Restructuring of debts owed to the state has been approved. Following deliberation in the Grand National Assembly of Turkey, the bill titled “Proposal on the Restructuring of Certain Receivables and Amendments to Certain Laws” was accepted.
Which Debts Are Covered by the Restructuring?
Under the adopted provisions, receivables owed to the Ministry of Trade, the Ministry of Treasury and Finance, the Social Security Institution, provincial special administrations, municipalities, and the Presidency of Investment Monitoring and Coordination (YİKOB) will be eligible for restructuring. The cut-off date for these receivables is January 31, 2022.
The scope includes taxes, tax penalties, customs duties, administrative and judicial fines, insurance premiums, group insurance premiums, pension deductions and employer contributions, unemployment insurance premiums, social security support premiums and all related taxes and premiums. Any interest, increases, late-payment surcharges, default interest, punitive interest and delay penalties associated with these receivables will also be covered. Declarations filed with reservations that resulted in assessed receivables will be treated as finalized receivables for the purposes of restructuring.
Vehicle tax (MTV) for each vehicle, administrative fines related to vehicles and transit fees will allow technical inspection during the installment period provided that at least 10% of the relevant amounts are paid. Charges arising from municipal water, wastewater and solid waste fees, certain service fees provided by municipalities, shares collected by metropolitan municipalities for solid waste fees, water and sewerage administrations’ water and wastewater charges and contribution-to-expense shares, and receivables of YİKOBs are also included within the restructuring scope.
If legal action has been filed concerning tax penalties or administrative fines related to customs liabilities, the amounts to be paid in those cases are covered by the arrangement. The restructuring also covers disputed administrative fines and contested expropriation-of-property (ecrimisil) claims that fall within the scope of the regulation.
Details of the Restructuring
Ongoing tax audits and valuation procedures that began before the publication date of the regulation will continue to be carried out. For tax loss penalties imposed for periods covered by the arrangement due to participation-affiliated transactions, if the penalized party pays 25% of the penalty within the time and manner specified, collection of the remaining 75% will be waived.
A provision was added to impose a one-time supplementary tax on institutions to meet the urgent needs of earthquake victims and to support reconstruction of the affected region. In addition, corporate taxpayers may be subject to a one-time supplementary tax on certain items reported in their 2022 corporate tax returns: a 10% one-time tax on exempted or deducted amounts and reduced-rate corporate tax bases that were claimed as deductions from corporate income, without linking it to the period profit; and a 5% one-time tax on corporate tax exemptions and exempt income earned abroad that can be documented as carrying at least a 15% foreign tax burden.
In provinces where a state of emergency is declared, tobacco cooperatives established by tobacco producers at centers designated by the Ministry of Agriculture and Forestry will be permitted to benefit from a 50% reduction in the special consumption tax rate on domestically produced goods that meet the definition and standard of “wrapped shredded tobacco product produced from a single tobacco variety” until December 31, 2024.