How do taxes affect earthquake donations? Finance announced…

The Tax Administration ruled on the issue following criticism of the tax deduction of billions of liras that companies donated for earthquake victims in the ‘One Heart Turkey Campaign’.

Noting that it made a statement in order to correctly inform the public and taxpayers, the Tax Administration said: “Donations and aid are deducted from the tax base, not from the tax.”

4000 TL TAX DEDUCTION ON 20 TILL OF DONATIONS

This confusing situation was summarized as follows by giving an example:

“The Income and Corporation Tax Laws allow the deduction of donations and aid from the income obtained under certain conditions and from the benefits of the institution.

Tax deductions and tax deductions are completely different concepts.

If the donations and aid meet the necessary conditions, they are deducted from the income and profits of the companies in determining the tax base for the corresponding year. The remaining amount as a result of this discount is subject to tax.

To explain the problem with a simple example; When an institution with an income of TL 100,000 donates TL 20,000 to AFAD, it will deduct TL 20,000 from its earnings. A corporate tax of 16,000 TL will be paid, calculated at a rate of 20 percent on the remaining 80,000 TL. In short, the amount of tax withheld is 4 thousand TL.”