Draft Law Concerning the Increase of Tax Revenues

The draft law text has not been officially published yet.There are various provisions leaked to social media and numerous comments made regarding these provisions.Some of the provisions mentioned below may change, some may be removed from the draft, or new provisions that were not included on social media may be added.Although the subject is not yet finalized, we wanted to share it with you as it is current. - Minimum corporate income tax. 10% of corporate earnings before deductions and exemptions, or 2% of declared revenue (will negatively affect companies in a loss position and those utilizing deductions or exemptions).- Minimum personal income tax. 5% of revenue. Revenue tracking for self-employed individuals.- Taxation of e-commerce turnover through withholding.- Limiting the carry-forward period of VAT carried forward to 5 years.- Imposing an upper limit on the income tax exemption calculated over R&D personnel wages. A limit of 5 times the gross minimum wage for employees working in Technoparks and R&D centers.- Removal of the VAT exemption on purchases for R&D and design centers.- Imposing limitations on the corporate income tax exemption in Free Zones.- Increasing the departure fee for traveling abroad to 1,500 TRY.- Reducing the exemption (holding for 2 years) on the sale of affiliate shares by corporations from 75% to 25%. Abolishing this exemption for newly acquired affiliate shares.- Abolishing the exemption on capital gains from the sale of affiliate shares held by individuals for more than 2 years.Withholding tax on tips. Payment to employees through a 10% deduction on the condition that they are deposited into a separate bank account.- Penalty for using POS devices belonging to third parties. A penalty equal to 3 times the minimum wage upon detection.- Special irregularity penalty amounting to 10 times for service providers and private integrators acting contrary to Cash Register and POS device regulations.- If the end user reports to the tax administration within 5 days that an invoice was not issued, a 3-fold special irregularity penalty will be imposed on the seller.- Increasing whistleblowing rewards from 10% to 15%.- Taxation on crypto asset trading, at 0.03% (three-ten-thousandths) over the transaction amount.- 15% withholding tax on payments to motorcycle couriers. Requirement for motorcycle couriers to establish a company and file tax returns if their income exceeds a certain threshold.- Removal of the VAT exemption on healthcare services provided to foreigners.- Removal of the VAT exemption related to the Turkey Wealth Fund.- Removal of VAT exemptions in inward processing regime applications.- Inclusion of fire brigade pioneer vehicles within the scope of Special Consumption Tax (SCT).- Narrowing the scope of VAT exemptions applied to services rendered to maritime vessels at ports.- Narrowing the scope of VAT exemptions for defense industry procurement.- Narrowing the scope of VAT exemptions for exploration, enrichment, oil exploration activities, and pipeline transportation activities for mining companies.- Increasing administrative fines and applying interest to fines (rumored to have been postponed or removed).- Equalization of Bağ-Kur and SSI premium payment days (rumored to have been postponed or removed).- Removal of the VAT exemption for individuals with disabilities, extending the right utilized every 5 years to 10 years (rumored to have been postponed or removed).- The "where did you get this from" practice, known as wealth tax. A situation where there is a discrepancy of more than 20% between declared income and expenditures (rumored to have been postponed or removed).- Transition to actual sales value in title deed transactions (via valuation report) (rumored to have been postponed or removed).- Collection of real estate tax and title deed fees over the actual sales value (rumored to have been postponed or removed).- Abolishment of simplified taxation for small businesses in metropolitan cities (taxis, barbers, tailors, carpenters, etc.) (rumored to have been postponed or removed).- Taxation of gains derived from stock exchange trading transactions (up to 10%), collection of stock exchange transaction tax on stock exchange transactions (rumored to have been postponed or removed).- VAT increase on animal feed and fertilizer; currently, feed and fertilizer are exempt from VAT, with 10% VAT for feed and 20% VAT for fertilizer (rumored to have been postponed or removed).- 20% withholding tax on rental income. A special bank account will be opened, and rent payments will be made to this account. The bank will deduct 20% and pay the remainder to the landlord (rumored to have been postponed or removed).- Execution of rental contracts via e-Government (rumored to have been postponed or removed).- Removal of the tax exemption on books. Currently, books are exempt from VAT, introduction of a 10% VAT (rumored to have been postponed or removed)..