19.04.2022/26
On Amendments to Law No. 7394
Law No. 7394 on the Amendment of Certain Laws and Decree Laws with the Law on the Evaluation of Immovable Properties Belonging to the Treasury and Amendment to the Value Added Tax Law entered into force after being published in the Official Gazette dated 15.04.2022 and numbered 31810.
The regulations related to the Tax Procedure Law No. 213 included in the Law No. 7394 are as follows
1-Article 4 of the Tax Procedure Law No. 213, with the amendments made in the “Authorization in Tax Application” section, “to use electronic signature, seal or approval in the transactions made by the tax office within the scope of this Law and other laws, to sign the documents issued by the tax offices and which must be signed by the tax office electronically by the Revenue Administration, to permit the electronic signature, seal or approval, and to regulate the procedures and principles of the use of electronic signature, seal or approval” and ”In the event that the documents issued by the tax offices and required to be signed are signed, sealed or approved electronically by the Revenue Administration, these documents will be deemed to be signed, sealed or approved by the tax office. By adding the article ”, the authorization to be signed by the Revenue Administration in electronic signature, seal and approval transactions made by the tax office has been given.
2- The limits of the tax penalties specified in Article 359 of the Tax Procedure Law No. 213 have been increased. The upper limit of imprisonment from 3 years to 5 years for those who commit the offenses in paragraph (a) of the relevant article, and the upper limit of imprisonment from 5 years to 8 years for those who commit the offenses in paragraphs (b), (c) and (ç). In addition, it has been made possible to apply effective remorse provisions during the investigation and prosecution phase for the offenses under Article 359.
According to this;
- In the event that the tax, default interest and late payment interest, and half of the penalties imposed and the corresponding late payment interest are paid in the investigation phase, the penalty to be imposed will be reduced by half, and in the prosecution phase, the penalty to be imposed will be reduced by one third if it is paid until the judgment is rendered,
- The penalty to be imposed will be reduced by half in cases where there is no tax levied and the penalty imposed depending on the tax base,
- In order to benefit from the penalty reduction specified in the above paragraphs, it is a condition that no lawsuit is filed in the tax court, or if filed, it is waived, legal remedies are not applied or if applied, it is waived,
is provided for.
3- With the paragraph added to Article 367 of the Law, in the event that it is revealed that the act subject to the opinion in the investigations or prosecutions carried out in relation to the crimes written in Article 359 is carried out by or with another person, the condition of preparing a report and issuing an opinion will not be required for the filing of a public case for this person.
4- With the Provisional Article 34 added to the Law, it is provided the opportunity to benefit from the effective remorse provisions for tax evasion offenses at the investigation and prosecution stage in terms of the offenses included in Article 359.
According to this;
- Those who have been sentenced and whose file is in the execution phase will be able to benefit from the effective remorse regulation made for the investigation phase in Article 359 with the Law that enacted this article, if they pay the entire tax, default interest and delay interest and half of the penalties imposed and the corresponding delay interest to the Treasury within one year from the date of entry into force of the Law that enacted this article, depending on the determination that the tax has been lost due to the acts written in Article 359. In order to benefit from the penalty reduction specified in this paragraph, no lawsuit should be filed with the tax court, or if filed, it should be waived, legal remedies should not be applied or if applied, it should be waived,
- The provisions of the first paragraph shall also apply to the files under investigation and prosecution on the date of publication of the Law establishing this article. In this case, the payment shall be made until the judgment is rendered,
- Among the files that are under appeal or appeal remedy review due to the crimes falling within the scope of Article 359 on the date of publication of the Law enacting this Article, a reversal decision shall be made for the files that require a favorable evaluation due to the amendments made in Article 359 by the Law enacting this Article,
- The files in the Chief Public Prosecutor’s Office of the Court of Cassation will be sent to the courts of first instance in accordance with the procedure upon their arrival,
- In Article 359, the determination of the conditions regarding the chain offense in the regulations made by the Law that enacted this article shall be made by opening a hearing
is provided for.
With the amendment, in the event that tax evasion offenses are committed in more than one calendar year or taxation period within the scope of the execution of the same criminal decision, the provisions of the chain offense in Article 43 of the Turkish Criminal Code can be applied. Accordingly, if the offenses subject to tax evasion are committed in more than one calendar year or taxation period, only one penalty will be imposed.
The amendments made to the Value Added Tax Law No. 3065 by Law No. 7394 are as follows
1- While the retention period in the delivery of residences and workplaces to foreigners within the scope of the exemption was subject to a 1-year retention period in Article 13 of the VAT Law, this period was increased to 3 years with the amendment made. The new regulation will enter into force on 01.05.2022.
