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Is the VAT rate of a guitar course 8%?

There is a taxpayer who sells guitars online and gives guitar education in his music school. What is the VAT rate he is going to write when drawing out an invoice on the guitar education?

 

If the education is under the governance of the Ministry of National Education, the VAT rate must be 8%. If not, it must be 18%.


Source: İSMMMO
Legal Notice: The information in this article is intended for information purposes only. It is not intended for professional information purposes specific to a person or an institution. Every institution has different requirements because of its own circumstances even though they bear a resemblance to each other. Consequently, it is your interest to consult on an expert before taking a decision based on information stated in this article and putting into practice. Neither Karen Audit nor related person or institutions are not responsible for any damages or losses that might occur in consequence of the use of the information in this article by private or formal, real or legal person and institutions.


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What steps to follow if the exports which are not accepted by the buyer are not returned physically?

There is an export company selling mines. During the delivery, some goods were not accepted by the receiver but they also can not be returned. What kind of a document the receiver can draft to reduce its debt to us, which would also reduce our receivables?
(18.12.2018)

There is nothing to do for the goods that are not returned. There should be a legal transaction for the export price.

 


Source :ISMMMO
Legal Notice: The information in this article is intended for information purposes only. It is not intended for professional information purposes specific to a person or an institution. Every institution has different requirements because of its own circumstances even though they bear a resemblance to each other. Consequently, it is your interest to consult on an expert before taking a decision based on information stated in this article and putting into practice. Neither KarenAudit nor related person or institutions are not responsible for any damages or losses that might occur in consequence of the use of the information in this article by private or formal, real or legal person and institutions.


 

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What are the obligations of board members of an incorporated company for tax debt?

…There is an INCORPORATED company that has a capital of TRY 900.000 and is taken over in July, 2015. TRY 899.999 of this capital belongs to a partner and TRY 1 belongs to the other. The company hasn’t operated since 2015. The principal partner has power of attorney. The shareholder is the vice chairman but he doesn’t have power of attorney. They have debts to the Tax Authority and SSI from previous period. Board of directors had to be renewed 3 years ago. What are the rates of governments debts for these partners? If the shareholder is a partner on paper and wants to transder his shares to the principal partners, what steps he should follow? What will be the situation of debt payment if the partnership ends?
(18.12.2018)

 

The partners are responsible for the capital they committed to the company. So the authorized member is responsible for representation. We can pay regard to the principal of joint liability within this regard. The responsibilities of the shareholder are limited, so it is possible for the him to leave the company by transferring his shares. My advice is to make the sale in a notary, take the decision of becoming a single-shareholder joint stock company  and register it. Termination of the partnership does not end the board membership. So the board should make a decision and establish a new board to exculpate his responsibilities.

 


Source :ISMMMO
Legal Notice: The information in this article is intended for information purposes only. It is not intended for professional information purposes specific to a person or an institution. Every institution has different requirements because of its own circumstances even though they bear a resemblance to each other. Consequently, it is your interest to consult on an expert before taking a decision based on information stated in this article and putting into practice. Neither KarenAudit nor related person or institutions are not responsible for any damages or losses that might occur in consequence of the use of the information in this article by private or formal, real or legal person and institutions.


 

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Is someone who took over the share of a company required to apply to Tax Authority for E-Tebligat again?

…We took over all the shares of a limited company which has a single partner. Shares are also taken over by a single person, meaning that the company passed in to other hand. Are we supposed to apply to the Tax Authority for a new E-tebligat? If so, is there a specific time period for it?
(18.12.2018)

 

Yes. The Tax Authority will make the necessary changes and procedures. The changes regarding the liability are supposed to be made within a month.

 


Source :ISMMMO
Legal Notice: The information in this article is intended for information purposes only. It is not intended for professional information purposes specific to a person or an institution. Every institution has different requirements because of its own circumstances even though they bear a resemblance to each other. Consequently, it is your interest to consult on an expert before taking a decision based on information stated in this article and putting into practice. Neither KarenAudit nor related person or institutions are not responsible for any damages or losses that might occur in consequence of the use of the information in this article by private or formal, real or legal person and institutions.


 

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What is the VAT rate for commercial vehicle sales until 31.12.2018?

…VAT rate for commercial vehicles is reduced to 1% until 31.12.2018.

During this period;

Question 1: Can I apply %18 VAT instead of 1% optionally?
Question 2: How much will the VAT rate be in 2019 for vehicles if I apply it as 1%?

