INTRODUCTION
According to the law which changes several regulations and Board of Ministers decisions regarding debt restructuring numbered 6824 and dated 23.02.2017, a number of changes have been made on stamp duty rates charged on construction agreements, vat exemption and title deed transfer fees. These decision and the amendments are published and came into force in the Official Gazette on 08.04.2017.
1. WHAT KIND OF CHANGES HAS BEEN MADE WITH THE LAW?
-With the law, certain construction agreements shall be subjected to stamp duty and Stamp Tax Law shall apply to such contracts signed after 08.04.2017.
– Reduction or increase in title deed fees is granted to the Council of Ministers.
– VAT on certain real estates has been revoked.
– Reduction of 5% on Income or Corporate Tax shall be made to regular tax payers.
2. WHAT STAMP DUTY RATE SHALL BE APPLIED TO CONSTRUCTION AGREEMENTS?
With the changes;
– Officially signed return for flat or revenue sharing agreements, (0,948% of the amount stated on agreement)
– Subcontracts signed between main contractors and subcontractors as a part of officially signed return for flat or revenue sharing agreements, (0,948% of the amount stated on agreement)
– Consultancy services agreemeents for return for flat or revenue sharing construction works, (0,948% of the amount stated on agreement)
– Building supervision agreements (0,948% of the amount stated on agreement) will be subjected to stamp duty provided that they are signed after 08.04.2017.
3. WHAT KIND OF CHANGES HAS BEEN MADE ON TITLE DEED TRANSFER FEES?
Council of Minister has been authorized about reduce or increase the title deed transfers fees with the approved changes.
4. WHAT WILL BE TAKEN INTO CONSIDERATION AT REDUCE/INCREASE?
Council of Minister can reduce or increase on deed transfers according to;
– Types of real estates,
– Procurement of real estate certificates,
– Classes, sizes, locations,
– Tax rates.
5. HOW MUCH CAN BE THE RATE OF REDUCE/ INCREASE?
The increase can be 100%, the decrease can be 10%.
6. WHAT KIND OF CHANGES HAVE BEEN MADE ON VAT?
According to the new law, exemption in certain circumstances on VAT of residence/office delivery has been adopted.
7. WHO WILL BENEFIT FROM THIS EXCEPTION?
– Foreign real persons who are living abroad,
– Companies that do not have a business center and registered office in Turkey and institutions that do not make profit in Turkey through a workplace or a representative.
– Turkish citizens that are working or living abroad for at least 6 months.
8. UNDER WHAT CONDITIONS SHALL THIS EXCEPTION APPLY?
This exemption shall applied on;
– First delivery of construction build as residence or office,
– Purchase price of real estate shall be brought to Turkey in foreign currency.
– Real estate shall not be sold again for 1 year. (Otherwise VAT shall applied.)
9. WHAT CHANGES HAVE BEEN MADE ON INCOME TAX & CORPORATE TAX?
The law regulates 5% reduction on income & corporate tax payers who are regular tax payers.
10. WHAT ARE THE CONDITIONS?
There are 3 main conditions to get such 5% reduction.
– The income or corporate tax payer should have declared tax on due time and should have paid such taxes on due time for the period of the year of reduction and the past 2 years of such reduction.
– They have not been subjected to a tax penalty because of their tax declarations during the period mentioned above.
– The total tax debt of income or corporate tax payer should not exceed TL 1000.
11. WHEN SHALL THIS REDUCTION APPLY?
The regulation for reduction shall be applied starting from the date 01.01.2018.