Following the savings measures, the Ministry of Treasury and Finance has finalized its tax-related regulations. In addition to the important topics regarding strengthening tax justice and making tax regulations for capital, the package also included the tax increase to be introduced to organizations operating with the build-operate-transfer model and the minimum income tax to be implemented.
DIRECT TAXES WILL ALSO INCREASE
The new reform package, which has been being worked on by the Ministry for a while, was finalized in line with the targets included in the Medium Term Program. The package is based on what the Minister of Treasury and Finance, Mehmet Şimşek, said at every opportunity: “Our goal is to leave no area untaxed to ensure justice and efficiency in taxes.” It was prepared in line with the message.
The package planned to be submitted to the Turkish Grand National Assembly includes regulatory proposals to strengthen tax justice, introduce capital-oriented tax practices and increase the share of direct taxes.
MINIMUM INCOME TAX MODEL IS COMING TO MULTINATIONAL COMPANIES
The ministry will also introduce the local minimum corporate tax and minimum income tax model to increase the share of direct taxes. Some of the titles included in the package are as follows:
By opening a new chapter in the Corporate Tax Law, minimum corporate tax (global minimum corporate tax) will be collected from multinational companies.
In the global minimum corporate tax, which has been enacted in more than 30 countries, especially EU countries, branches, subsidiaries and workplaces of multinational companies whose annual consolidated revenue exceeds the threshold of 750 million euros in low-tax countries are subject to a minimum 15 percent corporate tax.
If the corporate tax burden paid in the country where these companies operate is below 15 percent, countries that have legalized the practice will be able to collect the tax difference that the relevant country does not receive. Countries that do not implement minimum corporate tax transfer their taxation rights to another country. While there are 1024 groups in Turkey whose ultimate main businesses are abroad, they have 2,134 businesses in the country.
THEY MADE HIGH TURNOVER WITHOUT DECLARING THE BASIS
It was determined that approximately half of the corporate taxpayers continued their activities with high turnover despite declaring losses or not reporting any tax base. The Ministry, which also examined EU and OECD practices on this subject, prepared a hybrid model in which taxpayers’ declarations, revenue and ability to pay are compared with each other.
The corporate tax to be paid will be determined on the basis of the higher of the tax calculated by accepting a certain proportion of the declared earnings before deductions and exemptions and a certain proportion of the earnings in the income statement as the base.
The minimum corporate tax paid will be offset from the tax payable in the following 5 accounting periods, when businesses are required to pay higher taxes. Some exceptions (such as participation earnings, emission premium earnings) will be taken into account by deducting them from the earnings in the minimum tax calculation.
The rights of taxpayers who make investment expenditures within the scope of the investment incentive certificate will be protected. Taxpayers who start a new job will be exempt from minimum tax for 3 years.
MINIMUM INCOME TAX FOR COMMERCIAL, AGRICULTURAL AND SELF-PROFESSIONALS
Minimum income tax is also applied to commercial, agricultural and self-employment earnings that are taxed in the real way. It was observed that a significant portion of income taxpayers declared losses or there were significant discrepancies between their declarations and revenues. A new model will be established in this regard. Accordingly, the earnings to be declared by taxpayers cannot be less than a determined percentage of their returns in the income and earnings declaration table.
An additional anchor is planned for those who earn self-employment income. The earnings to be declared by these taxpayers cannot be below the annual gross minimum wage.
The minimum tax difference paid on revenue will be allowed to be offset in the following 5 accounting periods. New hires will be exempt from minimum tax for 3 years.
30 PERCENT CORPORATE TAX FOR BUILD OPERATE TRANSFER AND PUBLIC PRIVATE COOPERATION ACTIVITIES
Increased corporate tax will also be applied to the profits obtained from Turkey’s large investments. The corporate tax rate is 25 percent for the real sector, 30 percent for banks and financial institutions, 20 percent for exporting companies, 23 percent for public companies and 24 percent for manufacturers.
As is the case with banks and financial institutions, it is recommended that the corporate tax rate on the earnings of institutions operating within the scope of build-operate-transfer (BOT) model and public-private partnership (PPP) projects should be 30 percent instead of 25 percent. This regulation is aimed to contribute to strengthening tax justice and increasing the share of direct taxes.
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2024-06-21 10:21:40