“Equivalent rental value” is taken as bases in case of low or no value for rental income. According to this basis, equivalent rental income principle shall be applied on the conditions of;

• Leaving the immovable property to the usage of other persons for free,
• Lower value of rental income of rented immovable property than the equivalent rental value. The equivalent rental value in rented buildings and lands is the rental value determined by authorized specific authorities or courts, if it is available.

The equivalent rental value in property and rights for other than buildings or lands is 10% of their cost price. If this cost is not known, it is 10% of determined values of them calculated in accordance with valuation of property provisions of Tax Procedure Law.

Example: Taxpayer (A) gave up a flat valued 400.000 TL to one of his friends without charge in 2018.

Accordingly, although taxpayer does not obtain rental income, he should be supposed to obtain rental income in accordance with the amount reached after the calculation of equivalent rental value.

Equivalent rental value: 400.000 x 5% = 20.000 TL. This amount should be considered as income to be declared.

Equivalent rental value principle is not applied under the following conditions:

• Leaving empty immovable properties to other person’s residence in order to protect the immovable,
• Allocating the buildings to the residence of the property owner’s children, mother and father or siblings (But, if more than one house allocated to the residences of each of these persons, equivalent rental value is not calculated only for one of these houses. For example, if owner of property has allocated two houses to the residence of his child, it will not be calculated equivalent rental value for one house and for the second one it will be calculated.)
• Accommodating of relatives with the property owner in the same house or flat,
• Leasing done by General Budget and by Annex Budget Offices, by provincial administrations and municipalities and by other public institutions and organizations.

Source:gib.gov.tr
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.

DECISION ON MAKING CHANGE IN THE DECREE NUMBERED 32 REGARDING PROTECTING VALUE OF TURKISH CURRENCY

ARTICLE 1- Below article is added in the article numbered 4 of the decision of protection of the value of Turkish currency law; decree numbered 32 and published on 7/8 /1989.

“g) Inhabitants of Turkey are not allowed to agree upon in foreign currency or foreign currency indexed prices when they come to an agreement inter se on selling and purchasing property, property renting, including vehicle renting, leasing, except for the situations outside of the ministry’s decision.

ARTICLE 2- the Provisional article is adding the same decree.
“Provisional Article 8- Within thirty days beginning from this decree’s 4th article, ((g) decree) coming into force, amounts that the parties came to an agreement on foreign currency in the agreements mentioned in this decree, are determined by the new law as Turkish currency, (lira) except for the situations outside of the ministry’s decision. “

ARTICLE 3- This decree comes into force on its date of issue.

ARTICLE 4- This decree is executed by the ministry of finance and the department of treasury.

Source: The Protection of the value of Turkish Currency
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.

If those who are not responsible for paying tax in Turkey are attaining services from abroad and benefiting from it, have to pay value-added tax. (Tax Declaration Number 2)

2- Vat Return Number 2 contains Purchased Software, too
Let us explain with an exemplum; Let say Özkan AKIN A.Ş located in Turkey purchased a software program from a company located in abroad and downloaded the program.  The foreign company sent the bill via email. Bill cost is 1.000 Turkish Lira. (260 USD)
Özkan AKIN A.Ş is supposed to pay 180 Turkish Lira Value Added Tax with the proclamation of Tax Declaration Number 2.
Özkan AKIN A.Ş will demand a discount in the tax declaration number 1.
In a nutshell, the company has to pay it cash, and after that, they will get the discount they demand in the regular tax.

3- Attention is asked for the situation in which service is benefited in domestic.
In contrast to what mentioned above, If a company İn Turkey does not use the service purchased from abroad, it does not have to declare and pay value added tax with the proclamation of Tax Declaration Number 2.

Exemplum: Özkan AKIN A.Ş. purchased the service of finding a customer in abroad from a brokerage firm in Slovenia, after that service, it paid 50.000 EURO.  Thanks to this brokerage, there has been a 500.000 EURO import to Australia.

The company attained brokerage service does not have to pay value-added tax.

4- IN WHICH CIRCUMSTANCE THE COMPANY HAS TO PAY VALUE ADDED TAX?In the case of operations are being done in Turkey.
Commodities are in Turkey in the process of purchasing means services are being taken and benefited in Turkey.
If services are benefited in abroad, one does not have to pay value-added tax.

Source: Article Number 3065 Value Added Tax