Council of Ministers – Muhasebe News

What is Income Withholding Tax Incentive Regarding State Aids?

MuhasebeNews — Sat, 01 Dec 2018 14:00:14 +0000

For the investments done until 31/12/2023 in the provinces determined by the Council of Ministers according to their statistical regional unit classifications, national income per capita or socioeconomically development level, within the scope of the investment incentive certificates issued by the Ministry of Economy; the income tax calculated over the gross wage amount of the minimum wage applied to the employees over 16 age working and employed as it is foreseen in the incentive certificates, is cancelled from the withholding declaration fully or partly for the next 10 years after the investment starts running.

Source: Revenue Administration

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.

What is Joint Stock Company?

MuhasebeNews — Sat, 17 Mar 2018 06:00:35 +0000

1- WHAT IS JOINT STOCK COMPANY?
1.1- Joint-stock company is a company whose capital is declared and divided into shares and who is only responsible for its assets because of its debts.
1.2- Shareholders are responsible to the company with their shares that they undertake.

***Except special provisions, these parts of provisions are applied to joint stock companies being subjected to special provisions.

2- WHAT ARE INCLUDED IN THE SUBJECT OF JOINT STOCK COMPANIES?
Joint stock companies can be established for every kind of legal economical purposes and subjects.

3- WHAT SHOULD BE THE AMOUNT OF CAPITAL IN ORDER TO ESTABLISH A JOINT STOCK COMPANY?
3.1- Registered capital, which is undertaken as a whole in articles of incorporation, cannot be less than 50.000 Turkish Lira. As for non-public joint stock companies which accepts registered capital system showing the maximum realm of authority of board of directors for capital increase, initial capital cannot be less than 100.000 Turkish Lira. Minimum capital amount can be increased by the Council of Ministers.
3.2- Within the scope of this law, initial capital in joint stock companies with registered capital is compulsory to provide in the establishment and when they move into this system. On the other hand, issued capital represents the total amount of nominal value of issued shares.
3.3- Unless non-public joint stock companies have necessary conditions, they are able to log out of registered capital system by getting permission from Ministry of Customs and Trade. Moreover, if they fail to fulfil the conditions while logging in the system, they can be logged out of the system by the Ministry even if they have no claim.

***Provisions of article 12 of Capital Market Law dated 28.07.1981 and numbered 2499 are reserved.

Source: Turkish Commercial Code

What is the Corporate Tax Ratio of Merged Producing SMEs in Turkey?

MuhasebeNews — Tue, 23 May 2017 09:06:16 +0000

1- WHAT IS THE CORPORATE TAX RATIO?
Corporate tax ratio is 20% over company’s income.

2- WHO PAYS ADDITIONAL TAX AND FOR WHAT IS IT PAID?
Corporate taxpayers pay advance tax (limited in limited taxpayers with commercial incomes and incomes from agriculture)
2.1- In order to set off corporate tax of current taxation period
2.2- According to provisions stated in Corporate Tax Law,
2.3- In the ratio of corporate tax of current period.

The provisions applied to legally obligated institutions are also valid for limited taxpayers.

3- WHAT IS THE CORPORATE TAX RATIO OF MERGED PRODUCING SMES?
Council of Ministers has an authority to apply 75% discount for Corporate Tax on;
3.1- The incomes gained exclusively from productive activities in financial period ending at the date of merging and
3.2- Income gained from productive activities including the merging company’s financial period (when the merger takes place) of the small-and medium-scaled enterprises, dealing with containing and virtual productive activities for merging industrial registry certificate within the scope of article 19 of the Corporate Tax Law. Furthermore, it has authority to differentiate this discount ratio separately or together in respect for sectors, business branches, productivity areas, regions and financial periods or for institutions producing medium and high technology products or manufacturer and exporter. Additionally, the Ministry of Finance has an authority to determine rules and procedures related to enforcement of this sub clause.

