limited taxpayer – Muhasebe News

How should limited taxpayers with Eurobond interest income be taxed in Turkey?

MuhasebeNews — Fri, 20 Sep 2019 11:00:02 +0000

How should limited taxpayers with Eurobond interest income be taxed in Turkey?

The interest income derived from these securities is not declared regardless of its amount and will not be included in the declaration in case of declaration of other incomes since the interest income of limited taxpayer real persons derived from the Eurobonds is deemed to have been taxed with detention in Turkey.

Source: GİB
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 the Procedure of Taxation of Return on Sales of Immovable Properties in Turkey?

MuhasebeNews — Sat, 01 Dec 2018 18:00:01 +0000

1-WHAT IS THE PROCEDURE OF TAXATION OF RETURN ON SALES OF IMMOVABLE PROPERTIES, IF A COMPANY HAS AN OFFICE IN TURKEY?
If an overseas company has an office or a permanent representative in Turkey in compliance with Tax Procedure Law, the profits made from the return on sales of immovable properties should be regarded as commercial income.

2- WHAT IS THE PROCEDURE OF TAXATION OF RETURN ON SALES OF IMMOVABLE PROPERTIES, IF A COMPANY HASN’T GOT ANY OFFICES IN TURKEY?
If an overseas company (limited taxpayer) hasn’t got any offices or permanent representatives in Turkey in accordance with Tax Procedure Law, the profits made from the sales of immovable properties within 5 years from the date of acquisition should be taxed within the scope of other income and earnings.

3- IF AN OVERSEAS COMPANY MAKES PROFIT THAT IS SUBJECT TO TAX FROM IMMOVABLE PROPERTIES, WHERE AND HOW SHOULD IT MAKE THE EARNING NOTICE?
If an overseas company (limited taxpayer) makes profit that is subject to tax from immovable properties, the person, who represents the company in Turkey, should make the notice in a tax office stated in article 101 of the Tax Procedure Law within 15 days from the date of acquisition.

*** The exception concerning to the earnings within the scope of article 80 of Income Tax Law shouldn’t be applied to above-mentioned incomes of companies that are limited taxpayers.

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 Regional Administration Centers Exempt from Corporate Tax in Turkey?

MuhasebeNews — Thu, 16 Aug 2018 12:00:29 +0000

Regional Administration Centers will be exempt from tax if they fulfill the some conditions stated below;
1- If they are established with the permission of the Ministry of Economy.
2- If their cost are covered by a company whose legal and business center are abroad.
3- The cost should not be submitted to a company’s account which is a limited or fully taxpayer.
4- and the profit should not be apart.

*** Even if a company which is limited or fully taxpayer is under a regional administration center’s directorship, the exemption will be applied.

Source: Corporate Tax Law

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)

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