Turkish Residents to Notify The Central Bank of their FX Positions
In line with the recent amendments to the Decree No. 32 on Protection of the Value of Turkish Currency (“Decree No. 32”), the Central Bank of the Republic of Turkey (“CBRT”) has enacted the Regulation on the Principles and Procedures regarding the Monitoring of Transactions Affecting Foreign Exchange Position by the Central Bank of the Republic of Turkey (the “Monitoring Regulation”) (published in the Official Gazette dated February 17, 2018 and numbered 30335) with a view to enable the CBRT to monitor the foreign exchange positions (“FX Positions”) of Turkish resident individuals and legal entities.
Regulation on Data Controllers’ Registry has entered into force and the Board of Protection of Personal Data subsequently announced expected next steps with respect to establishment of Data Controllers’ Registry and data controllers’ obligation to register
As is known, Article 16/2 of Law on Personal Data Protection (Law No. 6698) (published in the Official Gazette dated April 7, 2016 and numbered 29677) (“Data Protection Law”) stipulates that real or legal persons, who process personal data, shall be registered before the data controllers’ registry (“Data Controllers’ Registry”) prior to commencing personal data processing and Article 16/5 provides that procedures and principles regarding Data Controllers’ Registry will be determined by a regulation.
New Restrictions in the Turkish Foreign Exchange Legislation on Foreign Currency Loans
A decree and a communiqué amending the Decree No. 32 on Protection of the Value of Turkish Currency (published in the Official Gazette dated August 11, 1989, No. 20249) issued by the Council of Ministers under the Law No. 1567, (the “Decree No. 32”) and the Communiqué on Decree No. 32 on Protection of the Value of Turkish Currency (published in the Official Gazette dated February 28, 2008 and numbered 26801) (“Communiqué No. 2008-32/34”), are published by the Council of Ministers in the Official Gazette dated January 25, 2018.
Türk Yabancı Para Mevzuatında Döviz Kredilerine İlişkin Yeni Sınırlamalar
Bakanlar Kurulu tarafından 1567 sayılı Kanun uyarınca düzenlenen Türk Parası Kıymetini Koruma Hakkında 32 Sayılı Karar’da (11 Ağustos 1989 tarihli ve 20249 sayılı Resmi Gazete’de yayınlanmıştır) (“32 Sayılı Karar”) ve Türk Parası Kıymetini Koruma Hakkında 32 Sayılı Karara İlişkin Tebliğ’de (28 Şubat 2008 tarihli ve 26801 sayılı Resmi Gazete’de yayınlanmıştır) (“2008-32/34 Sayılı Tebliğ”) değişiklik yapılmasına ilişkin Bakanlar Kurulu kararı ve buna ilişkin tebliğ 25 Ocak 2018 tarihli Resmi Gazete’de Bakanlar Kurulu tarafından yayınlanmıştır.
Under the Corporate Income Tax General Communiqué (Serial No. 11) [published in the Official Gazette dated December 31, 2016 and numbered 29935 (3rd bis)], amendments are made on the explanations stated under the Corporate Income Tax General Communiqué in relation to the implementation of undermentioned issues.Exemption on regional management centers, Exemption for the incomes derived through operating educational facilities, nurseries, day care and rehabilitation centers, Exemption on industrial property rights, Exemption on the income derived through sale and lease back transactions, Exemption on income derived through the sale of all sorts of assets and rights aimed at lease certificate issue, Deductions for Research & Development, Deduction on services delivered to entities and corporations resident abroad, Reduced corporate income tax application.
