Tax Reduction For Compliant Taxpayers are in Force

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Taxpayers who pay their personal income and/or corporate taxes regularly on time will be benefiting from 5% tax discount in 2018. Tax reduction will be applied to income tax and corporate tax returns that must be filed as of 1st January 2018; and discount amount will not exceed one million TRY.

Article 121 of Income Tax Law 193 had already been rearranged with the heading of “Tax reduction for Compliant Taxpayers” last year.

Now with the Income Tax General Communique (Serial No.301) that has been issued in Official Journal Numbered 30279, dated 23 December 2017, details of application became clearer..

BENEFITING TAX-PAYERS

Following taxpayers will be benefiting from the tax reduction

  • Tax-payer of business, agricultural and occupational earnings,
  • Taxpayers of corporate tax (Companies in finance, banking field, insurance and reassurance companies, pension companies, private pension funds are excluded)

DISCOUNT AMOUNT AND LIMIT

  • 5% of the taxes calculated on the basis of the annual income or corporate tax returns will be deducted from the taxes to be paid, provided that previous last years’ tax returns were submitted and taxes are paid within the legal period.
  • If the discount amount exceeds the tax amount to be paid in the year, remaining part may be set-off from the other taxes accrued upon declaration of tax-payer within following full one year after the date tax returns should be submitted. The amount that couldn’t be deducted within this period will not be refunded.
  • Amount to be deducted in this respect shall not exceed 1 million TRY. Council of Ministers is authorized to double the amount or cancel out, or bring it down to statutory rate.

BENEFITING CONDITIONS

  • In order to benefit from the discount, income or corporate tax returns that belong to the year the discount is applied in and to the previous two years must be submitted and the taxes accrued on the basis of these returns must be paid within the legal period.
  • The tax returns submitted for correction, and missing payments up to 10,00 TRY per tax returns are not considered as violation of above rule.
  • As of the date the tax return is submitted there shouldn’t be overdue debt exceeding 1.000,00 TRY.
  • Tax-payers who are committed for tax evasion within four calendar years back will not benefit from tax discount.
  • In case of benefiting unjustifiably, discounted amount will be collected back without imposing any loss of tax punishment.

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