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What is the Corporate Tax Ratio of Merged Producing SMEs in Turkey?

07.09.2017

1- WHAT IS THE CORPORATE TAX RATIO?
Corporate tax ratio is 20% over company’s income.

2- WHO PAYS ADDITIONAL TAX AND FOR WHAT IS IT PAID?
Corporate taxpayers pay advance tax (limited in limited taxpayers with commercial incomes and incomes from agriculture)
2.1- In order to set off corporate tax of current taxation period
2.2- According to provisions stated in Corporate Tax Law,
2.3- In the ratio of corporate tax of current period.

The provisions applied to legally obligated institutions are also valid for limited taxpayers.

3- WHAT IS THE CORPORATE TAX RATIO OF MERGED PRODUCING SMES?
Council of Ministers has an authority to apply 75% discount for Corporate Tax on;
3.1- The incomes gained exclusively from productive activities in financial period ending at the date of merging and
3.2- Income gained from productive activities including the merging company’s financial period (when the merger takes place) of the small-and medium-scaled enterprises, dealing with containing and virtual productive activities for merging industrial registry certificate within the scope of article 19 of the Corporate Tax Law. Furthermore, it has authority to differentiate this discount ratio separately or together in respect for sectors, business branches, productivity areas, regions and financial periods or for institutions producing medium and high technology products or manufacturer and exporter. Additionally, the Ministry of Finance has an authority to determine rules and procedures related to enforcement of this sub clause.

Source: Corporate Tax Law

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How can a Person Pension from France?

05.09.2017

1- WHAT IS ADDITIONAL PENSION FUND RECEIVED FROM FRANCE?
In France, a person gets “additional pension fund” apart from Additional Pension Institutions’ retired pay on which they depend mandatorily during their businesses and on which their offices depend. Required age limit is the same as retired pay age limit.

2- IS IT POSSIBLE TO PUT WIDOW/WIDOWER ON SALARY IN CASE OF THE DEATH OF HIS/HER SPOUSE?
In case of the death of an insured, it is possible to put his/her spouse on salary from fifty-five years of age upward. If the spouse of an insured passed away before 01.07.1996, it is possible to put his/her spouse on salary from fifty years of age upward. If there is at least two dependent children or disablement, it does not require age limit.

3- WHAT SHOULD BE DONE IN ORDER TO RECEIVE ADDITIONAL PENSION FUND AND WIDOW’S PENSION?
In order to receive additional pension fund and widow’s pension; the insured or the rightholder should directly apply to Caisse de retraite complémentaire, which is a retirement institution when they are in France. Application forms can be provided from Turkish institutions or via internet.

***When Turkish citizens send their related documents to Turkish Consultancy, those documents are sent to the related French institutions.

Source: SSI

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What should be done in Case of a Deduction from Pension Received from Abroad?

04.09.2017

WHAT SHOULD BE DONE IN CASE OF A DEDUCTION FROM PENSION RECEIVED FROM ABROAD?
If a person, who resides in Turkey and receives pension from abroad, does not introduce the Life Certificate which is compulsory to introduce every year, there can be a deduction from his/her pension.

Vital record taken from the Civil Registry may take the place of the Life Certificate. There is no need to translate that document in addition.

Furthermore, one can request for help by applying to Provincial Directorate of Social Security Institution or Ministry of Labor and Social Security where the person resides.

In this application, it is sufficient to indicate
1- Insurance institution where the person receives his/her persion and insurance number,
2- Credentials.

Source: Ministry of Labor and Social Security

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Is It Possible for Foreign Independent Accountant and Financial Advisors to Carry on a Business in Turkey?

02.09.2017

If a foreign person is officially pursuing a career as an independent accountant and financial advisor,
1- He/she should have required qualifications for independent accountant and financial advisors who have Turkish citizenship,
2- They may get permission to carry on a career under the title of independent accountant and financial advisor in Turkey with reciprocity stipulation upon the proposal of Ministry of Finance with the consent of Prime Minister, in order to provide services via rights acquired in his/her own country that are within the scope of article 2 of the Law on independent accountant and financial advisor and certified councillorship numbered 3568. (Subjects that are within the scope of independent accountant and financial advisor)

Source: Independent Accountant and Financial Advisor and Certified Councillorship numbered 3568

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What is the Weekly Working Hours of Ship’s Crew?

01.09.2017

1- WHAT IS THE DAILY AND WEEKLY WORKING HOURS OF SHIP’S CREW?
Generally, daily and weekly working hours are 8 hours and 48 hours, respectively. 48-hour period should be used by dividing into equal parts within a week. If a shipman works 5 days within a week, it will be considered that he works 9,6 hours in a day. Hour of work means working hours or shift of a shipman.

2- IF A SHIPMAN WORKS 4 HOURS IN A WEEK, DOES HE HAVE A RIGHT TO HAVE OVERTIME PAY?
If a shipman works 4 hours in a week, he has no right to have overtime pay. Because, if a shipman exceeds weekly working hour (48 hours), he will have right to have overtime pay according to article 28 of the Maritime Labor Law numbered 854.

3- WHAT IS THE PROBATION PERIOD ACCORDING TO MARITIME LABOR LAW?
Probation period is one month in employment contracts of indefinite duration.

Source: Maritime Labor Law

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If an Insured Employee Works Full in February, How Should the Premiums Be Paid?

31.08.2017

In line with social security legislation, months are considered 30 days regardless of how many days there are in a month (28, 29, 30, 31).

If an insured employee works full in February, his/her premiums should be paid through 30 days regardless of how many days there are in a month. This situation is applied to February, as well.

On the other hand, if an insured employee does not work fully in a month, number of his/her premium days should be paid according to number of his/her service days.

