Evren Özmen
Serbest Muhasebeci Mali Müşavir
Bilirkişi
evrenozmen@ozmconsultancy.com
www.kooperatiflerkanunu.com

Amendments in Tax Laws Made With The Law No 7338

Law No. 7338 Introduces Several Amendments To Tax Legislation

Recent Changes in Turkish Tax System

Actually The Turkish Tax system is not an easy system to get through. It is filled with complicated laws and regulations that are constantly changing. But this new law changes a lot of things in the system, so it’s important to learn about this law before it takes effect on January 1, 2022.

January 1, 2022 will mark the implementation of Law No 7388 which implements new tax legislations in Turkey. 

In general, the most prominent articles of the law

1-Simplifying tax procedures and red tape deduction for social media content producers and mobile application developers.

2-The tax incentives for amounts received as capital from abroad has been increased.

3-Effective for returns filed in 2022, the 4th-phase corporate income tax will be abolished.

4-In the application for renewing funds, hesitancy issues were resolved.

5-Those using simple accounting methods, are exempt from income taxes.

6-The effective date for the accommodation tax has been postponed to January 1, 2023.

7-Optional pro-rata depreciation and a longer depreciation period legislation.

1 — The legislation of simplifying tax procedures and reducing red tape for social media content producers and app developers.

Tax is one of the most complicated topics in all of business. Even for those with an accounting degree, it can still be difficult to understand the tax code. 

When we consider people who earn income through social media accounts or mobile applications, it doesn’t seem realistic for them to comply with the tax system and dealing with red tape.

Therefore Turkish Tax Regulators are enacting an extremely easy law for YouTuber’s, influencers and mobile app developers.

What do the new Tax law say ?

• YouTubers, influencers, and mobile application developers with an annual income of less than 650,000 TL do not need to establish a company.
• Banks will withhold 15% tax on the income of these persons.
• Their income will not be subjected to VAT (This is also great news for YouTubers, influencers, and mobile application developers because VAT rate is % 18 in Turkey )

2 — The tax incentives for amounts received as capital from abroad has been increased.

As all we know the benefits of getting a capital injection are many. Not only does it allow a business to jump-start its operation, but it also provides the necessary funds for scaling the company.

With the new regulation introduced, additional tax support will be available to companies that increase their capital from abroad. The government has introduced a new regulation, which will make it easier for companies to raise capital. Companies will be able to obtain tax advantages if they raise their capital from abroad.

In the application of interest reduction in cash capital increase, cash brought from abroad additional advantage is provided for the portion covered. According to the legislation, 50% of The discount rate will be applied as 75% for capital from abroad.

The legislation come into force on October 26, 2021.

3 — Effective for returns filed in 2022, the 4th-phase corporate income tax will be abolished.

Currently, the following four tax quarters are accepted by the Turkish Tax Authorities.

1. First quarter: January 1 to March 31

2. Second Quarter: January 1 to June 30

3. Third Quarter: January 1 to September 30

4. Fourth Quarter: January 1 to December 31

As you can see in the current regulation, companies make advance corporate tax payments every 3 months. The period covered by the latest temporary tax return is the same as the period covered by the annual corporate tax return. With the regulation, the last period temporary tax return is removed.

4 — In the application for renewing funds, hesitancy issues were resolved.

According to Turkish tax laws, if companies sell an asset in order to renew their assets, they are not obliged to pay the tax on the profit obtained from the first sale of fixtures for a period of 3 years.

But it was not clear whether the 3-year period would start in the year the fix asset was sold or the following year.

According to the new regulation; the three-year period will start from the beginning of the year following the date of the sale.

5 — Those using simple accounting methods, are exempt from income taxes.

With this regulation, occupational groups such as carpenters, neighborhood grocers, small tradesmen, tailors, barbers and plumbers are exempted from income tax under certain conditions.

6 — The effective date for the accommodation tax has been postponed to January 1, 2023.

The starting date of the accommodation tax, which is planned to be collected over the accommodation price in tourism facilities, has been postponed to the beginning of 2023.

7 — Optional pro-rata depreciation and a longer depreciation period legislation.

Due to new legislation taxpayers have the option of allocating depreciation according to how many days are left in their asset for it to be newly recorded.

In Conclusion; With recent developments, there have been a lot of changes to the tax laws beside below issues, so make sure you review all of them with your tax advisors before 2022.

01.11.2021

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