February 2025 Financial Agenda
Dear Readers,
One of the important topics on our tax agenda in March is the submission of income tax returns for the year 2024. Unless there is a postponement, income tax returns must be submitted by April 2, the first installment of the accrued taxes must be paid by April 2, and the second installment must be paid by the end of July.
Undoubtedly, the most significant topic on our 2024 agenda was inflation adjustment. As is known, the application of inflation adjustment ends if the increase in the relevant price index (PPI - Producer Price Index) is less than 100% in the last three accounting periods, including the current period, and less than 10% in the current accounting period. Additionally, the Ministry of Treasury and Finance is authorized to determine whether inflation adjustments will be applied to financial statements based on taxpayer or professional groups or the total assets or turnovers of taxpayers and whether they will be adjusted during provisional tax periods.
With the General Communiqué No. 582 on the Tax Procedure Law, the Ministry has deemed it appropriate for all taxpayers within the scope (excluding those engaged in the continuous purchase, sale, and production of processed gold and silver) not to apply inflation adjustment during the first, second, and third provisional tax periods of the 2025 fiscal period. Taxpayers who have been assigned a special accounting period will also not apply inflation adjustment in the provisional tax periods for the accounting period that begins within the 2025 calendar year. In this context, balance sheets will not be attached to the provisional income/corporate tax returns to be submitted for periods where inflation adjustment is deemed unnecessary.
On the other hand, the authority granted to the Ministry is limited to provisional tax periods. Unless there is a contrary legal regulation, inflation adjustment will be applied at the end of the 2025 fiscal period.
On this occasion, we hope that our March bulletin will be beneficial to all our readers and colleagues.
Best regards,
M.Emek KURT
Partner / Tax
BDO İstanbul Office
CERTAIN WITHHOLDING TAX RATES HAVE BEEN INCREASED
With Presidential Decree No. 9487, amendments have been made to the Council of Ministers Decree No. 10731, dated 27/07/2006, which determines the withholding tax rates applicable to certain earnings and revenues under Provisional Article 67 of the Income Tax Law.
- A 15% withholding tax will be applied to earnings derived from investment fund participation certificates, excluding those obtained from equity-intensive funds and participation shares of venture capital investment funds and real estate investment funds held for more than two years.
- As of 01/02/2025, the withholding tax rates have been increased for deposits converted into Turkish Lira at the conversion rate from foreign currency-denominated term deposit/participation accounts, gold-denominated deposit/participation fund accounts, and exchange-protected term deposit/participation accounts that are newly opened or renewed.
- As of 01/02/2025, the withholding tax rates have been increased for interest and profit share income derived from newly opened or renewed Turkish Lira deposit/participation accounts.
You can review our Bulletin for the details.
THE RESTRICTION ON THE USE OF TURKISH LIRA CASH LOANS BY COMPANIES SUBJECT TO INDEPENDENT AUDIT HAS BEEN LIFTED
With the Banking Regulation and Supervision Agency (BDDK) Decision No. 10265, dated 07/07/2022, companies that are mandatorily subject to independent audit under Decree-Law No. 660 and related regulations were previously restricted from obtaining new Turkish Lira (TRY) commercial cash loans if:
- Their foreign currency (FX) cash assets exceeded 15 million Turkish Liras in TRY equivalent at the time of the loan application, and
- Their FX cash assets exceeded 10% of either their total assets or their net sales revenue for the past year, whichever was higher, based on their most recent financial statements.
With the BDDK Decision No. 11145, dated 06/02/2025, the relevant regulations governing this restriction have been repealed, effectively lifting this limitation.
Accordingly, as of 06/02/2025, independent audit-obligated companies will no longer be subject to these specific conditions when applying for TRY loans under the previous BDDK regulations.
Since this restriction did not apply to companies not subject to independent audit, no changes have been made for such companies.
Please click here to access the Decision.
You can review our Bulletin for the details.
COMMUNIQUÉ ON THE ELECTRONIC KEEPING OF COMMERCIAL BOOKS NOT RELATED TO THE COMPANY'S ACCOUNTING HAS BEEN PUBLISHED
The Communiqué on the Electronic Keeping of Commercial Books Not Related to the Company's Accounting was published in the Official Gazette No. 32813, dated 14/02/2025. With this regulation, companies can now keep and store all commercial books specified in the Turkish Commercial Code and the Tax Procedure Law in electronic format.
The communiqué regulates the creation, maintenance, storage, and submission of commercial books not related to accounting for partnerships (collective and limited partnerships), jointstock companies, limited liability companies, and cooperatives (Trade Companies). The books covered under this communiqué include, share ledger, board of directors resolution book, managers' resolution book, general assembly meeting and negotiation book.
The communiqué will come into effect on 01/07/2025.
You can review our Bulletin for the details.
NO INFLATION ADJUSTMENT WILL BE APPLIED IN THE PROVISIONAL CORPORATE INCOME TAX PERIODS OF 2025
With the Tax Procedure Law General Communiqué No. 582, published in the Official Gazette No. 32814, dated 15/02/2025, the following determinations and explanations have been made:
- All taxpayers within the scope (except those engaged in the continuous trading and processing of gold and silver) will not apply inflation adjustment in the provisional tax periods of 2025.
- All taxpayers within the scope must apply inflation adjustment to their balance sheets as of the end of the 2024 fiscal period.
- Taxpayers engaged in the continuous trading and processing of gold and silver will continue to apply inflation adjustment at the end of each provisional tax period and year end.
You can review our Bulletin for the details.
CASH REFUND APPLICATION FOR TRANSACTIONS SUBJECT TO A REDUCED VAT RATE HAS BEEN TERMINATED AS OF MARCH 1, 2025
With the VAT Communiqué No. 54, published in the Official Gazette No. 32456, dated 27/02/2025, the following determinations and explanations have been made:
- As of 01/03/2025, the cash refund application for transactions subject to a reduced VAT rate has been terminated within the same year.
- Refunds for transactions subject to a reduced VAT rate will now be carried out as offset refunds within the same year and as cash or offset refunds in the following year.
- The VAT exemption for social content creators and mobile app developers has been expanded. As of 01/01/2024, earnings from services such as individual courses, training, data processing and development, and product promotion provided through the internet or other electronic platforms are now included within the scope of the exemption.
- The VAT General Implementation Communiqué has been updated to state that no VAT will be calculated on the supply of goods and services subject to taxation under Article 20/B of the Income Tax Law, in accordance with Article 17/4-a of the VAT Law.
You can review our Bulletin for the details.
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