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Turkey Planning Increased Tax Rate for Financial Sector, Retained Earnings Tax, and Other Tax Measures — Orbitax Tax News & Alerts

According to recent reports, Turkey's Ministry of Finance is currently finalizing plans for a number of tax measures. Some of the main measures include:

  • The introduction of a 22% tax rate for the financial sector (standard rate 20%);
  • The introduction of 1% tax on retained earnings that will be levied on profits not capitalized or distributed within two months of the annual tax return deadline;
  • A reduction in the capital gains exemption for immovable property held for at least two years from 75% to 50%;
  • The introduction of a VAT registration requirement for foreign suppliers of e-services to Turkish consumers; and
  • An increase in the third bracket individual income tax rate from 27% to 30%, resulting in brackets of 15%, 20%, 30%, and 35%.

The measures are expected to enter into force in 2018. Additional details will be published once available.