Tax Reform Proposal in Turkey

In the package that will be presented to the Grand National Assembly of Turkey, it is stated that there are regulatory recommendations for strengthening justice, introducing capital-oriented tax practices, and increasing the share of direct taxes.According to the Turkish media, part of the reform refers to the collection of the global minimum corporate tax, which has been introduced in more than 30 countries, including the countries of the European Union (EU), reports Mina, referring to Klix.ba.The increased profit tax will also be applied to the profit made by large investments.&quot;The profit tax rate is 25 percent for the real sector, 30 percent for banks and financial institutions, 20 percent for export companies, 23 percent for public companies, and 24 percent for manufacturers. Recommended profit tax rates on the wages within the build-manage-transfer model and public-private partnership projects will be 30 percent, instead of the previous 25 percent,&quot; according to Turkish media.Interestingly, the tax reform package also announced measures that would suppress the so-called informality in Turkish society, especially referring to non-declared employees.If the package of measures becomes law, the penalties for undeclared workers will be 1.5 times higher than the tax that has been reported and 4.5 times higher if smuggling is also defined in the whole case.In addition, the measures will also apply to fines for paying rent in cash.&quot;Tenants will be given special penalties for irregularity in the case of cash rent payments,&quot; the reform plan states.This new package of measures also treats the taxation of income from gratuities/tipping, in this case, exemption from VAT.&quot;Tips will be shown separately in the calculation, provided they remain within ten percent of the service fee. These revenues will be collected in a bank account and fully distributed to employees,&quot; said the Ministry of Finance of Turkey.

Tax Reform Proposal in Turkey

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