On 11 November 2020, the Turkish Parliament approved Law No. 7256 on “Restructuring Public Receivables and Amending Certain Laws”, which was published on 17 November 2020 in the Official Gazette. With the aforementioned Law, finalized public receivables are structured, asset peace regulation is introduced, employment regulations are made and various tax laws are amended. The Law entered into force on 17 November 2020.
The Law includes the following key measures:
Debt Restructuring
Within the scope of the Law on Restructuring Certain Receivables and Amending Certain Laws, the procedures and principles regarding the implementation of the provisions regarding the restructuring of public receivables, which are followed by the collection offices of the Ministry, special provincial administrations, municipalities, and Investment Monitoring and Coordination Presidencies. Tax debts will be structured and paid in 18 installments, tax debts covering Treasury receivables will be structured.
Accordingly, in order for the said receivables to benefit from the restructuring, it must be finalized as of 17 November 2020, which is the date of publication of the law and belongs to the period before and before 31 August 2020.
Borrowers who want to pay their debts covered by the law by structuring will apply in writing to the collection offices they owe until 31 December 2020.
50% of tax penalties will be imposed due to participation and tax penalties imposed due to participation and monthly change rates of D-PPI (Domestic Producer Price Index) until the promulgation date of this Law, which is not paid although they are due or are not yet due, and are not due to a tax basis. the amount to be calculated on the basis of; In case the unpaid receivables consist only of delay increase, instead of the delay increase, the amount to be calculated based on the D-PPI monthly change rates, the remaining 50% of the penalties, and all the delay increases related to these penalties, provided that it is paid in full in the time and manner specified in this Law.
CIT rate reduction for entities to be traded on the Istanbul Stock Exchange
The Law reduces the corporate income tax (CIT) rate to 20% from 22% for 5 years, for companies with at least 20% of their shares listed on the Istanbul Stock Exchange in an initial public offering.
Withholding tax regarding buyback shares
A 15% withholding tax will be applied for fully liable capital companies acquiring their own shares or partnership shares (buyback shares).
Postponement of the implementation date of Accommodation tax
Accommodation tax will be implemented on 1 January 2022 instead of 1 January 2021.
