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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.

Do You Know The Numbers Of Starting – Closing Companies Of 2016-2017 July On City Basis?

MuhasebeNews — Tue, 12 Sep 2017 12:45:08 +0000

The numbers and of types of Starting – Closing Companies of 2016-2017 July on city basis are shown on the table below:
According to the table;
1- City of İstanbul; The number of companies that were started in the year of 2016, the month of July was 1.177, this number has risen to 1.902 in 2017, July.
2- City of Ankara; The number of companies that were started in the year of 2016, the month of July was 332, this number has risen to 597 in 2017, July.
3- City of Izmir; The number of companies that were started in the year of 2016, the month of July was 176, this number has risen to 324 in 2017, July.

Source: Turkish Union of Chambers and Exchange Commodities

Free Circulation for Household Goods Which are Brought by Real Persons from Abroad in order to Use Them in Turkey!

MuhasebeNews — Thu, 29 Jun 2017 08:55:01 +0000

1- WHO CAN TAKE ADVANTAGE FROM FREE CIRCULATION FOR HOUSEHOLD GOODS WHICH ARE BROUGHT BY REAL PERSONS FROM ABROAD IN ORDER TO USE THEM IN TURKEY?
1.1- Real persons (residing out of Customs Territory of Turkey) are allowed to use household goods which are brought from abroad in order to use in houses within the Customs Territory of Turkey without paying Customs Duty for once only.
1.2- In order to apply this provision, it is highly important that persons should reside out of Customs Territory of Turkey and their nationalities are not taken into consideration.

2- WHAT ARE THE CONDITIONS TO TAKE ADVANTAGE OF EXEMPTION?
In order to take advantage of the exemption, one should fulfil the following conditions;
2.1- One should continuously reside out of Customs Territory of Turkey at least 24 months until the date of his/her arrival to Turkey. If one is present in homeland maximum 185 days within a year before the date of last arrival to Turkey, aforesaid continuity will not be affected. Furthermore, that term is not required for persons who reside out of Customs Territory of Turkey at least 5 years within 10 years.
2.2- Check-ins and check-outs (which show their stay in Turkey or/and out of Customs Territory of Turkey) of those persons being within the scope of that provision will be determined electronically.
2.3- In order to import household goods within the scope of that provision, family unit will be based on. In order to determine family unit, it is required to have a Certificate of Identity Register Copy for Turkish citizens and dual citizens, or a document indicating registers of persons (which can be taken from our representations in foreign countries or foreign representations in Turkey) for foreigners. If that document is not provided in accordance with the law of foreign country, the data expressed in the documents will be based on during the declaration.
2.4- The house should be bought or rented at least 1 year. If one does not fulfil that condition, temporary admission will be applied to those household goods by means of total exemption.
2.5- Exemption is limited to the household goods which are used in one house.
2.6- For household goods within the scope of this provision, persons should submit the declaration of release for free circulation before their arrival or while they are arriving or within 6 months after their arrival.

3- HOW SHOULD ONE RELEASE HOUSEHOLD GOODS BEING SUBJECTED TO TEMPORARY ADMISSION INTO FREE CIRCULATION?
On condition that the house is bought or rented at least 1 year including the period of temporary admission, persons should continuously reside out of Customs Territory of Turkey at least 24 months before they arrive to Turkey. If one is present in homeland maximum 185 days within a year before the date of last arrival to Turkey, aforesaid continuity will not be affected. If a real person resides out of Customs Territory of Turkey at least 5 years within last 10 years, his/her household good will be released into free circulation by being exempt from customs duty regardless of requirement for aforesaid period of time.

4- WHAT KINDS OF DOCUMENTS ARE REQUIRED FOR THE APPLICATION?
Stated persons, their partners or persons having power of attorney within the scope of article 225 of the Customs Law should apply to an authorized customs administration with the following documents.
4.1- It is required to have a Certificate of Identity Register Copy for Turkish citizens and dual citizens, or a document indicating registers of persons (which can be taken from our representations in foreign countries or foreign representations in Turkey) for foreigners. If that document is not provided in accordance with the law of foreign country, the data expressed in the documents will be enough during the declaration.

4.2- Acquired house:
4.2.1- If it is purchased, it is required to have title deed prepared on behalf of a person or his/her partner or a house which is bought from cooperatives (and whose title deed is not submitted because its construction servitude is done too late in the cooperatives).
4.2.2- If it is rented, it is required to have a one-year rental agreement (notarized) which is prepared on behalf of a person or his/her partner.

4.3- The list of household goods which will be attached to verbal declaration form.

5- HOW TO AVOID REPETITIVE USAGE OF FREE CIRCULATION RIGHT?
5.1- As for customs transactions related to used household goods, it can be electronically determined whether this right is used repeatedly by one person and the other family members or not.
5.2- If a person brings the goods in lots while arriving to Turkey, before his/her arrival, or within 6 months after his/her arrival, it will not be regarded as repetitive usage of this right.

Source: Official Gazette (06.06.2017 – 30088)

The Number of Company Establishment Decreased 10% in 2017!

MuhasebeNews — Tue, 21 Mar 2017 07:18:47 +0000

1- COMPARISON BETWEEN JANUARY 2017 AND FEBRUARY 2017
  1.1- COMPANY Establishment – Liquidation
      – The number of company establishment decreased 10,61%.
      – The number of company liquidation decreased 60,50%,

1.2- REAL PERSON BUSINESS ORGANIZATION Establishment – Liquidation
– The number of real person business organization establishment decreased 25,41%,
– The number of real person business organization liquidation decreased 35,86%

1.3- COOPERATIVE Establishment – Liquidation
– The number of cooperative establishment increased 1,54%,
– The number of cooperative liquidation decreased 75,12%

2- COMPARISON BETWEEN FEBRUARY 2017 AND FEBRUARY 2016
2.1- COMPANY Establishment – Liquidation
– The number of company establishment decreased 11,87%,
– The number of company liquidation decreased 2,43%,

2.2- REAL PERSON BUSINESS ORGANIZATION Establishment – Liquidation
– The number of real person business organization establishment decreased 1,88%,
– The number of real person business organization liquidation decreased 9,92%

2.3- COOPERATIVE Establishment – Liquidation
– The number of cooperative establishment increased 3,13% ,
– The number of cooperative liquidation decreased 38,37%

3- COMPARISON BETWEEN BIMONTHLY PERIOD (JANUARY-FEBRUARY) IN 2017 AND BIMONTHLY PERIOD (JANUARY-FEBRUARY) IN 2016
3.1- COMPANY Establishment – Liquidation
– The number of company establishment decreased 10,45%,
– The number of company liquidation decreased 0,19%,

3.2- REAL PERSON BUSINESS ORGANIZATION Establishment – Liquidation
– The number of real person business organization establishment increased 3,45%,
– The number of real person business organization liquidation decreased 1,04%,

3.3- COOPERATIVE Establishment – Liquidation
– The number of cooperative establishment increased 6,50%,
– The number of cooperative liquidation decreased 23,78%.

Source: Turkish Union of Chambers and Commodity Exchanges

Date: 21 March 2017