With the Additional Tax Law No. 7456 dated July 15, 2023, Published in the Official Gazette, Introduced Some Additional Taxes; Some Tax Rates were Increased and Some Tax Exceptions were Abolished; Some Additional Taxes were Introduced.

You Can Find the Relevant Regulations Below:

1.ADDITIONAL MOTOR VEHICLE TAX (MTV)

Subject of the tax

According to the tariffs (I), (I/A), (II) and (IV) contained in the 5th, 6th and provisional 8th articles of the Motor Vehicle Tax Law and

• vehicles registered and registered in the relevant registry on the date of publication of this Law (15.7.2023) with
• vehicles that are registered previously and will be registered in the relevant registries for the first time from the date of publication of this Law until 31/12/2023, for a one-time basis, it is subject to additional motor vehicle tax equal to the amount of motor vehicle tax accrued for October 2023.

Exemptions of Supplementary MTV

The exceptions contained in Article 4 of Law No. 197 are also applied for Supplementary (additional) motor vehicle tax.

Due to earthquakes in the province of Kahramanmaraş on the date of the 6/2/2023, Ministry of Treasury and Finance, within the scope of Article 15 of the Tax Procedure Law No. 213 dated 4/1/1961 declared a state of force majeure in places; vehicles already registered and will be registered as of the date of the earthquake, destroyed due to the earthquake and vehicles registered and registered as of the date of the earthquake, vehicles belonging to the owners of buildings destroyed or severely or moderately damaged due to the earthquake, vehicles that became unusable due to severe damage in earthquakes, 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.

Paid Additional MTV Payment Time

Additional motor vehicle tax on vehicles that have been registered and will be registered in the relevant registers on the date of publication of this Law will be paid in two equal installments; a- the first installment until the end of the month(August) following the month of publication of

this Law;

• the second installment will be until the end of November 2023;
• additional motor vehicle tax related to vehicles that are already registered and will be registered in the relevant registries for the first time between the publication date of this Law and the date of 31/12/2023, shall be paid after the purchase together with the regular motor vehicle tax of these vehicles.Exit from Additional MTV Liability

The provisions of Article 13 of Law No. 197 shall also be applied to additional motor vehicle tax. The additional motor vehicle tax cannot be evaded or postponed through the withdrawal from traffic, scrapping the vehicle or moving abroad and due to registration closure process.

2-RECOVERY PARTICIPATION SHARE(TAX ON BAGS ETC) INCREASED

From the products included in the list (1) attached to the Environmental Law No. 2872 placed on the domestic market, recovery participation fee is collected from the points of sale for bags, from those who put them on the market / importers for other products in the amount specified in this list. The amounts included in this list are applied by increasing the revaluation rate determined and announced in accordance with the provisions of repeated Article 298 of the Tax Procedure Law dated 4/1/1961 and numbered 213 in relation to the previous year every year, effective from the beginning of the calendar year. While the President of the Republic is authorized to increase the amounts included in this list or determined by applying the revaluation rate in accordance with this paragraph by up to half, by Law No. 7456, he is authorized to increase these amounts by up to twice or reduce them by up to half.

3-THE VAT EXEMPTION APPLIED IN THE SALE OF REAL ESTATE HAS BEEN ABOLISHED

The phrase “subsidiary shares and immovables” in the first paragraph of paragraph (r) of paragraph

(4) of Article 17 of the Value Added Tax Law has been changed to “subsidiary shares”, and the phrases “immovable and” in the second and fourth paragraphs have been removed from the text of the article. Thus, the VAT exemption applied to the sales of Immovables has been abolished as of 15.7.2023. However, with Article 8 of Law No. 7456, Temporary Article 43 introduced into the VAT Law has been added and the Law establishing this article for real estate assets of institutions before the effective date of this temporary article 43 has been linked to the provision that the provisions of article 17 (4) of the VAT Law will be applied before the amendment to paragraph (r).

