On 1 October 2021, Turkish Parliament members have submitted a new Tax Bill to the Parliament which includes tax filing periods, tax exemptions, and incentives. The key corporate tax measures of the Bill are:
- In the reduced corporate tax application, 10% of the investment contribution amount is allowed to be used by deducting it from other tax liabilities, excluding special consumption tax and value added tax, provided that it is requested until the end of the second month following the month in which the corporate tax return should be submitted;
- Introduces the mutual agreement procedure (MAP) applied within the scope of Double Taxation Agreements (DTAs) are being made. The Bill introduced a new section entitled ‘Mutual Agreement Procedure’ in the Tax Procedural Law No. 213;
- Changes the conditions of the tax reduction applied to 5% tax credit for compliant taxpayers; the condition that there is no finalized assessment made is limited in terms of tax types in the tax returns. If it is less than 1% of the credit amount limit, it is foreseen that the discount conditions are not violated;
- From 1 January 2022, corporate income tax (CIT) returns are to be filed by the 25th of the third month after the close of the fiscal year. For taxpayers having a financial year as a calendar year, CIT return will be declared by the end of March of the following year;
- Proposes to increase the notional interest deduction (NID) rate for capital increases from 50% of the deemed interest expense to 75% for foreign-sourced capital;
- Quarterly advance tax declaration return will apply only for the first three quarters and no advanced tax return will be submitted in the last quarter of a calendar year.
The Bill also includes measures regarding individual income tax and stamp duty tax. Most of the provisions of the Bill will generally apply from 1 January 2022.
