Tax Alert 2/2014  
Part 1: The Double Tax Treaty Signed Between Turkey and Gambia

The Convention between the Government of Gambia and the Government of the Republic of Turkey for the Avoidance of Double Taxation with respect to the Taxes on Income and the Prevention of Fiscal Evasion has been signed in Ankara on February 11, 2014.


Part 2: More Moderate Criteria for Auditing Requirement

As it was stated in our Legal Alert: Tax 2013/1, the criteria for being subject to independent audit was determined under the Decree of the Council of Ministers No.2012/4213. However, new criteria were introduced by the Decree of the Council of Ministers No. 2014/5973 (published in the Official Gazette dated March 14, 2014 and No.28491) which lowers the previous ones.


Part 3: New Interpretation of Tax Authority regarding the Taxation of the Investments with Build-Operate-Transfer Model

The Tax Authority, in its ruling dated August 07, 2013 and No.62030549-120[94-2013/391]-1213, changed its interpretation with regard to the taxation of the investments conducted with Build-Operate-Transfer (�BOT�). As it is known, in BOT, lessee makes his investment on the land owned by the counter party (�Land Owner�) to the BOT agreement.


Part 4: The Scope of the Renouncement of the VAT Exemption for the Sale and Lease Back Transactions

Within the scope of sale and lease back transactions;

  • The Sale of the immovable properties to a financial leasing company,
  • Leasing of the immovable properties by the financial leasing company to the lessee (seller) and
  • Transfer of the ownership of the immovable properties back to the lessee (seller) by the financial leasing company

are exempt from Value Added Tax according to Article 17/4-y of the Value Added Tax Code (�VAT Code�) (Law No. 3065) (published in the Official Gazette dated 02 November 1984, No. 18563).

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Part 5: The Resource Utilization Support Fund Treatment in case of the Extension of Foreign Currency Loans Received Abroad

As it was explained in our Legal Alert: Tax 2013/1; pursuant to the Council of Ministers Decree No 2012/4116, Resource Utilization Support Fund (published in the Official Gazette in August 26, 2006 and No. 20264) (the �RUSF�) rates have been determined again with regard to foreign currency and gold loans extended by foreign residents to Turkish residents other than banks and financial institutions, which will be applicable to the loans granted after January 02, 2013.

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