The amendments stated below are made by the Law No. 6770 (published in the Official Gazette dated January 27, 2017 and numbered 29961):Incomes derived by the SMEs merged within the scope of first paragraph of Article 19 of the Corporate Income Tax Law, holding an industrial registry certificate and carrying out manufacturing activities will temporarily be subject to a reduced corporate income tax rate. The reduced rate shall apply over the transferor SME's income until the date of merger only, the transferee SME's 3 years of income including the accounting period in which the merger took place. The reduction rate is determined by the Council of Ministers providing that it shall not exceed 75%, VAT exemption will be applicable on documented software, deliveries intangible of rights and leasing to the taxpayers with incentive certificate, VAT refund may be claimed regarding the construction businesses within the scope of investments made through investment incentive certificate in the manufacturing industry. However, it should be noted that such application is only valid for the year 2017. In this regard, the VAT incurred in 2017 for the abovementioned construction businesses that could not be compensated through deductions may be refunded upon claims of the taxpayers, Taxes which could not be refunded on account due to the transactions that are subject to reduced rate will be refunded in cash throughout their year in respect of sectors, goods/services groups and periods set by the Finance Ministry, Income derived through the transfer of ships and yachts registered at Turkish International Ship Registry by cancelling those out of the registry in order for enrolling to another registry or transfer of those through another method (as scraping or export) will also be considered as being exempt from income and corporation tax. The goods located abroad as of January 27, 2017 which are foreign flagged and classified under HS codes of 8901.10.10.00.11 and 8901.10.90.00.11 and as well as yacht, cruiser, boats and excursion snips existing under 89.03 tariff position are exempt from; Inheritance and gift tax in case of free of charge transfer to individuals and legal entities resident in Turkey, Any and all kinds of taxes including customs duties with respect to the transactions for their imports to Turkey, registration and enrollment.
Certain amendments are made on the application of VAT Law and Corporate Income Tax Law through the Law No. 6770 (published in the Official Gazette dated January 27, 2017 and numbered 29961) regarding the investments made with investment incentive certificate.
According to the abovementioned Law:VAT exemption will be applicable to the documented software, deliveries of intangible rights and leasing regarding the investments with incentive certificate, VAT which has been incurred but could not be compensated through deductions in 2017, with respect to the construction business expenses borne for the investments made in the manufacturing industry through investment incentive certificate may be refunded, For investment expenses borne during 2017 within the scope of investments made in the manufacturing industry through investment incentive certificates, the authorities granted to the Council of Ministers are extended in respect of the reduced corporate income tax application, The authority to apply the reduced rate of corporate income tax up to 75% over the incomes arising from the merger transactions of SMEs is granted to the Council of Ministers.
Under the Decree of the Council of Ministers (Decree No. 2017/9759) (published in the Official Gazette dated February 3, 2017 and numbered 29968), VAT rates applicable to residence construction projects the building licenses of which are obtained after January 1, 2017 (including this date) and residence construction projects to be tendered by public institutions and their affiliates after January 1, 2017 are re-determined.
In this regard, for the abovementioned residences with the net area up to 150 square meters that are built up as luxurious or first class construction within metropolitan regions, the VAT that shall apply in accordance with the tax value per unit square meters of its area on the date its license was obtained are stated below;8% for deliveries between TL 1,000 and TL 2,000 (TL 2,000 included), 18% for deliveries over TL 2,000 (8% until September 30, 2017).
It should be noted that any amendment is not made with respect to the VAT rate applicable to deliveries within the scope of residence construction projects with building licenses obtained between January 1, 2013 - December 31, 2016 and projects to be tendered by public institutions and their affiliates after January 1, 2013.
In addition, through the Decree of the Council of Ministers (Decree No. 2017/9759), the VAT for the delivery of residences that are subject to 18% will continue to apply at a rate of 8% until September 30, 2017.
VAT rates applicable to the delivery of following goods are re-determined by the Decree of the Council of Ministers (Decree No. 2017/9759) (published in the Official Gazette dated February 3, 2017 and numbered 29968).VAT rate for the delivery of yacht, cruiser, boat and excursion boats are re-determined as 1%. VAT rates for the delivery of goods (furniture) the HS Codes and description of which are introduced under the VAT Law are re-determined as 8% to be applicable until April 30, 2017 (including this date).
Through the Decree of the Council of Ministers (Decree No. 2017/9759) (published in the Official Gazette dated February 3, 2017 and numbered 29968); Special Consumption Tax (“SCT”) rates applicable to certain goods and vessels are re-determined as below:SCT rate applicable to yachts, cruisers, boats and excursion boats the HS Codes and descriptions of which are introduced under the List (No. 2) attached to the SCT Law is re-determined 0% (zero percent). SCT rate applicable to goods (refrigerators, freezers, water heaters, washing machines, tumbler dryers, dish washers and air conditioners) the HS Codes and descriptions of which are introduced under the List (No. 4) attached to the SCT Law are re-determined as 0% (zero percent) to be applicable until April 30, 2017.