The Turkish government has published a draft law containing tax changes for 2021. With respect to the proposed corporate tax rate cut reported earlier, the draft law amends the Corporate Income Tax Law to authorize the Turkish president to reduce the standard corporate tax rate by up to 5 percentage points (as low as 15%). In addition, the draft law provides for the introduction of a reduced corporate tax rate of 2% that would apply for five years for companies that list at least 20% of the shares on the Istanbul Stock exchange in an initial public offering. Certain company types are excluded, however, including:
- Banks;
- Leasing companies;
- Factoring companies;
- Financing companies;
- Payment and electronic money institutions;
- Authorized foreign exchange institutions;
- Asset management companies;
- Capital market institutions;
- Insurance and reinsurance companies; and
- Pension companies.
In addition to the corporate tax changes, the draft law also includes various changes to the Personal Income Tax law and the Value Added Tax Law, including measures to provide support in relation to the COVID-19 pandemic. Measures are also included for a voluntary disclosure scheme for certain assets until 30 June 2021, including cash, gold, foreign exchange, securities, or other capital market instruments held abroad, with disclosed amounts relieved from additional tax liabilities.