May was a very busy month due to the preparation and submission of both the 1st Provisional Income Tax Return for 2024 and the Corporate Income Tax Return for 2023 due to the extension.
Although it has no effect on the 2023 corporate income tax base, the 2023 year-end balance sheet was also prepared subject to inflation adjustment within the scope of TPL. In accordance with the regulation made by the Ministry of Treasury and Finance, although the conditions for inflation adjustment were met in the 1st provisional income tax period of 2024, taxpayers were not subjected to inflation adjustment. On the other hand, unless otherwise regulated by the Ministry of Treasury and Finance, inflation adjustment will be applied in the 2nd and 3rd provisional income tax periods of 2024 within the scope of TPL.
Due to the high inflation we are experiencing; the interest rates being applied have been increased. Accordingly, the monthly default interest rate was increased from 3.5% to 4.5%, the annual deferral interest rate from 36% to 48%, and the annual legal interest rate from 9% to 24%.
With the Presidential Decree issued in May, changes were made in the withholding tax rates to be applied to certain gains and revenues under the provisional Article 67 of the Income Tax Law. For example, the withholding tax rate on accounts to be opened at banks until 31/07/2024 (including this date) has been increased from 5% to 7.5% for accounts with maturities up to 6 months, from 3% to 5% for accounts with maturities up to 1 year (including 1 year), and from 0% to 2.5% for accounts with maturities longer than 1 year. On the other hand, a withholding tax of 7.5% (previously 0%) will be applied to the income and gains from mutual funds (excluding variable, mixed, eurobond, foreign borrowing, foreign, hedge funds and mutual funds with "foreign currency" in their titles) acquired between 01/05/2024 and 31/07/2024 (including this date). We would also like to point out that the withholding tax rate of 0% will continue to be applied to income and gains derived from equity- intensive funds, venture capital investment funds and real estate investment funds held for more than 2 years.
The regulations made in May are detailed in our Bulletins and Announcements.
I would like to take this opportunity to congratulate you in advance on Eid al-Adha and wish you a healthy day.
To view the full article, click 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.