Changes made to the tax proposal

The 40-article proposalcontaining tax regulations was accepted by the Grand National Assembly of Turkey (TBMM) and becamelaw.

 

The deliberations for the Draft Law on Amendments to Tax Laws and Certain Other Laws were heldin theTBMM General Assembly. Following thedeliberations, the votingtook place.was selected.

 

The legislative proposal, consisting of a total of 40 articles,was accepted and enacted into law.

 

PROPERTY TAX

 

The motion, which envisions significant changesto the Property Tax Law, was also discussed.accepted during the negotiations. With the amendment made to Article 11 of the proposal, it is aimed to limit the high tax increases expected to arise in 2026 due to the square meter unit values of land and plots to be appraised in 2025. Theregulationaimstolimittheburden for both current and future taxpayers.while introducinga "double cap" on tax basesfor individuals, it also redefinesthe calculation methodsfor the2027–2029period.

 

With the new article addedto the legislative proposal, a permanent regulation changing the annual increase system in Article 29 of the Property Tax Lawis also included.With theregulation, a provision was introduced stating that building and land taxvalues will be increased in subsequent years at the "revaluation rate."The regulation also includes

 

provisions for credit-financed purchases.The difference in the tax advantage regarding the deduction of interest paid forreal estate rented out as housing will be reduced.The aim is to equalize the tax burden betweenpurchases made with and withoutloans.CHANGES ININCOME TAX

 

The proposal also includes regulations regarding income tax.REGULATION

 

With the amendmentto be made to the Income Tax Law No. 193,by re-incorporating the fourth provisional tax period into the system, the earnings of taxpayers subject to provisional taxwill be determined for the 3, 6, 9, and 12-monthperiods, andthe final quarter of the yearthe receipt of theprovisional tax returnwill beregulated.

 

With another amendment to be madeto the Income Tax Law, regarding the one-year holding exemption for funds whose portfolioconsists of at least 51 percent Borsa Istanbul stocks; the exemption regarding the portfolioat least 51 percent of the portfolio consists of BIST stocksand certainprivate funds with specified characteristics will not be subject tothe regulation. With the regulation, for those that do nottradeon TEFAS, are sold only to qualified investors, and whose portfThe use of exemptions by certain fundsthat do not have limitations will be prevented.

 

AUDIT OF PURCHASE AND SALE PRICES DECLARED IN TITLE DEEDS AND INCREASE OF PENALTIES

 

Theregulationwill ensure that vehicles registered in the name of investment monitoring and coordination presidencies,which were established in metropolitan cities to replace provincial administrations, are exempted from motor vehicle tax.

 

With theamendment made to the Law on Fees,title deedfees for real estatepurchases and sales will be calculated based on the declared value, provided it is not less than the property tax value, and theactualvalue.for declarations that do not reflect theactual value, the tax penalty to beapplied will be increased by onefold from the current 25percent.

 

FEES ON NEW AND USED VEHICLETRANSACTIONS ANDW

 

With the regulation included in the proposal, forthe first registration of new vehiclesandsecond-hand vehicle sales/transfertransactions, a proportional notary fee will be charged based on the sale price, provided it is not less than the minimum fixed fee.will be collected.

 

NEW ANNUAL CHARGES WILL BE COLLECTED

 

In the regulation, foroutpatient diagnosis and treatment private healthfacilities, dental clinics, veterinary practices, animal hospitals, precious metal activity authorization certificates, second-hand motor vehicle and real estate trade authorization certificates, and commercial aviation licenses, forthese, nAnnual feeswill be introduced, and certainlicense feeswillbe annualized.

 

FOUNDATION UNIVERSITIES FEE DETERMINATIONPRINCIPLES

 

With the amendment made to theHigher EducationLaw No. 2547, thefees at foundationuniversities will bestudent fees, the authority of the board of trustees to determine them is preserved, but regarding the updating of fees,the principles will be based on the current year's June annual producer price index increaseand the current year's June annual consumer price index increaseaverage, taking into account theYÖK (Council of Higher Education) principleswill be determined accordingto.

 

UEFA ORGANIZATIONS

 

With the regulation, deliveries and services related to UEFA and participants coming from abroad within the scope of the 2026 Europa League Final, 2027 Conference League Final, and 2032 European Championship will be temporarily exempted from VAT, income tax, and corporate tax. Deduction and refund of VATincurred within the scope of the exemptionwill be permitted.

 

In the Private Pension System (BES), the Presidentwill be able to increase the state contribution rate by up to 50 percent,or reduce it to zero.

 

BUDGET LAW NET DEBTUSAGE AMOUNT DETERMINED BY WILL INCREASE

 

With the provisional article added to the Law on the Regulation of Public Finance and Debt Management,due to the 2023 Kahramanmaraş-centeredearthquake expenditures and 2025 revenue-orientedbudget developments,the amount that has emergedwill be increased. To meet theadditional financing need that has arisen and to maintain the Treasury cash reserve at a certain level, thenet borrowing limit determined by the budget lawwill be increased.

 

Theincrease in borrowing amountsfor those working on their own behalf and account isIn cases where employees do not pay their premiums ontime and subsequently revive them by making a lump-sum payment,the revival premium rates for the suspendedperiodsare kept higher,including those covered by Law No. 5434,as well asborrowing premium rates.it will beraised to 45 percent.An increase will be made to the premium rates for long-term insurance branches within the scope of Article 81 of Law No. 5510. Furthermore, with the

 

regulation, the one-year premium support provided to young entrepreneurs will also be abolished.The upper limit forearnings subject to premiums

 

will beincreased.The limit will be increased from 7.5 timesto 9 times theminimum wage.

 

For those receiving income or pensions from the Social Security Institution (SGK) who have outstanding premiums and late payment penalties due to their own or their beneficiary's insurance status, these debtswill bededucted from the income/pensions granted.will not exceed 25 percent will be allowed to be deducted and collected in installments.

 

PUBLIC UNIVERSITY HOSPITALS RECEIVE ADDITIONAL BUDGET SUPPORT

 

Gdue to price contractagreements, the 2025 contractaccrual amounts remaining below the amountfor university hospitals' 2026 receivablesinstead of being offset from them, these written-off amounts Laborand Social Swill be covered by theMinistry of Securitybudget.It will be covered.

 

Regarding the Corporate Tax Lawprovisional article 2, for associations and foundationsregarding rental, securities, and interest income taxed via withholding, as well as income from revolving fundsin units affiliated with the Ministry of National Education, due to economicThe application period for the regulationregarding not being considered a businesswill be extended until December 31, 2035.

 

The UrbanTransformationPresidencywill be able to use its assets and real estate as collateralby showing that more than half of its capitalis owned by the public, it will be able to engage in domesticborrowing from banks.

 

Articles 1 and 2 of the proposal will be effective as of January 1, 2025,for taxation periods,income, and earningsto be applied to the tax returns to be filed regarding upon publication.on the date of publication; articles 7, 9, 13, 16, 21, 24, 25, 26, and 35 on January 1, 2026; article 14 at the beginning of the month following the publication of the proposal; articles 22, 23, and 27 at the beginning of January 2026; article 24, effective from January 1, 2025on the date of the proposal's publication, and the other articles on the date of publicationto enterinto force.