Source: Corporate Tax Law

If You Have 1.5 Million Dollars, You May Get Turkish Citizenship!

MuhasebeNews — Fri, 05 May 2017 12:46:11 +0000

The Council of Ministers has added a new sub clause to the second clause of article 20 of the Regulation on Turkish Citizenship Law enacted with the Cabinet Decision numbered 2010/39 and dated 11.02.2010.

When it is determined by the Capital Markets Board that a person has share of real estate investment trust valuing at 1.5 million USD or keeps share of venture capital investment for 3 years, he/she will be able to get Turkish Citizenship.

Previously, with the Cabinet Decision dated 12.01.2017, it has been decided that if a person keeps an asset valuing at 1 million USD for 3 years without selling it, or has fixed capital valuing at 2 million and deposits valuing at 3 million USD, he/she will have Turkish Citizenship.

Source: Ministry of Labor and Social Security

What is Value Added Tax in Turkey?

MuhasebeNews — Thu, 04 May 2017 11:01:21 +0000

In Turkey, the Value Added Tax (VAT) Law entered into force on January 1st, 1985. By the VAT Law, some indirect taxes on consumption were abolished.

Turkish taxation system levies value added tax on the supply and the importation of goods and services. Liability for VAT arises;
(a) When a person or entity performs commercial, industrial, agricultural or independent professional activities within Turkey,
(b) When goods or services are imported to Turkey.

VAT is levied at each stage of the production and the distribution process.
However;
liability for the tax levies on the person who supplies or imports goods or services, the real VAT burden is on the final consumer. This result is achieved by a tax-credit method where the computation of the VAT liability is based on the difference between the VAT liability of a person on his sales (output VAT) and the amount of VAT that he has already paid on his purchases (input VAT). The Turkish VAT system employs multiple rates and the Council of Ministers is authorized to change the VAT rates within certain limits.

Source: Revenue Administration

Turkish Citizenship Law No 5901

MuhasebeNews — Wed, 29 Mar 2017 08:26:05 +0000

What is the Objective of This Law?
Article 1 – (1) The objective of this Law is to determine the principles and the procedures regarding the conduct of affairs and processes relating to the acquisition of Turkish citizenship.

Citizenship Acquired by Birth
Article 6 – (1) Turkish citizenship by birth shall be automatically acquired on the basis of descent or birth place. Citizenship acquired by birth shall be effective from the moment of birth.

Citizenship Acquired After Birth
Article 9 – (1) Turkish citizenship shall be acquired after birth either by a decision of the competent authority or by adoption or by using the right to choice.

Exceptional Circumstances in the Acquisition of Turkish Citizenship
Article 12 – (1) Foreigners mentioned below can acquire Turkish citizenship by decision of the Council of Ministers acting on a proposal from the Ministry provided that they have no quality constituting an obstacle in respect of national security and public order.
a) People who bring industrial plants into Turkey or render or are being considered to render in future outstanding services in the scientific, technological, economic, social, sporting, cultural and artistic fields and about whom a reasonable offer has been made by the ministries relevant.
b) Person whose naturalization is regarded necessary.
c) Person who is regarded as immigrant.

The Acquisition of Turkish Citizenship by Marriage
Article 16 – (1) Turkish citizenship cannot automatically be acquired by marriage with a Turkish citizen. A foreigner who has been married to a Turkish citizen for at least three years and whose marriage still continues can apply for the acquisition of Turkish citizenship.
The applicants shall fulfill the conditions mentioned below;
a) Living within the unity of marriage,
b) Abstaining from acts incompatible with the unity of marriage,
c) Having no quality constituting an obstacle in respect of national security and public order.
(2) In case the marriage ends by death of the spouse, who is a Turkish citizen, after the application has been lodged, the applicant will not be able to require fulfilling the condition laid down in subparagraph (a) of the first paragraph.
(3) In case of the declaration of nullity of the marriage, foreigners who acquire Turkish citizenship by marriage will keep Turkish citizenship provided they had entered into marriage in good faith.