 

 

1-No.
2-It will be 18%.

 


Yasal Uyarı: Bu yazıdaki bilgiler sadece genel bilgilendirme amacıyla verilmiştir. Kişi veya kuruma özel profesyonel bir bilgilendirme amacı güdülmemiştir. Konu ile benzerlik gösterse de her işletmenin kendi özel şartları nedeniyle farklı durumları olabilir. Bu nedenle, bu yazıda belirtilen bilgilerden yola çıkarak işletmenizi etkileyecek herhangi bir karar alıp uygulamaya geçmeden önce, uzmanına danışmanız menfaatiniz gereğidir. Karen Audit veya ilişkili olduğu kişi veya kurumlardan hiç biri, bu belgede yer alan bilgilerin özel veya resmi, gerçek veya tüzel kişi, kurum ve organizasyonlar tarafından kullanılması sonucunda ortaya çıkabilecek zarar veya ziyandan sorumlu değildir.


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Is it possible for the shareholders to lend money to a company in foreign currency?

Our incorporated company is an export company. It uses USD for all transactions including domestic purchases. The company is in urgent need of cash and its shareholders will lend it some money. They will lend money in USD since all transactions of the company are made in USD. Is it possible to lend money to the company in USD? Is there any regulation preventing this?
(18.12.2018)

 

The money can be borrowed in TRY or foreign currency. However,there will be an exchange rate valuation at the end of provisional tav periods for foreign currency borrowings.

 


Yasal Uyarı: Bu yazıdaki bilgiler sadece genel bilgilendirme amacıyla verilmiştir. Kişi veya kuruma özel profesyonel bir bilgilendirme amacı güdülmemiştir. Konu ile benzerlik gösterse de her işletmenin kendi özel şartları nedeniyle farklı durumları olabilir. Bu nedenle, bu yazıda belirtilen bilgilerden yola çıkarak işletmenizi etkileyecek herhangi bir karar alıp uygulamaya geçmeden önce, uzmanına danışmanız menfaatiniz gereğidir. Karen Audit veya ilişkili olduğu kişi veya kurumlardan hiç biri, bu belgede yer alan bilgilerin özel veya resmi, gerçek veya tüzel kişi, kurum ve organizasyonlar tarafından kullanılması sonucunda ortaya çıkabilecek zarar veya ziyandan sorumlu değildir.


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Can one use letters which are not in Turkish alphabet in company titles?

Can One Use Letters Which Are Not In Turkish Alphabet In Company Titles?

According to the communique about business names established in the Official Gazette numbered 28913 and dated 14.02.2014, now it is possible to use letters which are not included in Turkish Alphabet like W, X, Q in the root of the company title.

Before the enactment of New Turkish Commercial Code, the companies with foreign partners could use foreign letters in their company titles. However, companies consisting of Turkish shareholders couldn’t use those letters. This restriction was abrogated with this amendment.

Now, everyone can use letters that are not included in Turkish Alphabet in the root of the company title.

Moreover, on condition that the shareholders of a company were consisting of Turkish citizens, they couldn’t use foreign names corresponding in Turkish according to the previous communique (such as, White Tarım Co. Ltd.). Nevertheless, all of the companies might use foreign words in the company title with this amendment.

The amendments done with the communique and some points about the new implementation are indicated below.

1- Business Names;
One can designate business names without constraint only if the field of operation and the expressions related to the kind of Corporation is Turkish.

SAMPLES

  • Blue Sea Denizcilik Ltd. ŞTİ. (Proper)
  • Blue Sea Maritime Ltd. ŞTİ. (NOT proper. The sector name should be Turkish. There should be written ‘’Denizcilik’’ instead of ‘’Maritime’’.

2- It is not allowed to use information that might give false impressions in business names of the company.
The expressions in the business name that might give false impressions about the identity of the trader, the scale, importance and financial condition of an enterprise for the third parties cannot be used and contrary to facts.

3- The expressions in business names cannot be contrary to local legislation, implementation and values.
(3) The expressions in business names cannot be against public order, national interests and morals and tarnish cultural and historical values.

4- Some words used in business names are subject to approval of Council of Ministers.
Words that are “Türk(Turkish)”, “Türkiye(Turkey/Turkiye)”, “Cumhuriyet(Republic)” and “Milli(National)” should be used plain, simple and thorough with the approval of Council of Ministers.

