New regulation on Motor Vehicle Tax and Corporate Tax

Motor vehicle tax

In the new omnibus bill prepared by the government, there are new regulations regarding Motor Vehicle Tax and Corporate Tax.

According to the proposal included in the omnibus bill, the motor vehicle tax has been doubled for newly registered vehicles and existing vehicles registered in traffic until the end of the year. The corporate tax has been increased to 25%, and banks will be required to pay 30%.

The general corporate tax rate for the year 2023 has been increased from 20% to 25%, while for banks, financial leasing, factoring, electronic payment companies, capital market institutions, and insurance companies, the rate has been raised to 30%. Furthermore, the scope of exemptions for real estate sales and investment fund returns has been narrowed.

The penalties under the Environmental Law can be increased up to double the current amounts.

According to the proposal in the second article, the penalties stipulated in the Environmental Law can be increased up to double the amount determined by the revaluation rate. This grants the President the authority to increase the penalties, whereas previously the authority was limited to increasing them by half the amount.

The exemption for value-added tax (KDV) on immovable properties held in assets is being eliminated.

The exemption application for the transfer and delivery of immovable properties held in the assets of corporations for a minimum period of two full years is being abolished. However, the exemption for the sale of non-traded subsidiary shares held in assets will continue.

Additionally, the exemption rate of 50% applied to the sale of immovable properties in the assets of corporations, as specified in the 11th article, will be reduced to 25%.

Fuel Special Consumption Tax (SCT) will be automatically increased.

With the omnibus law regulation, a provision has been introduced into the list of Special Consumption Tax (SCT) under Article I, which includes fuel and natural gas, stating that the fixed tax amounts will be automatically increased based on the semi-annual Consumer Price Index (YİÜFE).

The income tax exemption for investment funds has been removed.

According to the 8th article of the proposal, the income tax exemption for the profits obtained from investment funds and the corporate tax exemption for the gains from the sale of immovable properties are being removed. However, the exemptions for corporate venture capital investment fund shares and gains from venture capital investment partnerships’ stocks will continue.

The corporate tax rate has been increased to 25%, and banks will pay a rate of 30%.

According to the 10th article of the proposal, the corporate tax rate is being increased from 20% to 25%. However, for banks, financial leasing, factoring, financing and Savings Finance Companies under the Law on Financial Leasing, Factoring and Financing, electronic payment and money institutions, currency exchange offices, asset management companies, capital market institutions, insurance, and reinsurance companies, the tax rate will be applied at 30%. The increased corporate tax rate will be effective starting from the 2023 income.

The support authority of the Treasury in the Deposit Insurance Fund (KKM) has also been transferred to the Central Bank.

Source: Canan SAKARYA – Hüseyin GÖKÇE/Ekonomim

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