Permanent Representative – Muhasebe News

Is There a Tax Cut in Payments Made While Giving an Advertisement in Overseas Webpages?

MuhasebeNews — Sun, 02 Dec 2018 09:00:07 +0000

Payments, which are made in order to buy advertising services with the intention of advertising of companies via internet, marketing etc,. are considered commercial activities. If the company has no office or permanent representative in Turkey, it is not possible to tax it in Turkey. As a result of that, there will be no Corporation tax cut.

Source: Corporate Tax Law

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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

What are the Tax Liabilities in Turkey?

MuhasebeNews — Sat, 01 Dec 2018 09:30:52 +0000

In general, residency criterion is applied in determining tax liability for individuals. This criterion requires that an individual whose domicile is in Turkey is liable to pay tax for his worldwide income (unlimited liability). Any person who resides in Turkey more than six months in one calendar year is assumed as a resident of Turkey. However; foreigners who stay in Turkey for six months or more by the reason of a specific job or business or particular purposes which are specified in the PIT Law are not treated as resident. Therefore, unlimited tax liability is not applicable for them.

In addition to residency criterion, within a limited scope, nationality criterion also applies regardless of their residency status, Turkish citizens who live abroad and work for government or a governmental institution or a company whose headquarter is in Turkey, are considered as unlimited liable taxpayers. Accordingly, they are subject to PIT on their worldwide income. Non-residents are only liable to pay tax on their income derived from the incomes in Turkey (limited liability). For tax purposes, it is especially important to determine in what circumstances income is deemed to be derived in Turkey. The provisions of Article 7 of the PIT Law regulate this issue.

In the following circumstances, the income is assumed to be derived in Turkey.

Business Profit: A person must have a permanent establishment or permanent representative in Turkey and income must result from business carried out in this permanent establishment or through such representatives.

Agricultural Income: Agricultural activities yielding income must take place in Turkey.

Wages and Salaries:
– Services must be rendered or accounted for in Turkey,
– Fees, allocations, dividends and as such paid to the chairmen, directors, auditors and liquidators of the establishment situated in Turkey must be accounted for in Turkey.

Income from Independent Personal Services: Independent personal services must be performed or accounted for in Turkey.

Income from Immovable Property:
– Immovable must be in Turkey,
– Rights considered as immovable must be used or accounted for in Turkey.

Income from Capital Investment (interest, dividends, etc.): Investment of the capital must be made in Turkey.

Other Income and Earnings: The activities or transactions generating for other income, specified in the PIT Law, must be performed or accounted for in Turkey.

The term “accounted for” used above to clarify tax liability of the non-residents means that a payment is to be made in Turkey, or if the payment is made abroad, it is to be recorded in the books in Turkey.

Source: Revenue Administration

If You Sell Your Real Estates Within 1 Year, You Will Pay VAT!

MuhasebeNews — Tue, 16 May 2017 15:24:51 +0000

Built offices and real estates will be exempted from VAT,
1- When they are sold to a company which do not gain income in Turkey for the first time,
2- On condition that its sale value should be paid as foreign currency brought from abroad!!!
3- By means of foreign real persons who do not reside in Turkey, an office whose registered office and headquarter are not in Turkey or a permanent representative,

The ones, who bought an office or a real estate by taking advantage of VAT exemption in Turkey previously, will not be able to sell their real estates 1 year.

If they sell their office or real estate within 1 year, the tax (VAT), which was not paid when it was bought, will be received.

The properties, which are transferred to the Treasury ownership because of a suit brought by the Treasury, among the ones zoned for construction and then sold by the municipalities, will be again transferred to persons as free of charge.

Source: General Meeting of TGNA (23.02.2017 Thursday)

Are the Profits made from congresses held extrinsically in Turkey by limited taxpayer companies subject to tax?

MuhasebeNews — Fri, 31 Mar 2017 07:22:59 +0000

If limited taxpayer companies (which have no office or permanent representative in Turkey and cannot make profit through an office or a permanent representative) make profit from international congresses held in Turkey, their profit will not be regarded as commercial earning; it will be regarded as an incidental income and then be taxed.

Accordingly, if limited taxpayer companies make profit (it should be subject to tax) from incidental income, those companies should make a notice with a special declaration within 15 days after the date of acquisition.

Source: Corporate Tax Law

What is Permanent Representative?

MuhasebeNews — Wed, 22 Mar 2017 12:40:53 +0000

1- HOW A WORK PLACE DETERMINED ACCORDING TO REVENUE LAW?
A work place is determined according to Tax Procedure Law.

2- WHAT IS PERMANENT REPRESENTATIVE?
Permanent representative, is authorized to fulfill a number of business transactions
2.1- by depending on represented,
2.2- On behalf of his/her name,
2.2.1- in a specific or undefined period of time with a labor contract or attorney agreement.

3- WHO ARE REGARDED AS PERMANENT REPRESENTATIVE OF A REPRESENTED?
People listed below are regarded as permanent representative of a represented without stipulating;
3.1- agencies (according to Turkish Code of Commerce),
3.1.1- Commercial representatives,
3.1.2- Merchants’ attorney,
3.1.3- Official merchants,

3.2- People whose expenses are paid fully or partially by the represented (excluding advertisement costs belonging to represented),
3.3- People who keep products in stores and warehouses on behalf of represented in order to sell them by means of consignation.

***Even if a person represents more than one person, he will still be regarded as permanent representative.

Source: Revenue Law