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Ana Sayfa > Bulletins> English Bulletins> English Bulletins 2016

 
19.08.2016 – 2016/14

The tax amnesty law which entered into force with the promulgation in the Official Gazette, includes the some important arrangements on the following:

– restructuring of the outstanding tax liabilities,

– restructuring of the tax liabilities related to tax assessments or tax liabilities at court stage,

– voluntary increase in tax base,

– accounting corrections, and

– capital repatriation (asset amnesty)

The tax amnesty law, which entered into force with the promulgation in the Official Gazette on 19 August 2016, proposes the arrangements on the following:

– restructuring of the outstanding tax liabilities,

– restructuring of the tax liabilities related to tax assessments or tax liabilities at court stage,

– voluntary increase in tax base,

– accounting corrections, and

– capital repatriation (asset amnesty)

Amendments brought by the Tax Amnesty Law are summarised below:

1. Restructuring of the outstanding tax liabilities

The Law restructures the outstanding tax liabilitieswhose due dates are as of 30 June 2016.

Within the scope of this restructuring, the amount due is re-calculated and an instalment plan for up to 36 months (18 instalments) is applied with additional pro rata interest payment.

Accordingly, as of the promulgation date of the Law (including the promulgation date-19.08.2016), if the amounts in the first column of the table below is paid, the amounts in the second column will be removed.

Amounts due

Amounts subject to amnesty

– all of the principal tax/customs duty,

– 50% of penalties not related to the tax principal,

– 50% of tax penalties imposed related to participation acts,

– amounts determined on the basis of Domestic Producer Price Index instead of late payment interest/charge/penalty

– all of the penalties/administrative fines imposed related to tax principal,

– the remaining 50% of penalties not related to tax principal,

– the remaining 50% of tax penalties imposed related to participation acts, and

– all of the interest payments such as late payment interest, late payment charge, and late payment penalty.

In order to benefit from structuring the outstanding tax liabilities, a written application should be submitted until the end of October 2016.

2. Restructuring of the tax liabilities related to tax assessments or tax liabilities at court stage

Under the tax amnesty law, if a certain amount of the disputed tax and related penalties, and an amount that is calculated by using Domestic Producer Price Index rate (instead of late payment interest) are paid, a certain amount of the tax and penalties as well as the interests and penalties are removed.

The tax liability to be paid or removed is summarized below by considering the stage of the assessment/dispute as of the promulgation date of the Law:

a) If the lawsuit has been filed in the first degree court or the litigation application period has not expired
Amounts due

Amounts subject to amnesty

– 50% of the principal tax/customs duty,

– 25% of penalties not related to the tax principal,

– amount calculated on the basis of Domestic Producer Price Index instead of late payment interest/charge/penalty

– 50% of the remaining principal tax/customs duty,

– all of the tax penalties imposed based on tax/customs duty principal/administrative fines and the late payment charges relating to these penalties,

– 75% of penalties not related to the tax principal amounts, and

– all of the interest, late payment interest, and late payment charge.
b) If the litigation continues as of the promulgation date of the Law

As of the promulgation date of the Law,

– for the cases which the objection or appeal period has not expired or

– for the cases which an objective or appeal has been made but period for the revision of the decision request has not expired, or

– for the cases which a revision of the decision request was made,

the amount in the final assessment/accrual as of the promulgation date of the Lawis taken as a basis in the determination of the due receivable. The amounts to be paid or subject to amnesty according to the court stages are shown in the tables below:

If the final decision is a cancellation:

Amounts due

Amounts subject to amnesty

– 20% of the principal tax/customs duty,

– 10% of fines not related to the principal,

– amount calculated on basis of the Wholesale Price Index/Producer Price Index instead of late payment interest/charge/penalty

– 80% of the remaining tax/customs duty,

– all of the tax penalties imposed based on tax/customs duty principal/administrative fines and the late payment charges relating to these penalties,

– 90% of fines not related to the principal amount, and

– all of the interest, late payment interest, and late payment charge.

If the final decision is an approval or approval with amendments:

Amounts due

Amounts subject to amnesty

– all of the confirmed tax/customs duty principal,

– 50% of penalties not related to the approved tax principal, 10% of penalties not related to the cancelled tax principal,

– amount calculated on the basis of Domestic Producer Price Index instead of late payment interest/charge/penalty

– all of the tax penalties imposed based on tax/customs duty, principal/administrative fines, and the late payment charges relating to these penalties,

– 50% of remaining penalties not related to the approved tax principal, 90% of remaining penalties not related to the cancelled tax principal, and

– all of the interest, late payment interest, and late payment charge.

If the final decision is reversal:

Amounts due

Amounts subject to amnesty

– 50% of the principal tax/customs duty,

– 25% of penalties not related to the principal amount,

– amount calculated on the basis of Domestic Producer Price Index instead of late payment interest/charge/penalty

– 50% of remaining tax/customs duty principal,

– all of the tax penalties imposed based on tax/customs duty, principal/administrative fines, and the late payment charges relating to these penalties,

– 75% of penalties that do not relate to principal amounts, and

– all of the interest, late payment interest, and late payment charge.

