Communiqué On The Implementation Of Financing Expense Deductions Limitations Published

New developments

The Communiqué Amending the Corporate Tax General Communiqué (Serial No. 1) ("Communiqué"), explaining the implementation of the financing expense deductions limitation ("Limitation"), was published in the Official Gazette No. 31491 on 25 May 2021.

What does the Communiqué mean?

The Communiqué added explanations to the principles and procedures on the implementation of the Limitation to the Corporate Tax General Communiqué (Serial No. 1), as follows:

• Corporate taxpayers whose utilized foreign liabilities exceed their equity should consider 10% of the total of expense and cost items, except those added to the expense of an investment, related to the foreign liabilities made under the title of interest, commission, dividend and exchange rate difference as non-tax-deductible expenses within the calculation of their business income. The Limitation only applies to amounts that exceed the equity.