2- The regulation on the refund of the value added tax incurred due to the construction works related to the investments made within the scope of the investment incentive certificate for the manufacturing industry in the provisional Article 37 of the VAT Law has been transformed into an exemption regulation, the exemption period has been redefined as 31.12.2025 and tourism investments with incentive certificates have also been included in the scope of the regulation.
Taxes incurred due to the delivery of goods and rendering of services within this scope will be deducted from the tax calculated on taxable transactions. Taxes that cannot be compensated through deduction can be refunded upon the request of the taxpayer who makes transactions within the scope of the exemption.
The President will be authorized to extend the above-mentioned period up to 3 years and the new regulation will enter into force on 01.05.2022.
3- Provisional Article 42 has been added to the VAT Law, exempting from VAT until 31.12.2023 the engineering services provided for the development of these vehicles to taxpayers who manufacture electric motor vehicles in Turkey as a result of R&D activities carried out exclusively in Turkey and within the scope of the investment incentive certificate.
The new regulation entered into force on the publication date of the Law.
Law No. 7394 amends the Income and Corporate Tax Laws as follows
1- “Expenses of advertisements given to those who are banned from advertising within the scope of additional article 4 of the Law No. 5651 dated 04.05.2007 on the Regulation of Broadcasts on the Internet and Combating Crimes Committed Through These Broadcasts” has been added to the first paragraph of Article 41 of the Income Tax Law No. 193 as subparagraph 11 and to the first paragraph of Article 11 of the Corporate Tax Law No. 5520 as subparagraph (j).
Thus, the payments made by real and legal persons for the advertisements they give to social network providers, which are banned from advertising within the scope of the additional article 4 of the Law No. 5651, will not be considered as expenses in terms of Income Tax Law and Corporate Tax Law.
2- With the provision added to Article 66 of the Income Tax Law, “Physicians who are considered insured within the scope of subparagraph (b) of the first paragraph of Article 4 of the aforementioned Law in accordance with the additional Article 10 of the Law No. 5510; physicians who are considered insured and specialists according to the medical specialty legislation”, it is regulated that the income of physicians who are self-employed and who carry out their activities in private health institutions and health institutions and organizations belonging to private health institutions and foundation universities based on private contracts without having a separate practice office and specialists according to the medical specialty legislation will be taxed as self-employed.
3- Amendments were made to Article 5 of Law No. 5520 with Article 22 of Law No. 7394. With the amendment made in subparagraph (a) of Article 5 of the Law No. 5520, in addition to the dividends obtained from mutual funds obtained from mutual funds, the earnings obtained by returning the participation shares to the fund are also included in the scope of the exemption, and it is ruled that if there is a gain from the valuation of these shares at the end of the period, these earnings will also be considered as exempt.
With the addition made to subparagraph (d) of the same article, it has been clarified that real estate investment trusts whose main activity is not portfolio management related to real estate, such as real estate investment trusts that will exclusively operate a portfolio consisting of infrastructure investments and services, are not covered by the exemption.
With the amendment made in subparagraph (e) of the same article, it is ensured that the gains arising from the sale of the participation shares of the investment funds, which constitute the source of the exemption gains within the scope of subparagraph (a) of Article 5, and the gains arising from the sale of the participation shares of the investment funds, which are considered within the scope of the exemption by the institutions that receive the dividends distributed by the institutions and the redemption income arising from the return to the fund, if they are held for more than two years, are also subject to 75% exemption.
With the 22nd article of the Law No. 7394, the amendment made to the subparagraph (4) of subparagraph (d) of the first paragraph of Article 5 of the Corporate Tax Law and the 25th article of the Law entered into force on the date of publication to be applied to the corporate earnings of the taxation period of 2023.
4- With the 23rd article of the Law No. 7394, paragraph (3) has been added to the 6th article of the Corporate Tax Law No. 5520 and it has been ruled that the amounts transferred by the shareholders of the company, which is decided to complete the capital in accordance with the 376th article of the Turkish Commercial Code No. 6102 dated 13.01.2011, in an amount that will cover the unpaid portion due to loss, will not be taken into account in the determination of corporate income.
5- The corporate tax rate for banks, financial leasing, factoring and financing companies, electronic payment and money institutions, authorized foreign exchange institutions, asset management companies, capital market institutions, insurance and reinsurance companies and pension companies within the scope of Law No. 6361 was set at 25%.
You can access the relevant law here.
Sincerely,
BİLGENER
