4. BANKING AND INSURANCE TRANSACTIONS TAX
(Law No. 6802, Official Gazette No. 9362 dated 23.07.1956)
The subject of the tax is transactions and services performed by banks, bankers and insurance companies. Taxpayers are banks, bankers and insurance companies. All transactions and services performed by banks and insurance companies are subject to banking and insurance transactions tax (BITT) regardless of the nature of the transaction. There will be the tax upon the money, which they collect under the name of interest, commission and expenditure because of the services they performed on behalf of them. Bankers’ certain transactions and services performed and stated in the Law No. 6802 are the subject of the Tax. These are the bankers’ transactions and services. Other transactions of bankers are subject to VAT. The transactions of banks and insurance companies are exempt from VAT, but are subject to BITT, which is due on the gains of such companies from their transactions. The purchase of goods and services by banks and insurance companies is subject to VAT but is considered as an expense or cost for recovery purposes. The general BITT rate is 5% and some specific transactions are taxed at 1%. In addition, foreign exchange transactions are subject to 0 (zero) BITT according to the Council of Ministers Decision since 2008.
Taxation period in BITT is each month of the calendar year. Taxpayers declare their taxable transactions and pay their taxes by the evening of the 15th day of the following month.
In 2015, 2.25% of the General Budget Tax Revenues comes from BITT and the total amount of tax revenues derived from BITT is 9.171.600.000 TL (Turkish Lira).
Source: The Republıc Of Turkey Mınıstry Of Fınance Revenue Administration
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