Tax Alert 3/2017
Q3/2017 Withholding Tax Rate on Income Derived through Government Bonds and Lease Certificates issued based on Gold is determined as 0 %

Pursuant to the Decree of the Council of Ministers (Decree No. 2006/10731), withholding tax rate applies at the rate of 0% on the income derived through the futures and options agreements executed based on stocks and stock indexes, stocks including brokerage warrants traded at Istanbul Stock Exchange (except for the stocks of investment trusts) and participation certificates of stock intensive funds.

Q3/2017 Approval of the Memorandum of Understanding with regard to the Commentary and Implementation of the Agreement between Turkey and Gibraltar on the Exchange of Information on Tax Issues

The Decree of Council of Ministers (Decree No. 2017/10687) regarding the Approval of the Memorandum of Understanding (“MoU”) regarding the Commentary and Implementation of the Agreement on the Exchange of Information on Tax Issues between Turkey and Gibraltar was published in the Official Gazette dated September 29, 2017.

Q3/2017 General Communiqué on the Prevention of Double Tax Treaties (Serial No.4) published

Under the General Communiqué on the Prevention of Double Tax Treaties (Serial No. 4) (published in the Official Gazette dated September 26, 2017 and numbered 30192); explanations are provided in relation to the taxation of incomes derived by the residents (i.e. individuals or corporations) of other signatory countries through professional activities or similar activities in accordance with double tax treaties signed between Turkey and third countries.

Q3/2017 VAT Withholding Rate on Construction Works, Engineering-Architecture and Project Study Services Increased

Under the General Communiqué (Serial No. 14) (published in the Official Gazette dated September 27, 2017 and numbered 30193), the following amendment on the VAT General Implementation Communiqué was announced:

Q3/2017 Approval of the Agreement Concerning the Reciprocal Promotion and Protection of Investments between Turkey and Guatemala

The Decree of Council of Ministers (Decree No. 2017/10669) on the Approval of the Agreement Concerning the Reciprocal Promotion and Protection of Investments between Turkish and Guatemalan governments was published in the Official Gazette dated August 24, 2017 and numbered 30164.

Q3/2017 Approval of the Agreement Concerning the Reciprocal Promotion and Protection of Investments between Turkey and Colombia

The Decree of Council of Ministers (Decree No. 2017/10668) on the Approval of the Agreement Concerning the Reciprocal Promotion and Protection of Investments between Turkish and Colombian governments was published in the Official Gazette dated August 24, 2017 and numbered 30164.

Q3/2017 Approval of the Agreement for Concerning the Reciprocal Promotion and Protection of Investments between Turkey and Mexico

The Decree of Council of Ministers (Decree No. 2017/10592) on the Approval of the Agreement Concerning the Reciprocal Promotion and Protection of Investments between Turkish and Mexican governments was published in the Official Gazette dated August 22, 2017 and numbered 30162.

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Q3/2017 Certain Laboratory Investments are covered under the Investment Items with Higher Priority

Through the Decree of Council of Ministers (Decree No. 2017/10585) (published in the Official Gazette dated August 17, 2017 and numbered 30157), the subparagraph provided below was added to the paragraph 1 in Article 17 of the Decree of the Council of Ministers on Investment Incentives (Decree No. 2012/3305):

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Q3/2017 Approval of the Exchange of Information Agreement on Tax Issues between Turkey and Guernsey

The Decree of Council of Ministers on the Approval of Exchange of Information Agreement on Tax Issues between Turkey and Guernsey and the Protocol attached to it were published in the Official Gazette dated August 2, 2017 and numbered 30142.

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Q3/2017 Amendments on the Communiqué regarding the Implementation of Investment Incentives

Amendments on the “Communiqué regarding the Implementation of the Decree on Investment Incentives (Communiqué No. 2012/1)” were made through the Communiqué (Communiqué No. 2017/1) which was published in the Official Gazette dated July 26, 2017 and numbered 30135.

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Q3/2017 The Reduction of VAT and Increase in the Special Consumption Tax Rates on LPG

Through the Decree of Council of Ministers (Decree No. 2017/10468) (published in the Official Gazette dated July 28, 2017 and numbered 30137), the VAT rate on Liquefied Petroleum Gas (“LPG”) existing under the HS Code 2711.19.00.00.11 reduced to 8% from 18%.

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Q3/2017 Procedure and Principles regarding the Implementation of Invitation to Explanation

As known, the Article 370 of Tax Procedural Law was reshaped under the title “Invitation to Explanation” by Article 22 of the Law No. 6728 which was published in the Official Gazette dated August 9, 2016 and numbered 29796.

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Q3/2017 Approval of the Agreement for Concerning the Reciprocal Promotion and Protection of Investments between Turkey and Pakistan

The Decree of Council of Ministers regarding the approval of the Mutual Agreement on Encouragement and Protection of Investments signed between Turkey and Pakistan (Decree No. 2017/10348) was published in the Official Gazette dated July 7, 2017 and numbered 30117.

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Q3/2017 Amendments on the Technological Development Regions Law

Certain amendments were made on the Technological Development Regions Law through the Law No. 7033 (published in the Official Gazette dated July 1 2017 and numbered 30111). Such amendments would be stated as follows:

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Q3/2017 Amendments on Stamp Tax, Fees and Real Estate Tax Laws

Certain amendments were made on the legislation in relation to the stamp tax, fees and real estate tax, through the Law No. 7033 (published in the Official Gazette dated July 1 2017 and numbered 30111). Such amendments would be stated as follows:

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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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