02.01.2023/1
The Limits and Amounts to Be Applied Under the Income Tax Law for the Year 2023 Have Been Determined
With the publication of the General Communique on Income Tax No. 323 in the Official Gazette dated 30.12.2022 and numbered 32059 (2nd Repeated), the fixed limits and amounts, which have been increased by the revaluation rate, in Articles 9/10, 21, 23/8, 23/10, 31, 40/1, 40/7, 47, 48, 68, repealed 80, 82, 86, 103, and repealed 121 of the Income Tax Law, as well as matters related to the application of the discount rate in the declaration of the income derived from certain securities exported before 1/1/2006 and obtained in the 2022 calendar year, are explained.
Information regarding these limits and amounts is provided below:
1) The tariff, which is based on income subject to income tax in the first paragraph of Article 103 of the Law No. 193, has been revised as follows for the taxation of 2023 calendar year income:
| Up to 70,000 TL | 15% |
| For 70,000 TL of 150,000 TL, 10,500 TL, excess | 20% |
| For 150,000 TL of 370,000 TL, 26,500 TL (for wage income, for 150,000 TL of 550,000 TL, 26,500 TL), excess | 27% |
| For 370,000 TL of 1,900,000 TL, 85,900 TL, (for wage income, for 550,000 TL of 1,900,000 TL, 134,500 TL), excess | 35% |
| For 1,900,000 TL of excess, 621,400 TL for 1,900,000 TL, (for wage income, for 1,900,000 TL of excess, 607,000 TL), excess | 40% |
2) The small tradesman exemption limit for those who sell products they produce in their homes through the internet and similar electronic platforms has been increased from 320,000.00 TL to 700,000.00 TL.
3) The residential rental income exemption has been increased from 9,500.00 TL to 21,000.00 TL.
4) The exemption amount for benefits provided by employers to employees in locations outside the workplace or its annexes, such as providing meals, has been increased from 51.00 TL to 110.00 TL.
5) The exemption amount for transportation expenses incurred by employers for ensuring the collective commute of employees has been increased from 25.50 TL to 56.00 TL.
6) The disability discount amounts stated in the second paragraph of Article 31 of the Law are as follows:
– For first-degree disabled individuals: 4,400 TL,
– For second-degree disabled individuals: 2,600 TL,
– For third-degree disabled individuals: 1,100 TL.
7) The monthly rental fee that can be deducted for leased passenger cars has been increased from 8,000.00 TL to 17,000.00 TL.
8) The total amount of special consumption tax and value-added tax related to the acquisition of passenger cars that can be deducted has been increased from 200,000.00 TL to 440,000.00 TL.
9) The depreciation amount that can be deducted for the acquisition of passenger cars, excluding special consumption tax and value-added tax, has been determined as 500,000.00 TL, and in cases where the taxes are added to the cost or the car is acquired second-hand, it has been determined as 950,000.00 TL.
10) The total rental amount condition for being subject to the simple procedure has been determined as 35,000.00 TL for metropolitan municipalities and 22,000.00 TL for other locations.
11) The limits related to the special conditions for being subject to the simple procedure specified in Article 48 are as follows:
– For paragraph (1): 440,000.00 TL and 700,000.00 TL,
– For paragraph (2): 220,000.00 TL,
– For paragraph (3): 440,000.00 TL.
12) The exemption amount for capital gains has been increased from 25,000.00 TL to 55,000.00 TL.
13) The exemption amount for occasional gains has been increased from 58,000.00 TL to 129,000.00 TL.
14) The threshold for filing a tax return for movable and immovable capital gains not subject to withholding and exemption in paragraph (d) of subparagraph (1) of the first paragraph of Article 86 has been increased from 3,800.00 TL to 8,400.00 TL.
15) The maximum annual discount amount for taxpayers complying with tax regulations has been increased from 2,000,000.00 TL to 4,400,000.00 TL.
16) The special thresholds for goods such as national lottery tickets, fuel, sugar, and other goods with lower profit margins than their counterparts have been determined as follows:
| Type of Commodity | Places Outside the Metropolitan Municipality | Places Within the Metropolitan Municipality | ||
|---|---|---|---|---|
| Annual Purchase Volume (TL) | Annual Sales Volume (TL) | Annual Purchase Volume (TL) | Annual Sales Volume (TL) | |
| Valuable Paper | 750,000 | 840,000 | 900,000 | 1,090,000 |
| Sugar-Tea | 550,000 | 750,000 | 700,000 | 890,000 |
| National Lottery, Instant Win, Super Toto, etc. | 550,000 | 750,000 | 700,000 | 890,000 |
| Alcohol (Except Beer and Wine), Spirits, Cigars, Tobacco | 550,000 | 750,000 | 700,000 | 890,000 |
| Fuel (Except LPG) | 840,000 | 890,000 | 1,090,000 | 1,270,000 |
Those engaged in the trade of the mentioned items must not exceed the thresholds stated above for purchases, sales, or revenue as of 31.12.2022 to continue benefiting from the simplified procedure in the 2023 calendar year.
17) The practice of issuing a single invoice at the end of the day for daily revenues without providing invoices, which was introduced by the Income Tax General Communique No. 215 published in the Official Gazette dated 6.12.1998 and numbered 23545, will continue until 31.12.2023.
18) The discount rate application for the declaration of certain capital gains obtained in the 2022 calendar year:
In the second paragraph of Article 76 of the Law, which was repealed by Article 44 of Law No. 5281, the discount rate is applied to the income from capital gains specified in paragraphs (5), (6), (7), (12), and (14) of the second paragraph of Article 75 of the Income Tax Law (except for income from foreign currency-denominated accounts, foreign currency, gold, or other indexed securities, and securities issued in foreign currency). The part determined by applying the discount rate is considered as a discount when declaring these capital gains.
Although the second paragraph of Article 76 of the Income Tax Law was repealed by Law No. 5281 for incomes obtained after 1/1/2006, according to the transitional provision of Article 67 of the same Law, the provisions that were in force on 31/12/2005 regarding the taxation of income from securities issued before 1/1/2006, such as bonds and Treasury bills, continue to apply, including the discount rate.
The discount rate is determined by dividing the revaluation rate set for that year under Law No. 213 by the compound average interest rate of government bonds and Treasury bills for the same period. The revaluation rate for 2022, as set by Law No. 213, is 122.93%. The compound average interest rate for government bonds and Treasury bills in 2022 is 18.14%. Accordingly, the discount rate to be applied to capital gains for the year 2022 is 677.67% (122.93% / 18.14%).
Considering this rate, the discount rate for the 2022 capital gains exceeds 1, meaning that the income from certain securities, such as bonds and Treasury bills issued before 1/1/2006, will not be declared due to the discount rate exceeding one.
There is no discount rate applied to capital gains from securities indexed to foreign currency, gold, or other values, or from foreign currency-denominated securities, nor to income and gains from commercial enterprises.
According to the fourth paragraph of the transitional Article 67 of the Income Tax Law, income from securities listed in paragraphs (7), (12), and (14) of the second paragraph of Article 75 of the Law is taxed through withholding from 1/1/2006 onwards, and thus, the declaration of these incomes and the application of the discount rate does not apply.
For further details, you can access the relevant Communique here.
Best regards,
BİLGENER
