Tax Alert 2/2017
Q2/2017 Inflation Increase will not apply to the Special Consumption Tax levied on Cigarette and Tobacco Products for the Second Period of 2017

Under the Decision of the Council of Ministers (Decision No. 2017/10462) (published in the Official Gazette dated June 30, 2017 and numbered 30110); it was announced that the inflation increase will not apply to the minimum fixed and fixed tax amounts that are listed in the Schedule (B) of the List No (III) attached to the Special Consumption Tax Law (Law No. 4760) (published in the Official Gazette dated June 12, .2002 and numbered 24783) (“SCT Law”) for the period between July 2017 and December 2017.

Q2/2017 Amendments on the Definition of the Standard Fuel Tank and the Application of Diplomatic Exemption stated under the SCT Law Communiqué

Under the SCT Law List No (I) General Implementation Communiqué; explanations made in relation to the application of special consumption tax levied on the goods such as petroleum and natural gas products and solvent and solvent derivatives that are listed in the list No (I) attached to the SCT Law.

Q2/2017 Multilateral Instrument signed by Turkey

In accordance with the Action Plan 15 (Tax Base Erosion and Profit Transfer), the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (“Multilateral Instrument-MLI”) which had been drafted by the Organization for Economic Co-operation and Development (“OECD”) on November 24, 2016 was signed by 68 countries, including Turkey, at the signing ceremony which took place in Paris on June 7, 2017.

Q2/2017 The Collection and Payment of Motor Vehicle Leasing Fees through Banks become Obligatory

As known, first and second class merchants; self-employed persons; merchants whose profits are determined in a simple manner; farmers who are obliged to keep books; tradesmen who are exempt from taxes are obliged to make and collect any and all kinds of payments in excess of TL 7.000,00 through banks or financial intermediary institutions. On the other hand, such persons are also obliged to prove their payments in excess of and collections TL 7.000,00 through the documents issued by the abovementioned institutions.

Q2/2017 The Payment and Collection of Short Term Rental Fees through Banks become Obligatory

In accordance with the Income Tax Law Communiqué (Serial No. 298) (published in the Official Gazette dated June 9, 2017 and numbered 30091), in case of short term rentals (i.e.; such as daily, weekly or in a similar manner) for houses; the payment and collection of short term rental fees in any amount must be made through banks or post office department (“PTT”). On the other hand, such payments or collections must be proved through documents issued by the abovementioned institutions.

Q2/2017 Procedures and Principles regarding the Restructuring of Accrued Public Receivables

UThe General Communiqué on the Law (No. 7020) with respect to the Restructuring of Certain Receivables (published in the Official Gazette dated May 27, 2017 and numbered 30085) entered into force on the date of its publication.

The abovementioned Communiqué covers detailed explanations in relation to the procedures and principals on the restructuring of public receivables falling under the Law No. 7020.

Q2/2017 Ratification of the Convention regarding the Reciprocal Administrative Cooperation on Tax Issues

TheAs known, the Convention regarding the Reciprocal Administrative Cooperation on Tax Issues (the “Convention”) was signed by the Republic of Turkey during the Leaders’ Summit of the G-20 countries held in Cannes, France on November 3, 2011.

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Q2/2017 The General Implementation Communiqué on Stamp Tax and Fee Exemption for Exports and Other Foreign Exchange Gaining Activities

The General Implementation Communiqué on Stamp Tax and Fee Exemption for Exports and Other Foreign Exchange Gaining Activities (published in the Official Gazette dated May 18, 2017 and numbered 30070) includes explanations in relation to the export and import transactions and other foreign exchange gaining activities, including stamp tax and duties exemption.

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Q2/2017 The Draft General Communiqué regarding the Standard for Automatic Exchange of Financial Account Information in Tax Matters is shared with Financial Institutions

The Standard for Automatic Exchange of Financial Account Information in Tax Matters (“CRS”) was accepted on the basis of reciprocity in the G20 Leaders’ Summit dated November 16, 2014.

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Q2/2017 Procedures and Principles regarding the VAT Exemption on the Delivery of Residences and Workplaces made to Non-Resident Taxpayers and Expatriates

The procedures and principles regarding the VAT exemption which shall apply on the delivery of workplaces and residences made to non-resident taxpayers and the expatriates were determined by the VAT Communiqué (Serial No. 12) (published in the Official Gazette dated May 5, 2017 and numbered 30057).

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Q2/2017 Amendments on the Investment Incentive Regulation

Amendments provided below were made on the Decision for State Aid on Investments (Decision No. 2012/3305) by the Decision of the Council of Ministers (Decision No. 2017/10111) (published in the Official Gazette dated May 3, 2017 and numbered 30055).

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Q2/2017 Extension of the Reduction of the VAT rate on Furniture and the application of 0% SCT Rate on White Appliances until September 30, 2017

As known, through the Decision of the Council of Ministers (Decree No. 2017/9759) (published in the Official Gazette dated 3 February 2017 and numbered 29968);

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Q2/2017 The Ratification of Certain Agreements on Reciprocal Promotion and Protection of Investments

The main purpose of the Agreements on Reciprocal Promotion and Protection of Investments is to determine the foreign capital investments that will be made within the borders of the signatory countries and the treatment which will be applied to the related activities, to create favourable conditions for investment promotion and protection.

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Q2/2017 Restructuring of Certain Public Receivables

The Law regarding the Restructuring of Certain Receivables and Amendments on Certain Laws and one Statutory Decree (Law No. 7020) (published in the Official Gazette dated May 27, 2017 and numbered 30078) (“Restructuring Law”) entered into force on the date of its publication.

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Tax Team

The award winning Pekin & Pekin Tax practice team leaves regular compliance support to accounting firms and instead focuses on more complex cases, giving clients direct practical and innovative advice.

To discuss how these developments affect your business interests please contact either:

Fethi Pekin
Managing Partner
fpekin@pekin-pekin.com
or

Firat Yalçin
Partner, Tax
fyalcin@pekin-pekin.com

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