Such as, if an insured employee has 3-day report in February, it will be considered that he/she has worked 25 days; because there are 28 days in February (for 2010).

Source: SSI

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If You Sell Your Real Estates Within 1 Year, You Will Pay VAT!

30.08.2017

Built offices and real estates will be exempted from VAT,
1-
When they are sold to a company which do not gain income in Turkey for the first time,
2- On condition that its sale value should be paid as foreign currency brought from abroad!!!
3- By means of foreign real persons who do not reside in Turkey, an office whose registered office and headquarter are not in Turkey or a permanent representative,

The ones, who bought an office or a real estate by taking advantage of VAT exemption in Turkey previously, will not be able to sell their real estates 1 year.

If they sell their office or real estate within 1 year, the tax (VAT), which was not paid when it was bought, will be received.

The properties, which are transferred to the Treasury ownership because of a suit brought by the Treasury, among the ones zoned for construction and then sold by the municipalities,  will be again transferred to persons as free of charge.

Source: General Meeting of TGNA (23.02.2017 Thursday)

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Who Prepares the Safety Practice Training and Exams?

29.08.2017

1 – WHO PREPARES THE EXAMS AT THE END OF SAFETY PRACTICE TRAININGS?
Turkish Ministry of Labor and Social Security prepares the exams after safety practice training.

2- HOW OFTEN ARE SAFETY PRACTICE EXAMS MADE?
General Directorate determines exam schedule (twice or three times a year).

3- IS IT POSSIBLE TO BE ON-SITE DOCTOR OR SAFETY PRACTICE WITH INSTRUMENT OF ACCESSION RECEIVED AT THE END OF SAFETY PRACTICE TRAINING?
Certificate of Safety Practice
; is given by the General Directorate after persons, who are graduated from engineering, architecture, technical staff, occupational health and safety training, do well in the safety practice exam.

Certificate of on-site doctor; is given to doctors doing well in the exam prepared at the end of on-site doctor training by the Ministry.

One cannot be on-site doctor or safety practice with instrument of accession.

4- WHO GIVES THE CERTIFICATE AFTER SAFETY PRACTICE TRAINING AND EXAMS?
Certificate is given by Turkish Ministry of Labor and Social Security General Directorate of Occupational Health and Safety.

5- IS THE CERTIFICATE OF SAFETY PRACTICE RECEIVED FROM UNION OF CHAMBERS OF TURKISH ARCHITECTS AND ENGINEERS BEFORE THE DATE OF 15.8.2009?
Safety practice was defined in the Labor Law numbered 4857 for the first time. As a result of that, certificates given by Turkish Ministry of Labor and Social Security are valid as of the date of 2004.

Source: Turkish Ministry of Labor and Social Security

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Activate Your Techno Park, R&D, Design Center Expenses!

28.08.2017

The importance of creditworthiness and R&D finance with regard to Techno park Companies!
I would like to quote from the meeting done between me and CEO of a company being active in Techno Park about our researches.

In the company, R&D expenses had been recorded in income statement for the financial year thus far. As a result of that, either the commercial profit of the company was too little or there was trading loss in financial statements. In the face of such a situation, the company making loss continuously couldn’t find any bank credit for its financial needs which meant its creditworthiness was destroyed.

As we have already said, it is also so crucial to see the creativity and creditworthiness of the source of finance.

If you have R&D Project (whether it is Techno park, R&D or design center or not), you should activate your expenses in order to obtain both tax advantage and financial advantage.

Source: Güneri GÖZÜAÇIK – CPA – Modern CPA – İstanbul

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Are Losses from Overseas Branch Subject to Discount?

25.08.2017

In article 3 of the Corporate Tax Law numbered 5520, it is clearly stated that “If institutions whose registered office or headquarter is abroad or in Turkey gain income either in Turkey or abroad, that income will be subject to tax in line with article 1 of the Law.”

Furthermore, in sub clause (h) of the first clause of article 5 titled “Exemptions” of the Corporate Tax Law, it was given a verdict that the incomes reverted to general operating accounts by gaining from overseas construction, maintenance, and fitter’s works are exempted from corporate tax.

On the other hand, in article 9 of the aforementioned law, “(1) in the determination of Corporate tax base, on condition that each amount related to each year in Corporate Tax Return should be presented separately, the losses stated below are subject to discount:
 
b) In Turkey, except the ones related to incomes exempted from Corporate Tax, on condition that they should remain in the same account more than 5 years, the
losses resulted from overseas activities will be subject to discount;
1) if they are reported by the institutions given the authority to audit every year according to that country’s regulations, including the losses of tax bases declared according to the laws of country where the institution is active,
2) If that report is submitted to a tax office in Turkey with its translated copy.
It is a statutory obligation to confirm the tax returns attached to report prepared by audit firms, balance sheet and income statement by fiscal authorities. If there is no audit firm where the institution is active, tax returns belonging to each year and its translated copy should be submitted to Turkish Embassy and Turkish Consulate in that country. If there is no
Turkish Embassy and Turkish Consulate in that country, those documents should be submitted to Turkish representations (ejustem generis) protecting Turkish benefits.

If overseas losses being subject to discount in Turkey are set off in related country or recorded as expense, the overseas income, which will be included in the declaration in Turkey, should be the amount before it is recorded as setoff or expense.”

Moreover, necessary explanations can be found in clause titled “9.3 setoff of overseas losses” of General Communique on Corporate Tax (serial number 1).

CONCLUSION:
According to provisions and explanations, the losses made from the activities of overseas branches can be subject to discount;
1- if they are not generated from overseas construction works,
2- if it is related to commercial earning and maintained and within the scope of sub clause (b) of the first clause of article 9 of the Corporate Tax Law. (Article 9/1b is indicated above)

Source: Revenue Administration

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