Law No. 7456 introduced amendments to tax laws.

In the Official Gazette dated 15.07.2023 and numbered 32249, the Law No. 7456 "Law on Additional Motor Vehicles Tax and Amendments to Certain Laws and Decree Law No. 375 for the Compensation of Economic Losses Caused by the Earthquakes Occurred on 6/2/2023" was published.

The Law amends the following tax regulations.

1- Additional motor vehicles tax has been introduced for 2023.

Accordingly, the tax amounts listed in the tariffs numbered (I), (II), (IV) and (I/A) in the 5th, 6th, 6th, Provisional 8th articles of the Motor Vehicle Tax Law, which are "automobiles, capicabs, off-road vehicles and similar vehicles and motorcycles", "minibuses, panel vans and motor caravans, buses and similar vehicles, vans, trucks, tow trucks and similar vehicles", "airplanes and helicopters", will be increased from 15. 07.2023 and the vehicles that will be registered and registered for the first time in the relevant registries until 31/12/2023 will be subject to additional MTV.

Watercraft that are not covered by the Motor Vehicle Tax and vehicles to be registered and registered for the first time as of 01.01.2024 will not be subject to Additional Motor Vehicle Tax.

This additional Motor Vehicle Tax will be one-off. The additional tax amount to be paid is the amount of MTV accrued or to be accrued for 2023.

The additional motor vehicle tax will be paid by MTV taxpayers and real and legal persons who are the owners of the vehicles registered and registered for the first time in the relevant registries until 31/12/2023. The exemptions listed in Article 4 of the Motor Vehicle Tax Law will also apply to the additional tax.

In the places where a state of force majeure is declared by the Ministry of Treasury and Finance due to the earthquakes that occurred in Kahramanmaraş province on 6/2/2023; vehicles registered and registered as of the date of the earthquake, vehicles belonging to the owners of buildings that were destroyed or heavily or moderately damaged due to the earthquake, vehicles that were heavily damaged in earthquakes and became unusable, and vehicles belonging to taxpayers who lost their spouse or one of their first degree blood relatives due to the earthquake are exempt from additional motor vehicle tax.

The first installment of the additional motor vehicles tax related to the vehicles registered and registered in the relevant registries on 15.07.2023, the date of publication of the Law, will be paid in two equal installments until the end of the month following the month of publication of the Law, that is, until 31.08.2023, and the second installment until the end of November 2023.

The additional motor vehicles tax related to the vehicles that will be registered and registered for the first time in the relevant registries between 15.07.2023 and 31/12/2023, the date of publication of the Law, will be paid in advance together with the motor vehicles tax of these vehicles.

2- The corporate tax rate has been increased and it is regulated that the corporate tax rate will be reduced by 5 points for export earnings.

With the amendment made to Article 32, Paragraph 1 of the Corporate Tax Law, it has been regulated that corporate tax will be levied at a rate of 25% on corporate earnings and at a rate of 30% on corporate earnings of banks, companies within the scope of the Financial Leasing, Factoring, Financing and Savings Finance Companies Law No. 6361, electronic payment and money institutions, authorized foreign exchange institutions, asset management companies, capital market institutions, insurance and reinsurance companies and pension companies.

In addition, with the regulation in the 7th paragraph of the article, it is stipulated that the corporate tax rate will be applied with a 5 point discount to the earnings of exporting corporations exclusively from exports.

This regulation, starting from the declarations to be submitted as of 01.10.2023, will be applied to the earnings of the corporations obtained in 2023 and the following taxation periods, and the earnings of the corporations subject to the special accounting period will be applied to the earnings obtained in the special accounting period starting in the calendar year 2023 and the following taxation periods.

3- Exemptions regarding the gains arising from the sale of immovable properties held in the assets of corporations for at least two full years have been amended.

The exemption for 50% of the gains arising from the sale of immovable properties held in the assets of corporations for at least two full years has been abolished as of 15.7.2023.

It is regulated that the 50% exemption rate in subparagraph 5/1-(e) of Law No. 5520 shall be applied as 25% for the sales of immovable properties in the assets of the corporations before the effective date of this regulation as of the effective date of this article.

VAT exemption has been abolished for the transfers and deliveries realized through the sale of immovable properties that are included in the assets of corporations and held for at least two full years.

It has been regulated that the VAT exemption will continue in the transfers and deliveries realized through the sale of immovables that are included in the assets of the institutions and held for at least two full years before 15.07.2023, when this article entered into force.

4- The capitalization of immovable property as capital in the partial spin-off of corporations and the resulting tax exemption has been terminated.

As a result of the amendment made in Article 19 of the Corporate Tax Law, immovable properties are excluded from the scope of partial spin-off and therefore, the tax exemption application regarding the partial spin-off transaction has been terminated. This amendment will enter into force as of 01.01.2024.

5- The exemption in Article 5 of the Corporate Tax Law regarding the income derived from investment funds of corporations has been abolished.

With the amendment made to subparagraph a of Article 5 of the Corporate Tax Law, the exemption for the income derived by corporations from other investment funds, except for the exemption provided for the income derived from venture capital investment fund participation shares and shares of venture capital investment trusts, has been abolished.

Value increase gains arising from the valuation of the participation shares of the funds whose income is within the scope of the exemption within the scope of Article 279 of the Tax Procedure Law are included in the scope of the exemption.

6- Deliveries and services made to professional organizations in the nature of public institutions for the construction of houses to be donated to disaster victims in the earthquake region are exempted from VAT until 31/12/2024.

In the earthquake region, deliveries and services made to professional organizations in the nature of public institutions for the construction of houses to be donated to disaster victims within the scope of the protocol signed with the Disaster and Emergency Management Presidency are exempted from value added tax until 31.12.2024.

The taxes incurred due to the deliveries and services made within this scope will be deducted from the tax calculated on taxable transactions. Taxes that cannot be compensated through deduction will be refunded upon the request of the taxpayer making transactions within the scope of the exemption in accordance with Article 32 of the VAT Law.

7- The President of the Republic has been newly authorized to increase the lump sum tax amounts of the goods included in the list (I) annexed to the Special Consumption Tax Law.

With the amendments made in Article 12 of the Special Consumption Tax Law;

The President of the Republic is authorized to increase the lump sum tax amounts included in the list numbered (I) or redetermined pursuant to paragraph (5) of this article, up to five times the highest tax amount included in the list or deemed to be redetermined for each commodity, to reduce it to zero, and to determine different amounts within these limits according to the types of goods, their characteristics, places of use or the type of import.

The lump sum tax amounts in the list numbered (I) or the last lump sum tax amounts determined by the President shall be deemed to be re-determined in January and July at the rate of the change in the domestic producer price index announced by the Turkish Statistical Institute in the last six months, effective from the day of the announcement of this change.

8-The President of the Republic has been authorized to increase the amounts of recovery participation fees in the list numbered (1) attached to the Environmental Law No. 2872 by up to 2 times.

The phrase "to increase the amounts determined in this way up to half or" in the last sentence of the first paragraph of the first paragraph of the additional Article 11 of the Environmental Law No. 2872 has been amended as "to increase the amounts in this list or determined by applying the revaluation rate pursuant to this paragraph up to two times or up to half", and the President of the Republic has been authorized to increase the amounts of recovery participation fees in the list numbered (1) annexed to the Environmental Law by up to 2 times.