In accordance with articles 41 and 42 of the Turkish Commercial Code, If these words are involved in the name or the surname of the real person that should be used in business name, then it will not be obligatory to get the approval of Council of Ministers.

5- At least one sector should be stated in the company title.
It is obligatory to state at least one sector in the title of corporations and limited companies. There shouldn’t be any abbreviations in the expressions about the field of operation.

6- Pay attention to the incorporation of Holdings…
There should be written “holding” in the title of corporations whose primary objective is incorporating into another enterprises.

7- Place names can be used, but country names are subject to approval.
Officially identified place names can be used in business names; however, it is obligatory to get an approval from the competent authorities of related countries in order to use country names.

8- It is forbidden to use the names of state institutions and organizations.
It is forbidden to use the names of state institutions and organizations, other national and international agencies or abbreviated names defining those institutions in business names. Nevertheless, state institutions and organizations are allowed to use their own names and abbreviations in business names of the companies which they operate or in which they have shares.

9-If the record of a company is cancelled in the Trade Registry, someone else might use that title 5 years later.
The title of a company which is cancelled in the Trade Registry cannot be used by another trader again, because he/she should wait 5 years from the date when the declaration regarding to the disenrollment is published in Turkey Trade Registry Gazette.

10- What is the condition of using a title registered previously?

  • If a business name is registered previously in a registry of commerce in Turkey, it cannot be registered without making a distinctive addendum in order to distinguish it from the previous one.
  • If a business name registered previously has the same addendum and the first expression indicating the field of operation with the newly-established company, it cannot be registered without making distinctive amendments within the scope of article 46 of the Turkish Commercial Code.

Sample-1: If a title called “A İnşaat Otomotiv Tekstil Sanayi ve Ticaret Anonim Şirketi” is registered previously, the title called “A İnşaat Tekstil Turizm Sanayi ve Ticaret Anonim Şirketi” cannot be registered without making a distinctive addendum.

  • If the two companied share the same addendum in their titles, but their first expressions indicating the field of operation are different, that title can be registered without making an addendum.

Sample-2: If a title called “B İnşaat Otomotiv Sanayi Anonim Şirketi” is registered previously, the title called “B Turizm İnşaat Sanayi Anonim Şirketi” can be registered without making an addendum.

  • If the two companies have the same expressions indicating company type in their titles, that title cannot be registered without making a distinctive addendum.

Sample-3: If a title called “C Turizm Limited Şirketi” is registered previously, a title called “C Turizm Anonim Şirketi” cannot be used without making a distinctive addendum.

______________________________________________________________________________________________
Source: The Communique about Business Names Established in the Official Gazette Numbered 28913 and Dated 14.02.2014 Date: 26 January 2017
Legal Notice: The information in this article is intended for information purposes only. It is not intended for professional information purposes specific to a person or an institution. Every institution has different requirements because of its own circumstances even though they bear a resemblance to each other. Consequently, it is your interest to consult on an expert before taking a decision based on information stated in this article and putting into practice. Neither MuhasebeNews nor related person or institutions are not responsible for any damages or losses that might occur in consequence of the use of the information in this article by private or formal, real or legal person and institutions.
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What Is The Tax Advantage While Issuing And Selling A Share During The Change Of Company Type?

If you would like to sell your Limited Company shares with profit, firstly change the company type from Limited to Corporation and then issue shares.

Subject: In the event of changing the “limited company” that has a partnership to a “Corporation”, the explanations about the taxation of the income gained through selling the shares are indicated below.

1- What is the legal basis of taxation of the incomes gained by selling the shares of Limited Company and Corporation?
The provision about the taxation of incomes gained through the selling the shares of Limited Company and Corporation with profit are stated in the duplicated entry 80 titled “Increment Value Income” of the Income Tax Law.

According to this article;
1.1- The income gained by selling of shares obtained through inheritance (non-controversial)(virtual-inheritance and donation) is not subject to tax. (Duplicated Entry 80/4 of the Income Tax Law)
1.2- The income gained through the selling of shares which belong to institutions with full obligation and kept more than 2 years is not subject to tax. (Duplicated Entry 80/1 of the Income Tax Law)
1.3- The incomes gained through the selling of rights and shares will be subject to tax as increment value income. (Duplicated Entry 80/4 of the Income Tax Law)

2- Issuing Corporation shares and interim certificate is crucial.
2.1-
 If a Corporation does not issue shares or interim certificate, there will not be any tax advantages.
2.2- If the shares are sold with profit 2 years later after the issue date, there will be no increment value income and no matter how much profit a person gains through the selling of these shares, there will be no taxation. ( Duplicated Entry 80/1 of the Income Tax Law)
2.3- If the shares are sold with profit within 2 years after the issue date, there will be increment value income and they will be subject to tax.

