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The effective date for Turkey regarding the Convention is the Deduction on forex transactions
first day of the month following the end of the three-month
period after the notifications are submitted to the OECD; the Income from leveraged trading (forex) transactions carried
date of implementation of the contract provisions may differ out through banks and brokerage houses have been
for taxes deducted at source and other types of taxes. included in the scope of temporary Article 67 for taxation
through deduction at source. However, this withholding
Turkey's preference on Article 5 of the MLI should be revised implementation will be valid for the income acquired as of 1
in the legislative process. If the draft passes into law in its January 2021.
current form, it will weaken the competitiveness of Turkish
companies and therefore necessary amendments should Impact of other exemptions on taxes deducted
urgently be made in the Corporate Tax Law the same as
similar practices in other countries, including "participation With this regulation, in cases where there is no exception
exemption from foreign participations", "credit method with or exemption provision that includes the taxes withheld
regard to the taxes imposed by the foreign participation explicitly in other laws, it has been added to the text of the
earnings in previous countries". This is the only way to offset Article that withholding will be applied to these incomes
the extent of this adjustment given to tax treaties. within the scope of the temporary Article 67.

Companies buying their own shares
This is the summary of the article published in the
Ekonomist magazine’s issue 33, dated 13.12.2020. Through the regulation made, it is imposed that the buyback
of their own shares by fully liable capital companies will be
considered as distributed dividends under certain conditions
and to apply a 15% withholding tax on the amounts
Latest tax regulations and their calculated according to the following principles. In the Law’s
preamble, it is stated that in this way, fully taxpayer capital
impact on 2021 companies are prevented from distributing their profits
without tax by acquiring their own shares and a tax security
The most hotly-debated topic of the Law no.7256, published institution has been established for the tax to be collected
last month was the restructuring of public debts (SSI, through withholding regardless of whether the company
penalties, etc.), particularly the specified tax debts of profits are distributed or not.
taxpayers. As a matter of fact, it continues to be at the top of
the agenda as the application period is still ongoing. Companies with shares offered to the public initially

Of course, this law did not only contain restructuring. It Pursuant to the law, the corporate tax rate will be applied
brings many amendments to the tax laws, also. In this article, with a 2 points reduction to the income of companies with
we will focus on some of the essential regulations of Law shares offered to the public at a rate of at least 20% to be
no.7256, other than debt restructuring and asset peace. traded for the first time on the Borsa Istanbul Equity Market.
However, this reduced rate will be valid for the earnings of 5
Accommodation tax postponed accounting periods, starting from the accounting period in
which the shares were offered to public initially.
The overnight service provided in accommodation facilities
such as hotels, motels, holiday villages, pensions, apart On the other hand, the concerning rate reduction is
hotels, guesthouses, camping, chalets, housing at highlands not applicable to banks, leasing companies, factoring
and all other services offered within the accommodation companies, financing companies, payment and electronic
facility by being sold with this service (food, drink, activity, money institutions, authorized foreign exchange offices,
entertainment services and the use of pool, sports, thermal asset management companies, capital market institutions,
and similar areas) are subject to accommodation tax. insurance and reinsurance companies and pension
companies.
This tax was postponed to 2021 due to the pandemic
without being implemented. This time it is postponed once This regulation will be applied to income acquired from 1
again through the law no.7256. If there is no change, January 2021. For taxpayers subject to a special accounting
implementation will start as of the beginning of 2022. period, it will be applied from the beginning of the special
accounting period starting within the 2021 calendar year.
Temporary article 67 extended
Computer donations to the Ministry of National Education
Temporary Article 67 of the Income Tax Law is the provision
regulating the taxation of securities income through In accordance with a temporary article in the VAT law,
withholding. It’s applied since 2006. Although it was free deliveries of computers and hardware to the Ministry
extended several times before, the implementation period of National Education and related software delivery and
was ending at the close of this year. The implementation services are exempt from VAT until the end of 2020. The
period of the Article has been extended until the end of delivery and execution of these goods and services to those
2025 through the law no.7256. The Law also authorizes the who will donate are likewise considered as an exception.
President to extend this period up to five years. Period of this exemption has been extended until the end of
2023 through the Law no.7256.

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