13.03.2023/39
Additional Tax Imposed on Some Corporate Taxpayers with the Law No. 7440
The Law No. 7440 on Restructuring Certain Receivables and Amending Certain Laws was published in the Official Gazette No. 32130 on 12.03.2023.
This Law includes provisions for debt restructuring and tax base increase, along with many other tax regulations. One of the most significant tax provisions is the additional tax regulation found in Article 10/27 of the Law.
Scope of the Additional Tax
According to the mentioned regulation:
- The amounts of exemptions and deductions made from the corporate profit, under the Corporate Tax Law and other related laws,
- The tax base subject to reduced corporate tax under Article 32/A of the Corporate Tax Law
will be subject to a tax calculation of 10% without being linked to the period profit.
Furthermore, for exemption income from participation shares under Article 5/1-a of the Corporate Tax Law, and income derived from abroad that is subject to at least 15% tax, a 5% tax will be calculated.
Payment Period of the Additional Tax
The first installment of the additional tax will be paid within the corporate tax payment period, in April, and the second installment will be paid in August, which is the fourth month following this period.
For taxpayers with a special accounting period, this tax will be applied by showing it in the tax returns for the accounting period ending in 2023. For example, for a taxpayer using the special accounting period from 01.04.2022 to 31.03.2023, the tax will be calculated in the tax return for the period ending on 31.03.2023.
Status of Taxpayers in the Earthquake Region
Due to the state of force majeure declared because of the earthquake, corporate tax payers in the provinces of Adana, Adıyaman, Diyarbakır, Elazığ, Gaziantep, Hatay, Kahramanmaraş, Kilis, Malatya, Osmaniye, Şanlıurfa, and the Gürün district of Sivas are exempt from the additional tax. However, it is being considered that a regulation should be made to include taxpayers operating in the region but registered outside the region within the exemption scope.
Exemptions and Deductions Not Subject to Additional Tax
Some exemptions and deductions are excluded from the scope of the additional tax. The exemptions and deductions excluded from the scope are as follows:
- Income from Portfolio Management by Investment Funds and Partnerships (Corporate Tax Law Art. 5/1-d)
- Cooperative Refund Exemption (Corporate Tax Law Art. 5/1-i)
- Exemption on Income from Sale-Leaseback Transactions (Corporate Tax Law Art. 5/1-j)
- Exemption on Income from Sale of Assets and Rights for Issuing Lease Certificates (Corporate Tax Law Art. 5/1-k)
- Exemption on Income from Foreign Currency-Protected Deposit Accounts (Corporate Tax Law Transitory Art. 14)
- Sponsorship Expenses (Corporate Tax Law Art. 10/1-b)
- Donations and Charitable Contributions (Corporate Tax Law Art. 10/1-c)
- Donations and Charitable Contributions (Corporate Tax Law Art. 10/1-ç)
- Donations for Cultural and Tourism Purposes (Corporate Tax Law Art. 10/1-d)
- Donations to National Campaigns Initiated by the President (Corporate Tax Law Art. 10/1-e)
- Monetary Donations to the Turkish Red Crescent and the Green Crescent (Corporate Tax Law Art. 10/1-f)
- Venture Capital Fund (Corporate Tax Law Art. 10/1-g)
- 50% of Income from Services Provided to Foreign Residents or Institutions (Corporate Tax Law Art. 10/1-ğ)
- Protected Workplace Discount (Corporate Tax Law Art. 10/1-h)
- Investment Incentive Exemption (Income Tax Law Transitory Art. 61)
- Donations and Charitable Contributions Deductible from Corporate Income under Relevant Laws
- Small and Micro Enterprises’ TechnoPark Income Exemption and R&D and Design Deductions
Whether the Additional Tax Will Be Considered as an Expense or Deduction
According to the regulation, the calculated additional tax cannot be considered as an expense or deduction and will not be offset against any other taxes.
You can access the related Law here.
Best regards,
BİLGENER
