Under the latest amendment to the “Law No. 7440 on the Restructuring of Certain Receivables and the Amendment of Certain Laws” published in the Official Gazette No. 32130 on March 12, 2023, corporate tax payers in Turkey are now subject to additional tax obligations. The 27th paragraph of Article 10 introduces two new tax measures:
Firstly, a 10% tax will be applied to the exemption and deduction amounts from corporate income, as well as the tax base for reduced corporate tax in Turkey. These will be reflected on the 2022 corporate tax in Turkey return and are not related to the company’s income for the year.
Secondly, an extra 5% tax will be levied on exempt foreign income that is proven to have a tax burden of at least 15%, excluding cases specified in subparagraph (a) of the first paragraph of Article 5 of the Law No. 5520. This tax will be paid in two installments, with the first due during the corporate tax payment period in Turkey and the second due four months later.
Special accounting period taxpayers will also be subject to this tax on their tax returns for the accounting period ending in 2023. It cannot be deducted from any tax or taken into account as an expense or discount.
However, micro and small businesses defined under Article 407 of the Presidential Decree on the Presidential Organization dated July 10, 2018, which earn income from technology development zones, R&D, and design centers, are exempt from this tax.
As of February 6, 2023, businesses in Adana, Adıyaman, Diyarbakır, Elâzığ, Gaziantep, Hatay, Kahramanmaraş, Kilis, Malatya, Osmaniye, and Şanlıurfa provinces and Gürün District of Sivas Province are excluded from this additional taxation.