Tax changes in Turkey
Turkish PM Yıldırım announced an economic package containing social reforms and restructuring of public receivables, including SSI premiums and tax debt. The “Draft Law on Restructuring Some Receivables” was accepted by the Plan and Budget commission and expected to pass Parliament before the June 24, 2018 elections.
Scope of the law
The law applies to receivables accrued before March 31, 2018, including:
- All types of taxes and tax penalties
- Administrative monetary fines
- Insurance premiums, pension deductions, unemployment insurance premiums, and social security support premiums
- Customs duties
- Estate tax
- Motor vehicle tax and associated penalties
Restructured premium debts
Only the “Domestic PPI applied amount of principle receivable” will be collected, with delay penalties and default interests waived.
The Monthly Change Ratio of the Domestic Producer Price Index will be applied to principal amounts for insurance premiums, pension deductions, unemployment insurance, and related receivables. Delay penalties and default interests won’t be collected if the PPI-adjusted principal is paid.
Debts may be paid in 6, 9, 12, or 18 equal bimonthly installments, with the first installment due by August 31, 2018.
Administrative fines
Half of the principal amount for unpaid administrative fines imposed before March 31, 2018 will be deleted.
Tax debts
Similar Domestic PPI principles will apply to tax receivables, with detailed guidance to follow in application circulars.