Turkey’s AKP Group Presidency presented “Draft Law on Amendments to Tax Laws and Certain Laws” to the Parliament on 16 July, 2024. This proposal, consisting of 53 articles, aims to make changes to the existing tax framework.

The draft aims to create a more effective and fair tax system, impacting pensions, departure fees, corporate taxes, revenue determination, and penalties. The proposed changes are expected to have wide-reaching implications for individuals and businesses alike.

Key Features of the Omnibus Bill

Global minimum corporate tax
A “Local and Global Minimum Complementary Corporate Tax” is introduced to align with OECD efforts, impacting multinational companies from 2024 onwards.

Domestic minimum corporate tax
A new rule ensures that the payable corporate tax is at least 10% of the pre-deduction and exemption tax base, promoting a fairer tax system.

Minimum pension increase
The minimum pension is set to increase to TRY 12,500, a 25% rise from the previous TRY 10,000. The provision will become effective from the July 2024 payment period.

Increased departure fee
The Departure Fee for leaving the country is raised from TRY 50  to TRY 500, with the potential to increase to TRY 1,500 under presidential authority. The fee can be adjusted annually based on the revaluation rate.

Daily revenue determination
The law proposes daily revenue determination for commercial or professional taxpayers, with monthly and annual revenues calculated based on daily inspections. Taxpayers will need to explain discrepancies exceeding 20% between declared and determined revenues.

Increase in penalties
Penalties under the Tax Procedure Law are increased to enhance deterrence. Proportionality remains crucial, with higher penalties for completely unregistered income earners.

Excluding tax bases from settlement
The draft law addresses public concerns by prohibiting settlements on the tax base, allowing only penalties to be negotiated.

Partial solution to carry forward VAT
The law proposes transferring unrelieved carry forward VAT to a special account after five years and allowing it to be written off as an expense based on an inspection within three years, marking an important shift in VAT handling.