Tax cuts on the way for those bringing in foreign currency

A new series of practices will be put into effect to encourage the inflow of foreign currency into the country. Treasury and Finance Minister Mehmet Şimşek made a statement regarding the new reform package.

Emphasizing that they aim for more balanced, inclusive, and sustainable growth and permanent prosperity with the implemented economic program, Şimşek said that the program's priorities include permanently establishing price stability, supporting investments, employment, production, exports, and the competitive environment, improving the current account balance, and financing the budget with sustainable and healthy resources.

Şimşek pointed out that in this context, they will carry out structural reforms that increase production, competition, and efficiency while coordinating monetary, fiscal, and income policies, and explained that their work on policies specified in the Medium-Term Program in the field of taxation continues.

Stating that they have prioritized some of these efforts and that the matter will soon come to the Parliament's agenda, Şimşek spoke as follows:

"With the package, we foresee regulations to support exports and encourage the inflow of foreign currency into our country in order to contribute to the realization of economic program targets. To encourage the bringing of foreign currency into our country, we will increase the tax deduction and exemption rate applied to certain activities of our income and corporate tax payers abroad, provided that the earnings are brought into the country. In order to support exports, we will apply a 5-point corporate tax cut to the earnings of manufacturing and supplier exporters related to their activities. The practice will be valid for export activities carried out by manufacturing or supplier institutions through foreign trade capital companies or sectoral foreign trade companies based on an intermediary export contract."

Providing information on the details of the practice that will encourage the bringing of foreign currency into the country, Şimşek noted the following:

"We are increasing the 50 percent earnings exemption provided for income obtained from architecture, engineering, software, design, data processing, call services, as well as education and health activities offered as services abroad, to 80 percent, provided that the earnings are brought to Turkey. Thus, we are reducing the tax burden of our corporate tax payers to 5 percent for these earnings."

Şimşek also stated that they would exempt 50 percent of these earnings from income and corporate tax, provided that all dividends obtained from abroad by income and corporate tax payers are brought to Turkey.

News Source: 12punto