A contribution fee will be collected from credit cards for the defense industry.

Some regulations related to the Defense Industry Law and the proposal to amend certain laws have been submitted to the Grand National Assembly of Turkey (TBMM). The 12-article bill includes numerous provisions aimed at increasing the revenues of the Defense Industry Fund. The most striking one is the annual fee of 750 lira to be charged on credit cards with a limit exceeding 100,000 lira.

The regulations proposed by the ruling AK Party to increase the revenues of the Defense Industry Fund are as follows:

* The stamp tax amount from tax declarations, customs declarations, social security institution insurance premium declarations, and monthly premium and service documents, as well as the combined declarations of the withholding tax declaration (half of the stamp tax amount in annual income tax declarations),

* 750 TL from buyers and sellers separately in real estate sales transactions, and 375 TL from the person whose name the transaction is made in other transactions,

* An annual contribution fee of 750 TL will be collected from the holders of credit cards with a limit of 100,000 Turkish Lira and above for the Defense Industry Support Fund.

* The amount equal to the price paid at the notary for real estate sales transactions,

* 3,000 TL for the registration of new vehicles, and 1,500 TL for the sale and transfer of all types of second-hand vehicles,

* A fee of 75 TL per transaction is proposed for other transactions where notary fees are charged.

ADDITIONAL TAX ON DRONES AND WATCHES

In the Special Consumption Tax, drones and wristwatches with a tax base exceeding 5,000 TL are also included in the tax scope.

SMALL MOTORCYCLES ALSO SUBJECT TO MTV

With the amendment to the Motor Vehicle Tax Law, motorcycles with an engine capacity of less than 100 cubic centimeters, which are currently not taxed, and motorcycles with a power of 6 kilowatts or less are included in the scope of the Motor Vehicle Tax. This provision will be applicable to vehicles that will be registered and licensed for the first time after the effective date of the regulation.

SPECIAL REGULATION FOR INVESTMENT FUNDS

According to the amendment made to the Tax Procedure Law, the amounts tracked in the "ongoing investments" account, subject to inflation adjustment according to the accounting standards within the scope of the regulation, will be shown in a special fund account in the liabilities of the balance sheet and will not be taken into account in determining the period profit.

The amounts in this special fund account will be taken into account in determining the period profit in equal installments within the period of the completion of the investment and the following 4 accounting periods. According to this regulation, the amounts tracked in the special fund account and not taken into account in determining the period profit will be increased each year by the revaluation rate determined by the Law for the previous year. Additionally, inflation adjustment will not be applied to the amounts tracked in these accounts.

In cases where the business is discontinued during the investment period or after the activation of the economic asset, or if part or all of the amounts tracked in the special fund account are transferred to another account or withdrawn from the business, the amounts not taken into account in the period profit according to this regulation will be considered in determining the corporate profit for the period in which the business was discontinued or the special fund account was used in violation of the provisions of this article.

Additionally, the group of taxpayers for whom the profit/loss difference arising from inflation adjustments made in the accounting periods of 2024 and 2025, including temporary tax periods, will not be taken into account in determining taxable income, will also include companies in liquidation and bankruptcy situations, as well as economic state enterprises and public economic institutions covered by the Decree Law on Public Economic Enterprises. It is stipulated which period the taxpayers included in the scope will not take into account the profit/loss differences arising from inflation adjustments in determining taxable period income, and in which situations the said adjustment differences will be taken into account in determining the tax base.

These provisions will enter into force on the publication date of the regulation for taxpayers who have a special accounting period determined as of January 1, 2024, starting from the accounting period beginning in 2024.

CONTRIBUTION FEE FOR SSDF

Changes are being made to the Law on Some Regulations Related to the Defense Industry to increase the resources of the Defense Industry Support Fund (SSDF).

Accordingly, a contribution fee will be collected equal to the stamp tax amount from tax declarations, customs declarations, social security institution insurance premium declarations, and monthly premium and service documents, and half of the stamp tax amount from annual income tax declarations.

Additionally, for the same purpose, a contribution fee of 750 lira will be collected separately from buyers and sellers in real estate sales transactions, and 375 lira in other transactions.

Holders of credit cards with a limit of 100,000 lira and above will pay an annual contribution fee of 750 lira for each card.

In notaries, if real estate sales are conducted by notaries, the specified amount will be collected, 3,000 lira for the registration of vehicles to be registered for the first time, 1,500 lira for the sale and transfer of all types of registered vehicles, and 75 lira per transaction for other transactions where notary fees are charged.

In addition to the provisions in the regulation for the complete transfer of the collected fees to the SSDF, no share or fee will be paid to notaries from the contribution fees collected from transactions conducted at notaries.

The said amounts will be increased each year based on the revaluation rate for the previous year, effective from the beginning of the calendar year.

ASSESSMENT AND COLLECTION

The provisions regarding the assessment and collection of these revenues, the responsibilities of the institutions collecting them, and the timing of the transfer of the collected amounts to the Fund are also stipulated.

Accordingly, the contribution fee collected from declarations will be assessed together with the stamp tax collected from the declarations and will be transferred to the Fund account by the end of the month following the collection.

The amounts collected from real estate and cadastre transactions will be paid to the tax office before the transaction. No transaction will be conducted without the payment of this fee. In cases where a transaction is made without payment of the fee, the officials conducting the transaction will be jointly liable with those who are obliged to pay the fee.

The contribution fee for credit cards will be reflected in the account of the cardholder by the issuing institutions as of the 5th day of January each year, will be shown in the relevant period account statement, and the amount collected from the cardholder will be declared with the bank and insurance transactions tax declaration that must be submitted in the following month, and will be paid within the payment period of this tax.

The participation fee for cards that fall under the scope of the mentioned clause, which are obtained within the year or have a limit mentioned, will be reflected in the account of the month in which the card is activated or the limit increase is made, and will be paid under this clause.

Participation fees collected from transactions conducted at notaries will be collected by notaries during sales, transfers, and registration transactions, along with the notary fee for other transactions, and will be declared and paid in accordance with the relevant provisions of the Notary Law. No transaction will be conducted without the payment of the said fee. In the event that a transaction is conducted without the payment of the fee, the notaries conducting the transaction will be jointly liable with those who are obliged to pay the fee.

The provisions regarding the participation fee will be subject to the provisions of the Tax Procedure Law and the Law on the Collection of Public Receivables regarding the amount that must be paid by those obliged to pay the participation fee to the Fund.

The provisions regarding the participation fee will come into effect on January 1, 2025.

REGULATION FOR THE ESTABLISHMENT OF A NEW OSB IN SAMSUN

With the amendment made to the Coastal Law, it is now possible to establish an Organized Industrial Zone (OSB) in Samsun in the area where the boundaries and coordinates are determined, in accordance with the zoning plan decision based on the site selection decision.

According to the amendment made to the Special Consumption Tax Law, a 20% SCT will be applied to unmanned aerial vehicles (drones), wrist and pocket watches with a tax base of 5,000 lira and above, and motorized flying toys (drones) designed solely for entertainment purposes.