4-DELIVERIES AND SERVICES MADE TO PROFESSIONAL ORGANIZATIONS UNDER THE AUTHORITY OF THE PUBLIC INSTITUTION DUE TO THE CONSTRUCTION OF HOUSES TO BE DONATED TO DISASTER VICTIMS WERE EXCLUDED FROM THE VALUE ADDED TAX UNTIL 31/12/2024

With the temporary article 44 added to the VAT Law, ‘Deliveries and services made to professional organizations as public institutions due to the construction of houses to be donated to earthquake victims within the scope of the protocol signed with the Disaster and Emergency Management Presidency in places considered as disaster zones effective for general life due to earthquakes occurring on 6/2/2023 have been kept exempt of value added tax until 31/12/2024’.

Taxes incurred due to deliveries and services performed within this scope are deducted from the tax calculated on taxable transactions. Taxes that cannot be compensated by way of a discount are refunded upon the request of the taxpayer who makes transactions within the scope of the exemption in accordance with the provision of Article 32 of this Law.

The President is authorized to extend the period specified in the first paragraph up to one year; the Ministry of Treasury and Finance is authorized to define the deliveries and services that will fall within the scope of the exemption, to determine the procedures and principles related to the exemption and VAT refunding

5-ADDITIONAL SPECIAL CONSUMPTION TAX INCREASED

Article 12 of the Special Consumption Tax Law;

1. The subparagraph (a) of paragraph (2) has been amended as follows. “a) to increase the tax amounts of the goods included in the list numbered (I) or re-determined in accordance with paragraph numbered (5) of this article up to five times the maximum tax amount included in the said list or re-determined for each commodity, to reduce it to zero, to determine different amounts within these limits according to the types of goods, characteristics, places of use or type of importation,”

2. the phrase “to increase by half,” contained in subparagraph (b) of paragraph (2), “to come after the phrase ”included in this list or considered re-designated“, and the phrase ”included in the list for goods in the ruler (B) to come after the phrase “included” or considered re-designated" have been added.

3. The following paragraph has been added to the article.

“5. The amount of the latest fixed tax amounts included in the numbered list or the amount of the latest fixed tax determined by the President in relation to them shall be deemed to have been re- determined at the rate of change in the last six months in the domestic producer price index announced by the Turkish Statistical Institute, effective from the day of announcement of this change in January and July. In the tax amounts resulting from this calculation, the four digits after the comma are taken into account. The President of the Republic is authorized to determine the implementation periods in days or months, or to decide not to apply the amounts that are considered to have been re-determined based on the goods and months that he will determine.”

6-CHANGES MADE TO CORPORATE TAX EXEMPTIONS

Some Exceptions included in the first paragraph of Article 5 of the Corporate Tax Law have been Removed:

Some of the Exemptions Applied to Fund Earnings have been Removed

a) The phrase of “The income arising from the return of the participation shares to the fund’’ contained in the (a) subparagraph (3) of the subparagraph (a) has been amended as the phrase of “income arising from the return of participation shares to the fund and the appreciation gains resulting from the valuation of participation shares of these funds in accordance with Article 279 of the Tax Procedure Law No. 213” and "subparagraphs (4) and (5) of the same paragraph have been removed from the article’’, and the last sentence has been amended as follows: “Other mutual fund participation shares and dividends received from the shares of investment trusts cannot benefit from this exemption.” The amendment to this subparagraph entered into force on the date of publication in order to apply to the participation shares of the investment fund acquired from the date of publication of the Law No. 7456.

Thus, only the participation shares of the venture capital investment fund subject to full liability and the dividends received by venture capital investment trusts from the shares and the income arising from the return of the participation shares to the fund, as well as the appreciation gains resulting from the valuation of the participation shares of these funds within the scope of Article 279 of the Tax Procedure Law No. 213, remained within the scope of the exemption. In addition, the following two exemptions, which were included in the 4th and 5th paragraphs before the amendment, have also been removed:

‘’4) dividends received from other mutual fund participation shares subject to full liability, as well as income arising from the return of participation shares to the fund (except for gains from mutual funds with assets denominated in foreign currency and gold and other precious metals and capital market instruments based on them).’’