TAX NEWS NO: 2013/7

 May 30, 2013


The Law that also includes regulations on “Cash Repatriation” has entered into effect as of May 29, 2013

The Law on Amendment to Social Insurances and General Health Insurance Law and Certain Laws” has been promulgated in the Official Gazette dated 29 May 2013.

1. The Provisions of the Law No. 6486 Regarding the Introduction of Certain Assets to Economy

The article 13 of the Law numbered 6486 has added the temporary article 85 to the Income Tax Law concerning introduction of certain assets to economy. The law introduces certain tax benefits and reliefs for taxpayers who repatriate the following assets which are present abroad provided that they were possessed as of
15 April 2013;

  • Cash,
  • Gold,
  • Securities and other capital market instruments, and
  • Immovable properties.

In so doing, the law seeks to strengthen the capital structures of the corporations and to legitimize the unrecorded assets.

Principles of Implementation

In order to benefit from the provisions of the law, the following steps are required to be taken;

  • The concerning assets are required to be declared to banks, intermediary institutions or directly to the Tax Offices over the TL equivalent of their current market values not later than 31 July 2013
  • The asset declared within this context (i.e. with the exception of immovable properties), are required to be transferred to Turkey until the end of the month following the month in which declaration was made. 
  • The amounts declared in this manner shall be subject to taxation at a rate of 2%, which shall be required to be paid by the end of the month following the month in which the tax was assessed.
  • The taxpayers that keep statutory ledgers based on the provisions of the Tax Procedures Code are required to record these assets in the statutory ledgers until the end of the month following the month in which the declaration was made.
  • The concerning amounts shall be kept in a special fund under the shareholders’ equity by the taxpayers that keep their ledgers on balance sheet basis. These amounts shall be regarded as a component of the capital and shall by no means be allowed to be drawn out of the corporation.

3. Assurances Provided by the Law

As per the relevant provisions of the law, no tax inspection or assessment shall be conducted with respect to the assets declared within the context of the concerning law. In the event of tax inspections (not triggered by this law) covering the fiscal years prior to 1 January 2013, the amounts declared in this context shall be allowed to be deducted from the additional tax bases to be assessed in terms of Income Tax, Corporate Tax and VAT provided that the taxes assessed by the law are duly paid to the Tax Office.

Temporary Income/Corporate Tax Exemption Introduced by the Law

The law also provides a temporary income tax and corporate tax exemption. As such, the following income items will be exempted from income/corporate tax provided that they are transferred to Turkey not later than 31 December 2013;

  • Income derived from the disposal of the shares issued by non-resident entities,
  • Participation gains derived from non-resident entities,
  • Business profits derived through permanent establishments and permanent representatives,
  • Profits derived from the liquidation of non-resident entities.

Yours sincerely,
Deloitte Turkey

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