The principles regarding the application of the corporate tax rate with 1 point discount for the earnings from export and production activities were determined.
The Communiqué of the Ministry of Treasury and Finance Revenue Administration on Amending the Corporate Tax General Communiqué was published in the Official Gazette and entered into force.
With the “Law Amending the Law on the Private Pension Savings and Investment System and Some Laws and the Decree-Law No. 375”, the corporation tax for the profits of exporting institutions exclusively from exports, and of the corporations holding the industrial registration certificate and actually engaged in production activities exclusively from production activities. It was allowed to apply the rate of 1 point at a discount.
With the Communiqué, the principles regarding the application in question were determined. Accordingly, the corporate tax rate will be reduced by 1 point for the profits of the exporting companies exclusively from exports, and the profits of the companies that have the industrial registration certificate and are actually engaged in production activities. In case of exporting the products produced within the scope of the industrial registration certificate, a 1 point discount will be made as the income obtained from the production.
WHO CAN BENEFIT FROM THE DISCOUNT
All corporate taxpayers holding an industrial registration certificate and actively engaged in production activities or exporting will be able to benefit from a 1-point deduction for their earnings from these activities.
Taxpayers who use the calendar year as the accounting period will be able to benefit from this 1-point discount for their earnings from production and export activities as of January 1, 2022.
The corporate tax rate applicable in the relevant period may be reduced by 1 point, exclusively for the earnings of exporting institutions from the export of goods and services.
In order to apply the corporate tax rate with a 1 point discount, limited to the earnings from the production activities of the institutions engaged in production activities, these institutions must have an industrial registration certificate and actually engage in production activities.
In case the taxpayers have earnings from export and production activities as well as from other activities, the tax base arising from export and production, to which 1 point discount will be applied, will be determined by dividing the earnings from export and production separately to the profit of the trade balance sheet.
Pursuant to the regulation, the share of net corporate income will be determined by proportioning the earnings from exports and production to the profit of the trade balance sheet, and a 1 point discount will be applied to the base. If the profit from production or export is greater than the profit of the trade balance sheet, 1 point discount can be applied to all of the earnings from exports and production, provided that it does not exceed the net corporate income.
WHO CAN BENEFIT FROM DISCOUNTS AT THE SAME TIME
In the event that institutions whose shares are offered to the public at a rate of at least 20 percent for the first time on the Borsa Istanbul Equity Market earn a profit by engaging in production and export activities, 2 points are deducted from production activities and export activities after calculating 2 points for all bases of these institutions. 1 point additional discount will be possible for their earnings.
Within the scope of this regulation, if the companies engaged in export and production activities will benefit from the reduced corporate tax in the same period, the tax deduction rate arising from the investment incentive certificate will be calculated according to the rate applied with 1 point discount.
Accordingly, corporate taxpayers will be able to benefit from these discounts at the same time if they meet the conditions.
1 point deduction will not be applied for earnings that are subject to a discount or exemption and for which no tax is calculated.
In order to determine the corporate tax base of the income obtained from the activities accepted within the scope of the aforementioned reduction, revenue, cost and expense elements should be monitored separately, not associated with other activities and records should be kept in such a way as to ensure this distinction. It will be possible to distribute a suitable distribution key between the activities covered by the discount and the activities not covered by the discount.
On the other hand, the exchange rate difference, interest and similar incomes corresponding to the receivables arising from both export activities and production activities will be evaluated within the scope of corporate income to which 1 point discount will be applied.