The Turkish parliament received tax reform legislation on 16 July, 2024. This proposal includes provisions for implementing the Pillar Two global minimum tax, in line with the GloBE rules approved by the BEPS Inclusive Framework.
The global minimum tax will be applicable for fiscal years starting on or after 1 January, 2024, with the first returns due in 2025. The bill also proposes implementing a qualified domestic minimum top-up tax (QDMTT) for members of in-scope groups and certain safe harbours. The IIR and QDMTT apply for financial periods beginning on or after 1 January, 2024, and the UTPR generally applies for financial periods beginning on or after 1 January, 2025.
The proposal aims to make arrangements to explain the discrepancies between the determined tax bases and the declared tax bases.
The legislation also authorises the inclusion of some payments in the scope of withholding in corporate tax. The legislation also put forward proposals to increase tax penalties, limit reconciliation with penalties, reduce transferred VAT, and remove some exemptions related to income tax, SCT, and VAT.
Additionally, the draft legislation proposes a 10% minimum tax on domestic companies and a 30% increase in the corporate tax rate for companies involved in public-private ventures.
