Law No. 7421 Amending Certain Tax Laws Published
With the Law No. 7421 on Amendments to the Tax Procedure Law and Other Laws, published in the Official Gazette No. 32025 on November 26, 2022, various regulations, including tax laws, have been introduced.
The tax-related amendments made by this Law are summarized below:
1. The Ministry of Treasury and Finance is Authorized to Take Guarantees from Taxpayers Engaged in Motor Vehicle Trade.
With the addition of subparagraph (10) to the first paragraph of the repealed Article 257 of the Tax Procedure Law No. 213, taxpayers engaged in motor vehicle trade as defined in the Special Consumption Tax Law No. 4760 are authorized to take guarantees to ensure the collection security of taxes up to 30 million Turkish liras. The Ministry of Treasury and Finance is authorized to determine the type, amount, time of provision, and return conditions of the guarantee, based on the taxpayer’s business area, legal status, tax liability duration, asset or equity size, number of employees, reports or findings regarding the use of fake or misleading documents, business or production volume, and product and taxpayer groups. The guarantee amount may be reduced to zero or increased up to twice the mentioned amount, and it will be determined when no guarantee is required and other procedural and substantive issues regarding the application.
In addition, changes were made to the repealed Article 355 of the Tax Procedure Law, and non-compliance with the guarantee obligation is now included within the scope of a special procedural penalty. Accordingly, taxpayers engaged in motor vehicle trade who fail to provide the required guarantee may be subject to a special procedural penalty equal to 0.3% of the total gross sales from the previous accounting period. The penalty will not be less than ten times the amount specified in the first paragraph of Article 355, but not exceeding 1,300,000 TL for 2022.
2. Institutions Operating in the Istanbul Finance Center are Given the Opportunity to Deduct 50% of the Profit Earned from Transit Trade from the Corporate Tax Return.
With the addition of subparagraph (i) to the first paragraph of Article 10 of the Corporate Tax Law No. 5520, institutions operating in the Istanbul Finance Center region with a participant certificate under the Istanbul Finance Center Law may deduct 50% of the profit earned from the sale of goods purchased from abroad and sold abroad, or from intermediary activities in foreign transactions, from their corporate tax return.
To benefit from this deduction, the profit must be transferred to Turkey by the due date for filing the annual corporate tax return for the relevant accounting period, and the seller and buyer involved in the intermediary activity must not be in Turkey.
The President is authorized to reduce or increase the rate specified in this subparagraph from zero to double the amount.
You can access the relevant Law here.
Best regards,
BİLGENER
