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• 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 of publication.

• 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.

• With the new provision added to the Real Estate Tax Law,
“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 a residential tax. Accordingly, those valued
between TL 5 million and TL 7 million 500 thousand will
be taxed at a rate of 3 per thousand, those valued between
TL 7 million 500 thousand one and TL 10 million will be
taxed at the rate of 6 per thousand and those with a value
exceeding TL 10 million and one will be taxed at a rate of
10 per thousand. Effective: Date of publication.

For the collection of tax debts
of a limited liability company

from the shareholders, following
up for the legal representative
primarily is not required

That is the legal entity of the company which is primarily
responsible for the payment of tax debt of limited liability
companies, however, in the cercumstance that the
receivables cannot be collected from the legal entity of the
company or if it is understood that the debts cannot be
collected, both the company’s legal representatives and its
shareholders are responsible for the payment of these debts.

In order to be able to follow up for the public receivables
that cannot be collected or understood that they cannot
be collected from the legal entity of the limited company,
different opinions were existing on whether it was necessary
to pursue legal proceeding towards the legal representatives
of the company firstly or not in the presence of judiciary.

The State Council’s general assembly on the unification of
judgments decided to eliminate the contradiction between
the decisions by means of merging the case-law and
concluded that it is not necessary to follow-up the legal
representative primarily in order to start the follow-up of the
shareholder in the collection of the tax debt of the limited
liability company.

As per the Article 40 of the Law for State Council no.2575,
the departments and boards of the State Council and
administrative courts and the public authorities has to obey
this ruling given by the general assembly on the unification
of judgments.

Explanations in this article reflect the writer's personal view on the matter. EY and/or Kuzey YMM ve Bağımsız Denetim A.Ş. disclaim any responsibility
in respect of the information and explanations in the article. Please be advised to first receive professional assistance from the related experts before
initiating an application regarding a specific matter, since the legislation is changed frequently and is open to different interpretations.

12 November 2019