The Acquisition of Turkish Citizenship by Adoption
Article 17 – (1) A minor child adopted by a Turkish citizen can acquire Turkish citizenship from the date of adoption provided he/she has no quality constituting an obstacle in respect of national security and public order.

Source: Turkish Citizenship Law No 5901

How to Get Residence Permit in Turkey

MuhasebeNews — Mon, 13 Mar 2017 14:31:55 +0000

1- Short-Term Residence Permit for Foreigners
For a short-term residence permit, which is issued for a period of one year at most, foreigners who own immovable property in Turkey or will establish a business or commercial connections in Turkey should submit the following documents to the relevant Provincial Directorate of Immigration Administration:

1.1- Initial Application
1.1.1- Residence permit application form
1.1.2- The original and a copy of the passport or travel document
1.1.3- Four passport-size photographs
1.1.4- Declaration regarding sufficient and sustainable financial resources for the duration of the stay (Stated in the application form. The authority may request supporting documents.)
1.1.5- Official document regarding the applicant’s ownership of the residence*
1.1.6- Valid medical insurance (one of the following shall be sufficient):

o Document facilitating health services in Turkey within the scope of bilateral social security agreements
o Provision document issued by the Social Security Institution o Document regarding the application made to the Social Security Institution to be covered by the general health insurance o Private health insurance

1.2. Application for Extension
1.2.1- Residence permits application form
1.2.2- The original and a copy of the passport or travel document
a. Two passport-size photographs
b. Declaration regarding sufficient and sustainable financial resources for the duration of the stay (Stated in the application form. The authority may request supporting documents.)
c. Official document regarding the applicant’s ownership of the residence*
d. Submission of the previous residence permit document**
e. An invitation letter or documents of such written by the person or companies to be contacted upon the authority’s request**
f. Valid medical insurance (one of the following shall be sufficient):

o Document facilitating health services in Turkey within the scope of bilateral social security agreements
o Provision document issued by the Social Security Institution o Private health insurance including the extension period

*required for foreigners owning immovable property in Turkey **required for foreigners that will establish a business or commercial connections in Turkey

2- Long-Term Residence Permit for Foreigners
For a long-term residence permit, foreigners that have continuously resided in Turkey for at least eight years should submit the following documents to the relevant Provincial Directorate of Immigration Administration:

2.1- Initial Application
2.1.1- Residence permit application form
2.1.2- The original and a copy of the passport or travel document
2.1.3- Submission of the previous residence permit document
2.1.4- Two passport-size photographs
2.1.5- The document showing that the applicant has not received any social aid from governmental institutions and organizations in the last three years
2.1.6- Declaration regarding sufficient and sustainable financial resources for the duration of the stay
2.1.7- Police record document
2.1.8- Valid medical insurance (one of the following shall be sufficient):

2.2.Application for Extension
It is issued indefinitely and is not extended.

As per the new regulations published in the Official Gazette on January 12, 2017, foreigners who meet any of the following conditions may be eligible for Turkish citizenship, subject to the proposal of the Ministry and the decision of the Council of Ministers:
2.2.1- Proven by the Ministry of Economy to have made a minimum fixed capital investment of USD 2,000,000
2.2.2- Proven by the Ministry of Environment and Urbanization to have acquired an immovable property worth a minimum of USD 1,000,000 with a title deed restriction on its resale for at least three years
2.2.3- Proven by the Ministry of Labor and Social Security to have created jobs for at least 100 people
2.2.4- Proven by the Banking Regulation and Supervision Agency to have deposited at least USD 3,000,000 in banks operating in Turkey with the condition of not to withdraw for at least three years
2.2.5- Proven by the Undersecretaries of the Treasury to have bought at least USD 3,000,000 worth of government bonds with the condition that they cannot be sold for at least three years

Date: 13 March 2017