consequently, withholding is not applied actually, because withholding rate is “0”.

4- VALUE INCREMENT GAINS ARE NOT SUBJECT TO INCOME TAX.
Furthermore, it belongs to fully responsible, gains received by selling stock exchange securities (kept more than one year and be traded at the exchange) out are not subject to withholding. There is no need to file annual income tax return as increment value tax because duplicated entry 80 of the Income Tax Law will not be applied to these gains

Consequently, there is no need to pay taxes for gains received through buying and selling of stock exchange securities in Istanbul stock exchange.

Source: Provisional article 67 added to article 30 of the Income Tax Law No. 5281

The Payments Made Because of Finding a Customer from Limited Taxpayer Companies and Marketing Related to Products and Services that are Exported Abroad in Turkey!

MuhasebeNews — Fri, 31 Mar 2017 08:22:23 +0000

If the activities of a foreign company which provide services related to products and services exported abroad consist of getting a commission through finding customers and the cost of products, this activity should be considered as a commercial activity. Additionally, there will be no tax cut in line with article 30 of the Corporate Tax Law numbered 5520.

If abovementioned activities are
1- Overseas marketing research,
2- Advertising of the products,
3- Marketing and management services
and they exceed the limits of pure brokerage services, these services will be regarded as professional services and there will be tax cut in the ratio of 20% in line with article 30/1-b of Corporate Tax Law and Cabinet Decision numbered 2009/14593.

On the other hand, provisions of double taxation agreement related to professional services will be taken into consideration.

Source: Corporate Tax Law

What is the Starting Date of Employment in Construction Works in Turkey?

MuhasebeNews — Fri, 24 Mar 2017 08:53:02 +0000

QUESTIONS:

If the agreement is made before the delivery date of workplace in construction works, which date will be the starting date of employment?
Which date will be taken into consideration whether aforementioned work is extending to years’ work or not?

1- Which works are regarded as extending to years works?
Profit or loss should be calculated very definitely at the end of the work in construction and repair works which are extending to years. Furthermore, the whole amount (profit and loss) should be counted as current year revenue and indicated in declaration made in aforesaid year. (article 42 of the Income Tax Law No 193.)

2- Starting Date of Employment in Construction Works
The conditions for extending to years construction and repair works;
2.1- It should be construction and repair work.
2.2- That construction and repair works should be extended over more than one calendar year.
2.3- That construction and repair works should be private or official contract works.
Starting date of employment for construction and repair works:
2.4- construction site delivery date will be based on, if the construction site delivery date is not specified in the agreement.
2.5- starting date of the work will be based on, if the construction site delivery date is not specified in the agreement.
2.6- the effective date of contract will be based on, if none of them is mentioned in the agreement.

3- What is the withholding rate in extending to years construction and repair works?
If the construction and repair works will be completed the next year(s) after the work is started, it is compulsory to make a deduction in the ratio of 3% through progress payment. (In line with the Cabinet Decision numbered 2009/14592)

4- Who will make the deduction of withholding?
The principal should make the deduction on behalf of the contractor (builder) and pay that amount into the tax office.

5- Can the contractor (builder) deduct that amount from his/her tax?
That contractor (builder) can deduct that amount from calculated tax (if any), If there is no tax or the amount of tax is less than the amount of deduction, he/she may claim the difference back from the tax Office.

Source: Revenue Administration