If the final decision is partial approval and partial reversal, for the part approved:

Amounts due

Amounts subject to amnesty

– all of the confirmed tax/customs duty principal and 20% of the cancelled tax/customs duty,

– 50% of penalties not related to the principal amount,

– amount calculated on the basis of Domestic Producer Price Index instead of late payment interest/charge/penalty

– 80% of the remaining cancelled tax/customs duty principal,,

– all of the tax penalties imposed based on tax/customs duty, principal/administrative fines, and the late payment charges relating to these penalties

– 50% of penalties that do not relate to principal amounts, and

– All of the interest, late payment interest, and late payment charge.

If the final decision is partial approval and partial reversal, for the part reversed:

Amounts due

Amounts subject to amnesty

– 50% of principal tax/customs duty,

– 25% of penalties not related to the principal amount,

– amount calculated on the basis of Domestic Producer Price Index instead of late payment interest/charge/penalty

– 50% of the remaining tax/customs duty principal,

– all of the tax penalties imposed based on tax/customs duty, principal/administrative fines, and the late payment charges relating to these penalties,

– 75% of penalties that do not relate to principal amounts, and

– all of the interest, late payment interest, and late payment charge.

As per the Law:

– In order to benefit from the regulation summarised above, no lawsuit could have been filed against the receivables in the scope of the article, the lawsuits filed must have been withdrawn, and no legal remedies could have been resorted to.

– In case those who apply to benefit from the above arrangement provisions related to annual income or corporate income taxes, withholding tax/, value added tax and special consumption tax, do not pay the taxes accrued over the returns submitted in relation to these tax types for more than two instalments in one calendar year for each tax type during the tax payment period without existence of any force majeure, then they will lose the right to pay remaining instalments related to restructured debts.

3. Tax debts at the Inspection and Assessment Stage

According to the law, tax inspections, assessments, and extolments that have already started will continue.

For the tax amounts In the assessment stage after the conclusion of these assessments, in case the amounts in the first column of the table below is paid, the amounts in the second column will be removed.

The tax amounts calculated after the tax assessment can be paid in six instalments.

Amounts due

Amounts subject to amnesty

– 50% of the tax assessed,

– amount calculated on basis of update rate (Domestic Producer Price Index) instead of late payment interest from the promulgation date of the Law,

– all of the late payment interest to be calculated from the end date of the lawsuit opening period to the promulgation date of the Law,

– 25% of penalties not related to the tax principal

– 50% of the remaining tax assessed,

– all of the penalties related to the tax principal,

– 75% of penalties not related to tax principal,

– the late payment interest

– 25% of the penalties for participation acts

– 75% of the remaining penalties for participation acts.

4. Tax Base Increase

The law envisages that in case tax bases or tax amounts for the last five years are increased in certain rates, no tax inspections/or and assessments will be made regarding those years.

Tax base and tax increase will be made in the following four tax groups:

-Income Tax,

-Corporate Income Tax,

-Withholding tax (related to certain limited payments),

-Value Added Tax,

The tax base or tax increase rates are explained below:

a) Tax Base Increase in Income Tax
Year

Tax Base Increase Rate (%)

Minimum Tax Base Increase Amount (TL)

Tax Rate to be Paid over the Increased Tax Base (%)

2011

35

14,000

20

2012

30

14,820

20

2013

25

15,740

20

2014

20

16,740

20

2015

15

18,970

20

According to the Law, the tax rate of 15% instead of 20% will be calculated for those who submitted their annual income tax returns related to the year for which increase was introduced in a timely manner, who paid their taxes accrued over these returns on time, and who do not have any finalised or disputed income tax debts.

b) Tax base increase in Corporate Income Tax
Year

Tax Base Increase Rate (%)

Minimum Tax Base Increase Amount (TL)

Tax Rate to be Paid over the Increased Tax Base (%)

2011

35

28,000

20

2012

30

29,650

20

2013

25

31,490

20

2014

20

33,470

20

2015

15

37,940

20

Corporate income tax will be calculated with the tax rate of 15% rather than 20% for those who have paid their corporate tax fully and on time, just like the income tax.

Some important points regarding CIT base increase are summarised below:

– The 50% of the carry forward losses related to the tax base increase years will not be offset against the 2016 and following years.

– Regarding the taxation periods when there was an increase in tax base, the assessments made prior to the promulgation date of the Law will be considered together with the relevant period return. Assessments that were not finalised as of the promulgation date of the Law will be disregarded.

– Minimum tax bases identified for the related years for the companies operating in the interim period due to reasons such as starting a job and leaving a job will be calculated considering the number of months in which the operation was continued (month fractions regarded as full months).

– The amounts that can be deducted from the tax base in the following years due to the exemptions and deductions as well as the previous years’ carry forward losses cannot be deducted from the increased tax bases.

– In the event that corporations have revenues benefiting from investment allowance and subject to 19.8% withholding tax; the taxes paid as withholding over this amount should be taken into consideration in withholding tax base increase in related periods.

– If the revenues declared in the foregoing paragraph were not declared through a withholding tax return, in order not to face a tax assessment, the withholding tax base for these revenues and earnings should not be less than 50% of the minimum CIT tax base and should be declared until the end of the second month following the promulgation date of the Law. Also, the corporate income tax base increase for these years should be calculated.

c) Increase in Withholding Tax

According to the law, if an additional tax is paid by using the below rates over the annual gross amounts related to specific payments, no income tax inspection will be made.

Payments within the scope are as follows:

– The following payments stated in the first paragraph of Article 94 of Income Tax Law