Withholding Tax Regime Envisaged For Share Buybacks

The Law on the Restructuring of Certain Receivables and Amendments to Certain Laws No. 7256 ("Law No. 7256") published on the Official Gazette No. 31307 on November 17, 2020 introduced several amendments to the tax legislation including restructuring of public receivables and wealth amnesty. Apart from this, one of the major amendments introduced by the Law is the amendment made under Article 94 of Income Tax Law no. 193 which introduces a new withholding tax regime for the share buyback transactions to be conducted by full liable equity companies. Within this scope, in this Newsletter Article, the new withholding tax regime will be evaluated in terms of its reasoning and problematic issues that may come up during the implementation of this new rule.