Through the promulgation of the Council of Ministers Decree No: 96/8955, in the Official Gazette dated December 29, 1996 and No. 22862, certain amounts specified in the Income Tax Law applicable in 1997, have been increased, meanwhile, certain withholding rates have been rearranged.
CONCERNED ARTICLE PROVISION INTRODUCED
PERSONAL DEDUCTION
Article 31 in the Income Tax Law Effective on the incomes
earned in 1997, the
amount of personal
deduction applied on wage
earners has been raised from TL
60,000 to TL 105,000 daily.
Accordingly, the monthly
personal deduction amount has
been re-determined as TL
3,150,000, and the annual
personal deduction amount has
been redetermined as TL
37,800,000.
MINIMUM INVESTMENT AMOUNT
Additional Article 2 in
the Income Tax Law The minimum investment amounts
to be taken into consideration
during investment allowance
applications on the Incentive
Certificates to be issued within
1996, have been raised from TL
12 Billion to TL 18 Billion in
commercial and industrial
investments, and from TL 2
Billion to TL 3 Billion in
agricultural investments.
LIMITS APPLICABLE DURING
THE NON-CONSOLIDATION OF
INCOME AND OPTIONAL CONSOLIDATION
Articles 86/87
of the Income Tax Law The applicable limits during the
non consolidation of income and
optional consolidation has been
raised from TL 900 Million to TL
1.5 Billion.
MINIMUM TAXATION ON GAINS
DERIVED FROM CHANCE GAMES IN
CASINOS
Additional Article 111 of the
Income Tax Law Effective on 1996, the minimum
tax amounts applicable, have
been determined as TL 400
million each for the first six
game tables, TL 300 million
monthly for each table exceeding
the said limit; and to TL 40
million for each game machine
for the first 60 game machines
and to TL 30 Million for each
game machine exceeding the said
limit.
INCOME TAX TARIFF
Article 103 of the Income Tax Law The following taxes will be
applied on the income earned in
1996 calendar year 1996
up to 500,000,000 25%
of 1,000,000,000 for 500,000,000 - TL
125,000,000; for the outstanding
amount - 30%
of 2,000,000,000 for TL 500,000,000 - TL
125,000,000 ; for the
outstanding amount - 35%
of 4,000,000,000 for TL 2,000,000,000 TL
625,000,000; for the outstanding
amount - 40%
of 8,000,000,000 for TL 4,000,000,000 TL
3,225,000,000; for the
outstanding amount - 45%
of TL 16,000,000,000 for TL 8,000,000,000 - TL
3,225,000,000 for the
outstanding amount - 50%
for above TL 16,000,000,000 for TL 16,000,000,000 - TL
7,225,000 for the outstanding
amount - 55%
Certain amendments have been introduced on Council of Ministers Decree No. 93/5148 regulating the withholding rates applicable as per Article 94 of the Income Tax Law. Accordingly, withholding will be applied at the following rates : 1. The withholding rates specified in paragraphs (a) and (c) of Article 5 of the Decree in question have been amended as follows (excluding Fund Share)
a) From payments made against the leasing of the properties and rights specified in Article 70 : 20 %
b) From payments of rent for the leasing of immovable properties belonging to cooperatives : 20 %
The above rates will gain applicability as of 01.01.1997.
2. The withholding rates applicable on the interests of bonds will be as follows (excluding Fund Share)
a) From the interests of Government Bonds : 12%
b) From the interests of Treasury Bills : 12%
c) From the income derived over the securities issued by the Mass Housing Administration and the Directorate of Public Partnership Administration : 12%
d) From the interest of bonds registered to name : 12%
e) From the interest of bonds issued to the bearer : 12%
f) From others : 12%
The above rates will be valid for the bonds issued after 01.01.1997.
3. The withholding rates applicable on the interests to be paid on the deposit accounts will be as follows (excluding Fund Share)
a) For interests accrued over the foreign exchange accounts and for the dividends paid by the private finance institutions over the foreign exchange participation accounts : 12%
b) For interests accrued over foreign exchange accounts opened to name : 12%
c) For interests accrued over foreign exchange accounts opened to the bearer : 12%
d) For others : 12%
The above rates will be valid for the interests to be paid for accounts to be opened as of 01.01.1997 or whose maturity dates will be renewed as of the said date. The wording used in the Council of Ministers Decree concerning the interests payable over demand deposits was somehow vague. During our contacts with the authorities from the Ministry of Finance, we have been informed that the new withholding rates will also be applicable for the demand deposits as of 01.01.1997.
The previous rates will be applicable on the interests to accrue prior to 01.01.1997.
4. Furthermore, the applicable withholding rates on accounts opened as of 01.01.1997 or whose maturity dates will be renewed as of the said date, and on the dividends to be paid on the time deposits, will be as follows:
a) For dividends paid to those who provide loans without interests : 12%
b) For dividends paid against profit and loss sharing certificates : 12%
c) For dividends paid against account for participation in profits and losses : 12%
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'.
