The principles of application of the additional corporation tax were determined

With the Law for the Restructuring of Certain Credits and the Modification of Certain Laws, the principles for the implementation of the additional corporate tax for a single time were determined.

The General Communiqué of Law No. 7440 on Restructuring of Taxes and Certain Other Credits, prepared by the Tax Administration of the Ministry of Finance, was published in the Official Gazette and entered into force.

Consequently, with Law No. 7440 on the Restructuring of Some Loans and Modification of Certain Laws, an additional corporate tax was introduced for one time only.

With the statement, the principles for the application of the additional tax were determined, and a detailed explanation and examples of applications were also included in the statement.

An additional tax will be taken from the corporate tax return to be filed in 2022, corporate taxpayers will pay this tax, income taxpayers will not pay additional tax.

Corporate taxpayers from 11 provinces and 1 district affected by the earthquake, which was declared force majeure, will not pay additional taxes.

Pursuant to the provisions of the Corporate Tax Law and some other laws, corporation taxpayers can make their exemptions and deductions subject to deduction in the determination of business net income in the return.

It is expected to affect about 20,000 taxpayers.

The rule is expected to affect some 20,000 taxpayers who have exemptions and reductions in the 2022 corporate tax. The additional tax will be calculated as 10 percent on the discount and exception amounts in the 2022 corporate tax return.

The exceptions included in the scope will be concepts such as exemption from participation profits, exemption from income from the sale of participation shares and real estate, exemption from profits obtained abroad and that meet certain conditions, exemption from profits from the free zone and technological development.

Among discounts, investment, R&D, cash capital discounts were included in the scope.

Within the scope of article 32/A of the Corporate Tax Law, an additional tax of 10 percent will be charged on the base subject to reduced corporate tax.

With the exception of members’ earnings, the additional tax will be calculated at 5 percent for exempt income obtained from abroad and that have a tax burden of 15 percent.

For taxpayers who are assigned a special accounting period, the additional tax will be calculated on the bases of discount, exemption and reduction of Corporate Tax taken into account in the Corporate Tax returns required for the accounting period ending on 2023.

THE CALCULATED TAX WILL BE PAID IN TWO INSTALLMENTS

The calculated additional tax will be paid in two installments in August, the first installment within the corporate tax payment period in April and the second in the fourth month following this period, in August.

No additional tax will be charged on discounts on R&D and design and techno-city profits from micro and small businesses.

Although the R&D deduction amounts and the technopolis profit exemption amounts were also within the scope of the additional tax, these discounts and exemptions for approximately 3,000 R&D and technology companies, defined as new entrepreneurs and micro and small developing businesses, were excluded from the scope of the additional tax. tax.

Exemption earnings from mutual funds and partnerships, including venture capital funds, are excluded from the scope of the additional tax.

All profits from investment funds and companies, which are important for the development of capital markets and the business ecosystem, are exempt from corporate tax, while profits from these funds and companies are also excluded from the scope of the tax. additional.

Pursuant to article 325/A of the Tax Procedure Law, funds earmarked for investment in venture capital funds or companies may be deducted from social income. These amounts deducted from the tax base are also excluded from the scope of the additional tax.

KKM NOT SUBJECT TO ADDITIONAL TAX

Deposit accounts protected in currency and donations and aid will not be subject to additional tax. Exemption amounts applied to income from currency-protected deposit accounts, exemption amounts related to gains from sale-lease-purchase transactions with leasing companies and asset leasing companies, risturn exemption amounts benefited by cooperatives , all kinds of donations and aid, and additional tax on sponsorship expenses will not be accepted.

The amounts that appear in the declaration but are not included in the scope of the deduction and exemption due to their nature will not be included in the scope of the additional tax.

Valuation differences between the Turkish Accounting Standards/Turkish Financial Reporting Standards and the Tax Procedure Law, shown in the “Other discounts and exceptions” lines in the statement, foreign exchange gains resulting from the appreciation of the Turkish lira in loans accepted as covert capital, cancellation of severance provision, etc. No additional tax will be calculated on the amounts.

In accordance with the agreements to avoid double taxation and other international bilateral or multilateral agreements, no additional tax will be levied on profits exempt from corporation tax. In liquidation, merger, transmission and total spin-off operations, no additional tax will be applied to returns filed before March 12, 2023.

Due to the liquidation, merger, transmission and total spin-off operations, no additional tax will be calculated on the tax returns of the taxpayers, who have benefited from the returns they have submitted before the date of publication of the Law, March 12, 2023, for the year 2022.

Those who do not show their exceptions and discounts on their declarations and who report incompletely will pay the additional tax with a penalty. Exceptions and eligible deductions must be shown on the return.

Additional tax accrued incompletely for discounts and exceptions that are not shown in the declaration or that are not included in the lines of discounts/exceptions but will be collected with a penalty for tax loss and delay interest. (AA)