3- Limited Companies do not issue shares or interim certificate.
3.1- 
Limited Companies have no right to issue shares or interim certificate like Corporations do. Thus, if limited companies’ shares are sold with profit (no matter how many years go by), there will be increment value income and they will be subject to tax.
3.2- If the selling/the transfer of a limited company’s shares are sold via notary, it will inure.

4-If you change Limited Company to Corporation at first and then issue shares, you may have tax advantage.
In the event of transfer and demerger of a company (including partly demerger) within the scope of article 19 and 20 of the Corporate Tax Law, the date of acquisition of shares given to the shareholders or the company is the date of acquisition of the shares of the company, which sells these shares. (Communiqué 1 of the Corporate Tax – article 19.3.3)

Changing the type of the company is regarded as transfer; the acquisition date will be the date when the shares are obtained by means of changing of company’s type.
It means that if a limited company is changed to a Corporation, the acquisition date of the shares should be the acquisition date in the limited company.

That issue is stated in detail in a sample special notice about the subject.
 “In article 19 of the Corporate Tax Law numbered 5520;
(1) The conditions of the union about the enforcement of that law written below are regarded as transfer:
a) After the union, legal head office or business center of the defunct company and the united company should be in Turkey.
b) If the united company takes over the balance sheet value of the annulled company as a whole and it is recorded in its own balance-sheet.”

(2) There is a clause that changing the type of the company within the scope of conditions stated above is regarded as takeover.
In the event of turnover and demerger (including partly demerger) done within the scope of article 19 and 20 of the Corporate Tax Law in the section titled “date of acquisition of shares received through turnover and demerger 19.3.3” of the communiqué on Corporate Tax numbered 1, the date of acquisition of the shares should be regarded as the acquisition date of the shares of the disunited company.

On the other hand, it is decided that incomes gained by the transfer of real estates and other capital market instruments should be regarded as “Increment Value Income” (excluding voluntary acquired ones and shares kept more than 2 years and belonging to fully responsible companies), which is stated in the first sub clause of the first clause of duplicated entry 80 of the Income Tax numbered 193. Furthermore, in the second clause of the same article, “sellout” means selling the properties and rights indicated in this article, voluntary takeover and transfer, exchanging, interchange, nationalization, socialization, using as a capital in commercial companies.

5-  SUMMARY
In order to benefit from tax advantage for increment value income gained through the selling of shares;

5.1- If you keep your shares in Limited Company more than 2 years and satisfy the criterion stated in article 19 and 20 of the Corporate Tax Law,
5.2- Change Limited Company to Corporation by changing its type.
5.3- After the change, issue an interim certificate and share.
5.4- If the criterion stated above is satisfied, you do not have to pay tax for the income gained through the selling of shares.

Source:
1- Article 19 and 20 of the Corporate Tax Law numbered 5520
2- Communiqué 1 of Corporate Tax Law numbered 5520
3- Duplicated Entry 80 of Income Tax Law
4- General Communiqué of the Income Tax Law numbered 232

Ali Karakuş
15.04.2017,
İstanbul

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Have You Got Any Ideas About R&D Design Discount?

1- HAVE YOU GOT ANY IDEAS ABOUT R&D DESIGN DISCOUNT?
As you know, R&D centers may manage design projects along with R&D projects.

As a result of that, R&D centers may take advantage of Corporate Tax Design Discount as well as support elements being in the law no. 5746.

On the other hand, now that design centers may merely carry out design projects, they may only take advantage of design discount as Corporate Tax Pile.

The aim here is making use of support elements and stimulants at maximum level by means of obeying the specified rules

In recent years, the government gives multi-directional support for R&D projects. The companies which would like to do R&D are provided some opportunities like tax exceptions and cuts, SSI premium support, grants and long-term and low interest rate loan. If establishments have any projects in these directions, it will be helpful for them to go through the regulations in order to benefit from these supports.


Güneri GÖZÜAÇIK –CPA

Modern YMM – İstanbul

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