30.10.2024/61
Regulation on Inflation Adjustment Differences of the Amounts Tracked in the Construction in Progress Account Not to be Recognized as Income in the Investment Period has been Published
With the Law No. 7529 published in the Official Gazette dated 30.10.2024 and numbered 32707, a subparagraph has been added to paragraph (A) of Article 298 of the Tax Procedure Law, which states that the inflation adjustment differences of the amounts followed in the construction in progress account shall not be recognized as income during the investment period.
Accordingly,
- Inflation adjustment differences arising from the inflation adjustment of the amounts followed in the construction in progress account and followed in the sub-account of this account are shown in a special fund account in the liabilities of the balance sheet and are not taken into consideration in determining the period earnings.
- These amounts in the special fund account are taken into account in the determination of the period income in equal installments within the period in which the investment should be completed and the related economic asset should be capitalized and the four accounting periods following this period.
- The amounts monitored in the special fund account pursuant to this subparagraph and not taken into account in the determination of the period income shall be increased each year by the revaluation rate determined in accordance with this Law for the previous year.
- Amounts recorded in these accounts are not subject to inflation adjustment.
- In cases where the business is discontinued during the investment period or after the capitalization of the economic asset, or some or all of the said amounts followed in the special fund account are transferred to another account or withdrawn from the enterprise, the amounts not taken into account in the period earnings in accordance with this subparagraph shall be taken into account in the determination of the corporate income of the period in which the business is discontinued or the special fund account is used partially or completely in violation of the provisions of this subparagraph.
On the other hand, with the aforementioned Law and Law No. 7529, a regulation was made in the provisional Article 33 of the Tax Procedure Law. Pursuant to the aforementioned regulation, companies in liquidation and bankruptcy, economic state enterprises and state-owned enterprises have been included among the taxpayers whose inflation adjustment profits / losses will not be taxed in 2024 and 2025.
You can access the relevant Law here.
Sincerely,
BİLGENER
