CIRCULAR Number 4 - Explanations Regarding The Amendment Introduced In The Incom

In addition to our Circular No. 88 concerning the re-determination of certain amounts stipulated in the Income Tax Law and the income tax withholding rates, our explanations regarding the amendment introduced in the Income Tax General Communique‚ Series No. 200, published in the Official Gazette dated 31.12.1996, numbered 22864, are provided below.

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CONCERNED ARTICLE                     PROVISION INTRODUCED 

SMALL FARMER EXEMPTION 
Article 13 in the Income Tax  Law     The criterion for annual sales 
                                      for the  applicability of 
                                      exemption on the  agricultural 
                                      gains of the small farmer has  
                                      been increased to TL 864 
                                      Million, to be applied on the 
                                      revenues earned during  
                                      calendar year 1996. 

EXEMPTION FOR IMMIGRANTS 
AND REFUGEES                      
Article 17 in the Income Tax  Law     Tax exemption applied on the 
                                      earnings and  revenues paid to 
                                      immigrants and refugees for 
                                      1997,  has been raised from TL 
                                      18  million to TL 31,100,000.  

EXEMPTION FOR REVENUES FROM 
IMMOVABLE CAPITAL 
Article 21 in the Income Tax Law      Applicable on the revenues
                                      earned in 1996, the  Exemption 
                                      for Revenues from Immovable 
                                      Capital has been raised from TL  
                                      24,000,000 to TL 41,400,000. 
                                      
FREE MEAL EXEMPTION 
Article 23/8 in the Income Tax Law    The exemption provided on the 
                                      cost of the  free meals 
                                      provided to the wage earners  
                                      has been raised from TL 200,000 
                                      to TL  300,000 daily. 

LUMPSUM EXPENSES IN 
AGRICULTURAL GAINS 
Article 53 in the Income Tax Law      Applicable on the income earned
                                      in 1996, the  total proceeds in 
                                      agricultural gains to be taxed 
                                      on lumpsum expense basis has  
                                      been raised from TL 1 billion 
                                      to TL 1,728,000,000. 


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CONCERNED ARTICLE                     PROVISION INTRODUCED 

LUMPSUM EXPENSE BASIS  
IN INDEPENDENT PROFESSIONAL EARNINGS
Article 68 In the Income Tax  Law     During the determination of the 
                                      earnings of  the Independent 
                                      Professionals in  1996, the 
                                      lumpsum expenses total has been  
                                      raised from TL 2 Million to TL 
                                      3,400,000.

EXEMPTIONS ON CAPITAL GAINS 
Repeated Article 80 in 
the Income Tax  Law                   Applicable on the gains earned 
                                      in  1997, the amount to be 
                                      exempted from tax in capital 
                                      gains has been raised from  TL 
                                      3,200,000 to TL 5,500,000.  

MINIMUM AGRICULTURAL EARNINGS 
Article 112 in the Income Tax Law     Applicable on the gains earned 
                                      in 1997,  the  amount that does
                                      not require any explanations 
                                      for minimum agricultural 
                                      earnings has been raised from 
                                      TL 2 million to TL 3,400,000.   
            
Please do not hesitate to contact us if you need any additional information regarding the matters discussed here.



The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.



For further information contact Mustafa Camlica, Tax Manager on tel: +90 212 232 1210, fax: +90 212 230 8231, or e-mail mustafa.camlica@arthurandersen.com or enter a text search 'Arthur Andersen' and 'Business Monitor'.