14.07.2021
- Taxation and declaration in case of transfer
In the transfers to be made in accordance with Article 19 of the Corporate Tax Law, only the profits of the annulled corporation until the transfer date will be taxed, and the profits arising from the merger will not be calculated and taxed.
The transfer date is the date on which the decision of the authorized board of the company regarding the transfer is registered in the Trade Registry.
The corporate tax return regarding the transfer will be submitted to the tax office to which the annulled corporation is affiliated within thirty days from the date of the announcement of the merger in the Trade Registry Gazette.
The declaration will be prepared and jointly signed by the annulled corporation and the merged corporation as of the date of transfer.
The income calculated as of the transfer date must be included in this declaration and taxed, since the income up to the transfer date is taxed. The income arising from the transactions after this date will belong to the transferee corporation.
In case the transfer is made within the period from the month in which the accounting period is closed to the end of the month in which the corporate tax return is submitted, the corporate tax return to be prepared for the previous accounting period of the annulled corporation will also be submitted together with the corporate declaration regarding the transfer.
The aforementioned declarations must also be signed jointly by the annulled corporation and the merging corporation and submitted to the tax office to which the annulled corporation is affiliated.
Example 1: (A) Ltd Company, of which accounting period is the calendar year, was transferred to (A) A.Ş. by changing its type on 4/6/2007. In this case, (A) Ltd Company’s tax return for the period between 1/1/2007 and 4/6/2007 must be submitted to the tax office to which the annulled corporation is affiliated, until the end of the working hours of 4/7/2007.
Example 2: In the event that (A) Ltd Company transforms into (A) A.Ş. on 11/2/2007, the declaration regarding the promissory period between 1/1/2007-11/2/2007 and the declaration regarding the 2006 accounting period of the annulled corporation (A) Ltd Company must be submitted to the tax office of the annulled corporation until the end of working hours on 13/3/2007.
The merged corporation must undertake to pay the tax liabilities accrued and to be incurred by the annulled corporation and to fulfill its other duties, with a letter of undertaking attached to the corporate tax return to be submitted by the annulled corporation due to the merger.
The largest property officer can also request collateral from the merged corporation in this regard. In the implementation of the Corporate Tax Law, the chief tax officer is the heads of the tax offices in the provinces where the head of the tax office is located, and the bookkeepers in the other provinces.
The statement of undertaking and the balance sheet and income statement regarding the transfer must be attached to the annexes of the declarations to be submitted.
On the other hand, if a corporate tax return is submitted for the same period due to the transfer process before the submission of the provisional tax return, a separate provisional tax return will not be submitted for this period.
Provisional taxes paid by the corporation, which became annulled due to the transfer, until the transfer date can be deducted from the corporate tax to be calculated over the earnings before the transfer to be taxed due to the transfer. If the amount that cannot be deducted remains, this amount will be deducted from the corporate tax of the merged corporation.
- Taxation and declaration in case of full split-off
In full split-off to be made pursuant to Article 19 of the Corporate Tax Law, only the profits of the annulled corporation until the date of division will be taxed within the framework of the following explanations; profits arising from the division will not be calculated and taxed.
The date of full split-off is the date when the decision of the authorized board of the company is registered in the Trade Registry.
The corporate tax return regarding the split-off transaction will be submitted to the tax office of the corporation that split up (divided) within thirty days following the announcement of the split-off in the Trade Registry Gazette.
The declaration will be prepared by the split corporation and the corporations that have taken over the assets of this corporation as of the date of the split-off, and will be given by signing jointly.
In order to be able to tax the income up to the split-off date, the income calculated as of the split date must be included in this declaration and taxed. Gains arising from transactions after this date will belong to the transferee corporations.
In case the split-off is made within the period from the month the accounting period is closed to the end of the month in which the corporate tax return is filed, the corporate tax return of the split corporation for the previous accounting period will also be submitted together with the corporate tax return for the split-off.
The said declaration must be signed jointly by the split corporation and the corporations that took over the assets of this corporation and must be submitted to the tax office to which the annulled corporation is affiliated.
Corporations that take over the assets of the split corporation will undertake to pay the tax liabilities accrued and to be incurred by the split corporation and to fulfill its other duties, and they will undertake with a letter of undertaking to be given in the annex of the corporate tax return to be submitted due to the split-off of the split corporation.
The largest property officer can also request collateral from the split corporation and the corporations that have taken over the assets of this corporation.
A copy of the split-off balance sheet and income statement, split-off agreement and the Trade Registry Office letter showing the new capital structure of the corporations that took over the split corporation’s assets will be attached to the split-off declaration.
If a corporate tax return is submitted for the same period due to full split-off transactions before the submission period of the provisional tax return, a separate provisional tax return will not be submitted for this period.
- Taxation in case of partial split-off and exchange of shares
Profits arising from partial split-off and share exchange transactions carried out in accordance with Article 19 of the Corporate Tax Law will not be calculated and taxed.
In partial split-off transactions, corporations that take over the assets of the split corporation will be jointly and severally liable for the tax debts accrued or to be incurred until the split-off date of the split corporation, limited to the precedent value of the assets they have taken over.
Source: Revenue Administration of Republic of Turkey – Translated by Karen Audit – The rights of this translation belong to KarenAudit and unauthorized use is prohibited.
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.
