New Wealth Amnesty entered into force through the Promulgation of the Law No. 7417
Through the promulgation of the Law No. 7417 on the Amendment to the Civil Servants Law, Certain Laws and Decree No. 375 ("Law No. 7417") which is published in the Official Gazette dated 5th July 2022 and no. 31887, new Wealth Amnesty has been introduced.
Assets Within the Scope of the Wealth Amnesty
Assets to be brought into the country or to be registered within the scope of the Wealth Amnesty are as follows:
- Money, gold, foreign exchange, securities, and other capital market instruments held abroad, which belong to real or legal persons
- Money, gold, foreign exchange, securities, other capital market instruments, and immovables held in Turkey but not included in the business records.
Declaration, Notification Time, Bringing Assets to Turkey, and Payment of Tax
The following conditions must be met in order to benefit from the advantages of the Wealth Amnesty:
- Reporting the assets located abroad to the bank or intermediary institution in Turkey until the date of 31.03.2023.
- Bringing the assets located abroad have to be brought into Turkey within three months from the date of notification or must be transferred to an account opened in a bank or intermediary institution in Turkey.
- Declaration of the assets located in Turkey to tax offices until 31.03.2023.
- Payment in due time of the taxes levied on the assets within the scope of the Wealth Amnesty:
- For the assets covered which are located in Turkey, a tax rate of 3% is applied and paid until the end of the month following the month in which the assessment is made.
- Tax at the rates of (i) 1% for the notifications to be made until September 30, 2022, (ii) 2% for the notifications to be made between October 1 - December 31, 2022, and (iii) 3% for the notifications to be made until January 1 - March 31, 2023, shall be collected through banks and intermediary institutions and shall be declared and paid by them as tax responsible until the end of the 15th day of the month following the notification.
- However, if the abroad-located assets which are kept in an account of a bank or intermediary institution in Turkey for at least one year, the tax rate is applied as 0%. In this case, the tax collected during the notification is refunded upon the application of the notifier to the tax office.
Other Issues Regarding Wealth Amnesty
The advantages and other issues within the scope of the Wealth Amnesty are summarized as follows:
- No tax assessment or tax inspection will be conducted on the assets repatriated or registered through Wealth Amnesty.
- In case that the tax base difference determined in the tax examinations initiated for other reasons and the decisions of the valuation commission for other reasons are due to the assets reported or declared within the scope of the article, and the value of these assets is equal to or more than the tax base difference found, the tax assessment regarding the tax base difference will not be made. Despite the determination that the tax base difference is due to the reported or declared assets, tax assessment shall be made only on the difference amount, in the event that the tax base difference is greater than the value of the assets in question.
- In case a tax base difference is determined due to reasons other than the assets subject to notification or declaration through a tax inspection or assessment commission decisions, the amounts notified or declared within the scope of this article shall be assessed without setting off the tax base difference.
- Due to the notifications and declarations made within the scope of this article after the date of tax inspection or referral to the assessment commission, the provision of no inspection and no assessment is not applied for the assessments to be made as a result of the said inspection or appreciation commission decisions.
- Taxes paid within this scope cannot be written off as expenses and cannot be deducted from another tax.
- Taxpayers who keep books on the balance sheet basis shall open a special fund account in liabilities for the assets recorded in their legal books. This fund account cannot be withdrawn from the business until two years from the date of notification or declaration, cannot be used for any purpose other than an addition to the capital, and is not taxed in case of liquidation of the business. Assets may be withdrawn from the business after two years from the date of notification or declaration, without being considered in the determination of taxable income and distributable income for corporations.
- No fees will be charged for the transactions to be carried out at the land registry regarding the transfer of the immovables to be declared and included in the records of the business; the transfer of these immovables to the company is not considered disposal in the application of Article 80 bis of the Income Tax Law.
The Wealth Amnesty enters into force on the date of its publication in the Official Gazette (5th July 2022).
You may find the full Turkish text of Law No. 7417 here (Turkish).
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