We would like to share the developments regarding certain tax implications that should be taken into account by taxpayers in 2022. 

Deadline Extended for Wealth Amnesty

• Application period for benefitting from Wealth Amnesty has been extended from 31.12.2021 to 30.06.2022.

• To benefit from the said regulation,
  • Cash, gold, foreign exchange, securities and other capital market assets abroad should be reported to banks and to intermediary institutions,
  • Cash, gold, foreign exchange, securities and other capital market instruments and immovables that are located in Turkey but not registered in the business records must be reported to the tax offices, by 30 June 2022.

• Within the scope of the regulation, no tax burden will be imposed for the assets brought to Turkey or registered and in case the assets included in the scope are brought to Turkey and registered under the conditions described above, there will not be any tax audit or tax assessment due to these assets.

Income Tax Tarif

• Income tax tariff to be applied for salaries and other income in 2022 is as follows:

• In 2022, after deducting the employee’s Social Security Institution premium (TRY 700,56) and unemployment insurance premium (TRY 50,04) from the monthly gross amount of the minimum salary (TRY 5.004), the salaries corresponding to the remaining amount (TRY 4.253,40) will be exempt from income tax. Employees earning more than the minimum salary will also benefit from this exemption, and in taxation of salary income exceeding the exempt amount, the income tax bracket amounts and rates at which the tax will be calculated will be determined by taking into account the amounts within the scope of the exemption.

Certain Withholding Tax Rates to be Applied

• Within the scope of Article 94 of the Income Tax Code and Articles 15 and 30 of the Corporate Tax Code, the withholding tax rate to be applied as of 22.12.2021 will be 10%, over the dividends distributed to;
  • Fully liable individual taxpayers,
  • Those who are not income or corporate taxpayers and who are exempt from these taxes,
  • Non-resident corporations, excluding those who receive dividends through a permanent establishment or a permanent representative in Turkey,
  • Real person limited taxpayers and
  • Non-resident taxpayers who are exempt from income and corporate taxes.

• The withholding tax rate to be applied on TRY deposit interests and dividends paid by participation banks with regards to TRY participation accounts, until 31.03.2022, would be as follows;
  • 5% for transactional accounts, call accounts and private current accounts and deposit accounts with a period of up to 6 months (including 6 months),
  • 3% for deposit accounts up to 1 year (including 1 year) and
  • 0% for accounts with a maturity of more than 1 year.

• 0% withholding tax rate will be applied over the interest and dividends obtained from the protected Turkish lira deposit and participation accounts opened as of 21.12.2021 and foreign currency deposit accounts and foreign currency participation fund accounts as of 20.12.2021 converted into Turkish lira at the conversion rate of the foreign currency.

• 0% income withholding tax will be applied to the interest and dividends obtained from the existing gold deposit accounts and participation fund accounts in gold as of 28.12.2021, and from the deposit and participation accounts converted into Turkish lira at the conversion price from the gold accounts against scrap gold and refined gold to be opened after this date.

Upper Limit of Stamp Tax

• Maximum stamp tax amount to be applied for each document has been determined as TRY 4.814.234,00 for the year 2022.

Valuable House Tax Obligation

• As the revaluation rate is determined as 36,20%, by increasing the 2021 values at the half (18,10%) of this  rate, the tax value limit for 2022 is calculated as TRY 6.173.000. For the properties with a tax value exceeding TRY 6.173.000 in 2022, the tax amounts to be declared and paid in 2023 shall be calculated according to the table below:

Irregularity and Special Irregularity Penalties

• Certain irregularity and special irregularity penalties to be imposed in 2022 pursuant to the Tax Procedure Code (“TPC”) have been determined as follows:
  • Regarding irregularity penalties under Article 352 of the TPC, the amounts to be paid by capital companies have been determined as TRY 320 for first degree irregularity penalty, TRY 170 for second degree irregularity penalty.
  • As per Article 353 of the TPC, special irregularity penalty amount for not issuing invoice, self-employed invoice has been determined as the 10% of the actual amount and no less than TRY 500; special irregularity penalty amount for not issuing delivery note, transport note etc. has been determined as TRY 500; total penalty amount within one calendar year cannot exceed TRY 250.000 for each type of document.
  • Special irregularity penalty to be imposed merchants under first category who do not provide electronic returns and notifications contrary to repeated Article 355 of the TPC has been determined as TRY 3.400.

Monetary Limits for Tax Disputes 

• Amounts regarding the finalization of the decisions of first instance tax courts regarding the cases to be initiated in 2022, application to the regional administrative court and appeal to Council of State against appeal decisions made in 2022 have been increased by the revaluation ratio and determined as follows:
  • Regarding the tax disputes in which the litigated amount is under TRY 9.000, the decisions of the first instance tax courts are final and cannot be appealed.
  • Regarding tax disputes in which the litigated amount exceeds TRY 9.000, the decisions of tax courts can be appealed before the Regional Administrative Court (“RAC”); however, if the litigated amount is not exceeding TRY 261.000, the decisions of RAC cannot be appealed.
  • Regarding tax disputes in which the litigated amount exceeds TRY 261.000, the decisions of RAC can be appealed before the Council of State. 
  • Hearings can be held upon request of one of the parties for the tax disputes in which the litigated amount exceeds TRY 77.000 for 2022 and actions for annulment.