02.10.2024/54
In order to benefit from the 80% deduction for services rendered from Turkey to persons and entities residing abroad, the entire amount of the income must be transferred to Turkey
According to subparagraph 10/1-ğ of the Corporate Tax Law, architecture, engineering, design, software, medical reporting, accounting record keeping, call center, product testing, certification, data storage, data processing, data storage, data processing services provided in Turkey to non-residents and persons having their registered office, legal and business center abroad and exclusively benefited from abroad, data analysis and service businesses operating in the fields of vocational training services determined by the Ministry of Finance by taking the opinion of the relevant ministries, and service businesses operating in the field of education and health subject to the permission and supervision of the relevant ministry and providing services to non-residents in Turkey, 80% of the income generated exclusively from these activities can be deducted from the declared corporate income.
With the 59th article of the Law No. 7491, an amendment was made to the aforementioned subparagraph and it was ruled that the discount rate will be applied as 80% to be applied to the earnings obtained as of 1.1.2023, provided that all of the earnings obtained from the aforementioned activities are transferred to Turkey until the date of filing the corporate tax return for the accounting period in which the discount is utilized.
In the Corporate Tax General Communiqué Serial No. 23 published in the Official Gazette dated 28.09.2024 and numbered 32676, explanations regarding the transfer condition have been made.
– In order to benefit from the deduction, all of the aforementioned earnings within the scope of the subparagraph and obtained as of 1.1.2023 must be transferred to Turkey until the date of filing the declaration.
-In the event that some, but not all, of the aforementioned earnings are transferred to Turkey, the deduction will not be utilized, including the transferred portion.
– In case the earnings that are not transferred to Turkey within this period are transferred in the following periods, the deduction will not be applied.
– In terms of temporary tax periods, if the earnings are transferred to Turkey until the date of filing the declaration for the related temporary tax period, it will be possible to benefit from the deduction starting from this temporary tax period.
– In case the payments for services are made in Turkey until the date of filing the annual corporate tax return, the earnings from such activities will not be required to be transferred to Turkey.
“Example: (Ş) A.Ş., which operates in the field of architecture and uses the calendar year as the accounting period, transferred TL 400.000 on 10.4.2024 and TL 100.000 on 5.7.2024 to Turkey out of the TL 500.000 income it earned for the architectural drawing service it provided to a company resident abroad in 2023.
In this case, it is not possible to benefit from the aforementioned deduction, since all of the income obtained from the architectural activity is not transferred to Turkey until the date when the annual corporate tax return should be submitted.”
You can access the relevant Communiqué here.
Sincerely,
BİLGENER
