On 7 April 2016, the Turkish Revenue Administration issued Corporate Tax Circular No. 40, which sets the rate for the notional interest deduction for 2015 at 14.6%. The law introducing the notional interest deduction was enacted in April 2015, and applies from 1 July 2015. Under the rules, companies are allowed a deduction of up to 50% of their deemed interest expense on cash capital increases registered with the Turkish Trade Registry. However, companies operating in the insurance, finance and banking sectors are not eligible for the deduction.
In determining the deduction, the rate is to be applied from the date of the cash capital increase until the end of the financial year. Any unused deduction may be carried forward indefinitely.