Numara : 1
Tarih : 18.1.2019

TAX NEWS NO: 2019/1

January 28, 2019

Subject: The Law Regarding the Amendments to Tax Laws, Certain Laws and Statutory Decrees numbered 7161.


"The Law Regarding the Amendments to Tax Laws, Certain Laws and Statutory Decrees numbered 7161" has been published in the Official Gazette dated 18 January 2019.


This Tax Bulletin summarizes the relevant Law’s regulations concerning the amendments to tax laws.


A) Inclusion of foreign exchange differences to the components included in VAT Base


As known, there was no explicit provision in the Value Added Tax Law stating that the exchange differences are among the components included in VAT Base. This situation led to controversies between the Revenue Administration and taxpayers.


Through an amendment on the Article 24 of the VAT Law with Article 18 of Law no. 7161, "foreign exchange differences" have been added to the components included in the VAT base.


As a result of the abovementioned amendment, for the transactions (i) materialized in foreign currency or indexed to a foreign currency, (ii) in which exchange differences arise due to the fact that the price is fully or partially collected afterwards, it is now unquestionable that the derived F/X difference will be a component of VAT base either for the buyer or seller side.


B) Other amendments


  • The additional tax incentives (additional investment contribution rate and corporate income tax reduction) which have been applied in 2017 and 2018 for investments made by companies having investment incentive certificates will also be implemented in 2019. 
  • The implementation period of refunding the VAT incurred which have been applied in 2017 and 2018 for building/construction expenditures related to the manufacturing industry investments, has been extended to 2019.

  • Banking and insurance transaction tax exemption is introduced for the gains of asset financing funds related to their transactions in "capital markets".

  • Good deliveries to and services performed for the organized industrial zones and small industrial sites or their economic enterprises, regarding the construction of renewable and other energy facilities, are exempted from VAT.

  • Turnip juice, milky drinks which are aromatized in accordance with the Turkish Food Codex, drinks regarded as baby follow-on milk have been removed from the scope of special consumption tax.

  • The delivery of books and periodical publications by the publishers entitled with a publishing certificate given by the Ministry of Culture and Tourism is exempted from VAT beginning from 1 February 2019.



Yours sincerely,

Deloitte Turkey


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