July 2023
Financial Agenda
In order to compensate for the economic losses caused by the earthquakes we experienced in February, important tax regulations were made in July. In this month's issue, we included details of our Bulletins and Announcements in which we have announced these regulations. However, I would like to briefly summarize these significant regulations here.
With Law No. 7456, one-off legal regulation has been made to collect additional motor vehicle tax (MTV) equal to the MTV accrued in 2023. Taxpayers of additional MTV have been determined as those who are MTV taxpayers as of 15/07/2023 within the scope of MTV Law, and real and legal persons who own vehicles registered for the first time in relevant registries between 15/07/2023 and 31/12/2023.
Again, with Law No. 7456, to be applied in declarations to be submitted as of 01/10/2023, general corporate income tax (CIT) rate has been increased from 20% to 25%, and CIT rate for banks and certain financial institutions has been increased from 25% to 30%. On the other hand, 1-point deduction applied to earnings of exporting institutions exclusively from exports has been increased to 5 points.
With the mentioned Law, CIT exemptions applied to earnings of institutions from mutual funds has been abolished. Exception for earnings from venture capital investment funds and partnerships continues in the same way.
With the Law, CIT exemption for earnings from sales of immovable properties held for more than two years has been similarly abolished. However, regarding immovables acquired as of 15/07/2023, exemption rate has been reduced from 50% to 25%, and a transitional period has been adopted for these immovables. In addition, possibility of subjecting immovables to tax-free partial division has been abolished as of 01/01/2024.
As is known, sales of immovables held for more than two years are exempt from VAT, provided that relevant conditions in VAT Law are met. Exemption was abolished with the regulation made on with Law No. 7456. On the other hand, protection of acquired rights has been ensured by continuing VAT exemption in sales of immovables in assets of institutions and in transfers and deliveries before 15/07/2023, provided that other conditions in the article are met.
With the amendment in July in VAT rates, VAT rate on deliveries and services subject to 8% has been increased to 10%, and VAT rate for deliveries and services subject to 18% has been increased to 20%. VAT rate on deliveries and services subject to 1% rate has not been amended.
Special consumption tax (SCT) also got its share from the tax increases in July. With the Decree published on 16/07/2023, SCT amounts on fuel products have been increased.
In July, another increase was made in fees. Pursuant to the Decree entered into force on July 8, 2023, all fixed fees applied in 2023 (including the limits determining minimum and maximum amounts of fixed and relative fees) were increased by 50%. As in title deed fees, no changes were made in the relative calculated fees.
You can find the details of all significant financial regulations made in July in this issue.
To view the full report, click here.
Originally published 11 August 2023
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
