Tax Regulations Included in the Omnibus Law

Tax Regulations Included in the Omnibus Law

The omnibus law presented to the parliament yesterday includes several tax regulations.

  1. A one-time additional motor vehicle tax is introduced for the year 2023. According to the provision, we will pay double the amount of annual motor vehicle taxes (MTV) for the year 2023.
  2. The tax and VAT exemption for real estate sales is abolished.

The corporate tax and VAT exemptions for the sale of immovable properties registered in the company’s assets for more than 2 years are being abolished.

It is expected that these exemptions will continue for immovable properties registered in the company’s assets before the effective date of the law. However, the corporate tax exemption rate for these sales is reduced from 50% to 25%.

  1. Immovable properties are excluded from the scope of partial demerger.

Under the new regulation, immovable properties will not be included in partial demergers. Only subsidiary shares and production and service businesses can now be subject to partial demergers.

  1. The corporate tax exemption for gains derived from the investment funds of companies is abolished (except for gains derived from venture capital funds).
  2. The corporate tax rate is increased from 20% to 25%.

The corporate tax rate for profits obtained in 2023 and subsequent tax periods, as well as the profits obtained by taxpayers subject to special accounting periods starting in 2023 and subsequent tax periods, is increased from 20% to 25% for companies.

For banks, leasing, factoring, financing, and savings finance companies under Law No. 6361, electronic payment and money institutions, authorized currency institutions, capital market institutions, insurance and reinsurance companies, and pension companies, the corporate tax rate is increased from 25% to 30%.

  1. The 1% reduction in the corporate tax rate applied to the profits of exporters to promote exports is increased to 5%.
  2. With the addition of paragraph 5 to Article 12 of the Special Consumption Tax Law and the automatic increase based on the semi-annual PPI (Producer Price Index) increase announced by TURKSTAT in January and July, the fixed SCT (Special Consumption Tax) amounts applied to petroleum products, LPG, natural gas, mineral oils, solvents, and other products listed in Annex (ı) of the SCT Law will be increased. This practice is also applicable to the SCT amounts for tobacco products and alcoholic beverages listed in Annex (III).

The President is granted the authority to refrain from applying these increases, apply different rates, determine separate dates for implementation, and change the authorized amounts up to five times. The regulation states that the President’s authority to increase the SCT amounts for goods listed in the relevant SCT lists is not limited to the amounts specified in the law annex but can be determined based on the automatically adjusted amounts according to the semi-annual PPI increases.

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