TAX NEWS NO: 2015/2


March 16, 2015

The provisions of 'Law Proposal on Amendment to Certain Laws and Decree Laws ' (Draft) on corporate tax.

The "Law Proposal on Amendment to Certain Laws and Decree Laws" was submitted to the Chairmanship of the Grand National Assembly of Turkey on 9 March 2015.

The Article 11 of the Draft Law appends a new paragraph to the Article 10 of the Corporate Tax Code which is titled “Other Deductions”. As per the article, a deemed interest shall be calculated over the cash amounts contributed as subscribed capital (i.e. either during the incorporation of new companies or during the enhancement of the subscribed capital of the existing companies) to the equity companies and 50% of the interest calculated in such manner shall be deductible from the corporate tax base. The interest rate for the purposes of this calculation shall be the weighted interest rates used for commercial loans announced by the Central Bank of Turkey.

The amounts that could not be utilized due to insufficient corporate tax base shall be carried forward so as to be used in the subsequent periods. The incentive specified above shall start during the year in which incorporation or capital increase is executed and shall be available for utilization in the subsequent fiscal years as well.

The proposal, which aims to promote cash capital increases in Turkey, shall not cover banks and financing companies such as financial leasing companies, factoring, financing companies, asset leasing companies.

Yours sincerely,

Deloitte Turkey

Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity. Please see www.deloitte.com/about for a detailed description of the legal structure of Deloitte Touche Tohmatsu Limited and its member firms.

These materials and the information contained herein are provided by Deloitte Turkey and are-intended to provide general information on a particular subject or subjects and are not on exhaustive treatment of such subject(s).

Accordingly, the information in these materials is not intended to constitute accounting, tax, investment, consulting, or other professional advice or services. The information is not intended to be relied upon as the sole basis for any decision which may affect your personal finances or business, you consult a qualified professional adviser.

These materials and the information contained therein are provided as is, and Deloitte Turkey makes no express or implied representations or warranties regarding these materials or the information contained therein. Without limiting the foregoing, Deloitte Turkey does not warrant that the materials or information contained therein will be error-free or will meet any particular criteria of performance or quality.

Deloitte Turkey expressly disclaims all implied warranties, including, without limitation, warranties of merchantability, title, fitness for a particular purpose, non-infringement, compatibility, security and accuracy.

Your use of these materials and information contained therein is at your own risk, and you assume full responsibility and risk off loss resulting from the use thereof. Deloitte Turkey will not be liable for any special, indirect, incidental, consequential, or punitive damages or any other damages whatsoever, whether in an action of contract, statue, tort (including, without limitation, negligence), or otherwise, relating to the use of these materials or the information contained therein.

© 2015 Deloitte Global Services Limited