Inflation Accounting, Digital Tax Office, E-Viz, İdis and Current Developments

- Inflation adjustment will be applied in 2023. The Tax Procedure Law communiqué draft was published in mid-October

We have previously provided the details. In brief:

* The inflation adjustment for 2023 will have no impact on profit or loss, no additional tax will arise, only the balance sheet will be affected

* It will continue to be applied in 2024, and the inflation adjustment in 2024 may change the tax amount

* Balance sheet items will be divided into monetary and non-monetary items, and non-monetary items will be subject to inflation adjustment

* The domestic producer price index (Yi-ÜFE) will be used

* Consolidated methods can be used in the adjustment of inventories: Simple average method, inventory turnover rate method

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- As of October 1, the Corporate Tax rate increased to 25% (to be applied in the 3rd Provisional Tax period)

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- It has become mandatory to install a vehicle identification unit on company vehicles (leased or purchased) until the end of 2024. It will be installed on the pump nozzle apparatus at gas stations. The devices to be installed on the vehicles will be at the fuel tank cap entrance. Fuel purchases will be transmitted instantly to the Revenue Administration (GİB) system

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- Invoices regarding the charging service provided to electric vehicles must be reported instantly to the Revenue Administration (GİB)

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- The regulation regarding the possibility of disregarding foreign exchange loss in calculations of capital loss and being in a state of insolvency has been extended until the end of 2024

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- The Digital Tax Office application has been put into service

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- Tax Audit - Electronic Data Submission System (E-VİZ) for the Submission of E-Books and Documents has been launched. Books and documents requested by the tax auditor will be submitted electronically

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- The reinforcing bar monitoring system (İDİS) enters our lives in 2024

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- Tax-free computers and mobile phones for youth: The regulation is in a very narrow scope; it is provided only once to higher education students, for products under 9,500 TL, and up to a maximum of 5,500 TL

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Reminder

- Employment of individuals with disabilities. Businesses with 50 or more employees are required to employ 3% disabled personnel. A penalty of 13,190 TL (for the year 2023) will apply for each un-employed disabled person and for each month

- Residential rentals made for less than 100 days at a time are considered tourism-purposed rentals and require obtaining a permit from the Ministry of Tourism

- Employing Syrian nationals in the workplace: To employ a Syrian worker holding a temporary protection card (GKK), it is sufficient to have at least one Turkish personnel registered with the Social Security Institution (SSI) (normally 5 Turkish personnel are required for 1 foreigner)

- Social media earnings: Simply put, we can say YouTube revenues. There is no need to open a company or declare (up to 1.9 million TL). It is necessary to obtain an exemption certificate from the Tax Office according to repetitive article 20/B and open a special account at the bank. The bank will make a 15% deduction from the funds coming into this account and pay 85% to the account holder

- Break times given to employees (meal breaks, tea breaks, etc.) are not counted as working time

- Education and health expenses: Expenses made regarding the individual, spouse, and children can be shown as expenses on the condition that they are made in Turkey, the place from which the service is received is a income and corporate tax taxpayer, the expenditure documents are declared, and they do not exceed 10% of the declared income

- Life insurance premiums paid through banks for housing, vehicle, and consumer loans can also be shown as expenses in the income tax return

- The employer may terminate the employment contract without notification and compensation in the following cases

* The employee is absent for 2 consecutive working days without permission from the employer or without a justified reason

* The employee is absent on the working day following any holiday 2 times within 1 month

* The employee is absent for 3 working days in 1 month

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