Amendments to the tax laws and the latest taxes introduced through the Law no.7194 published in the Official Gazette dated 7 Dec 2019.

Amendments to the tax laws and the latest taxes introduced through the Law no.7194 published in the Official Gazette dated 7 December 2019 are summarized as follows:

- A “digital services tax” to be paid through certain digital services, especially all advertising services delivered in the digital environment is introduced. The tax will be paid at a rate of 7.5% per month over the revenue obtained from services that are included in the subject of the tax.  Effective date: 1 March 2020. 

- The newly introduced accommodation tax will apply as 1 % until 31.12.2020 despite it has been set as 2 %. Effective date: 1 April 2020.

- A new tax called “valuable housing tax” is introduced. The residential immovable property located within the borders of Turkey with a value of exceeding 5 million Turkish liras will be subject to valuable housing tax. Effective date: 7 December 2019.

- In cases where shuttle service is not provided to employees by employers, on the condition that the daily transportation cost of the working days does not exceed 10 liras and the related payments are made in the form of public transportation card or ticket, an income tax exemption is introduced. Effective date: 1 January 2020.

- Through the amendments to Article 40 of Income Tax Law containing the deductible expenses in commercial income and Article 68 indicating the deductible expenses for the self-employed, certain restrictions are imposed on the costs of rented or purchased passenger cars. Shall be applied to income and earnings for the taxation period starting from 01.01.2020.

- A tax return for the wages taxed by withholding, received from a single employer, exceeding the amount TL 500.000 (TL 600.000 for 2020) in the 4th bracket of income tax tariff will be submitted. Shall be applied to the income acquired as of 01.01.2020.

- As per the new bracket added to the income tax tariff for the income exceeding TL 500.000 (including wages), these incomes will be taxed at a rate of 40 %. Shall be applied to the wages acquired as of 01.01.2020 and other income acquired as of 01.01.2019.

- The rate for banking and insurance transaction tax (BSMV) applied as 1 per thousand in foreign exchange transactions is increased to 2 per thousand. Effective: date: 7 December 2019.

- Regarding the implementation of invitation to disclosure, the duration of the disclosure and the period of submitting tax returns and payment of those invited to the disclosure are increased from 15 days to 30 days. Effective date: 01.01.2020.

- Article 376 regulating the deduction of tax penalties is amended and the discount rate is set as 50% regardless of whether the tax loss penalties are committed for the first time or not. Effective date: 7 December 2019.

- An article titled as “abandonment of legal remedy” is added to the Tax Procedure Law in order to resolve the tax disputes between the taxpayer and the administration. Effective date: 01.01.2020.