Tax evasion measure: Taxpayers with a 20% difference between income and revenue will be summoned for explanation.

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The Ministry of Treasury and Finance is closely monitoring tax declarations. The General Communiqué on Income Tax prepared by the Revenue Administration under the Ministry has been published in the Official Gazette. Accordingly, a wage exemption will be provided to service employees, provided that certain conditions are met.

Under the contracts made, service employees may be granted the right to purchase shares of the employer or group companies free of charge or at a discounted price, provided that they work for a certain period under the employer and meet the specified performance and similar criteria. With another regulation, according to the criteria determined by the Ministry of Industry and Technology, the portion of the shares given to service employees by employers who qualify as technogirişim companies, which is considered as income, will be exempt from income tax up to the amount that does not exceed the annual gross salary of the employee for that year, based on the market value at the time the shares are given. A regulation has also been made to encourage the retention of shares given to service employees for a longer period. For this purpose, it is foreseen that the exemption will be applied at different rates according to the holding period of the shares acquired by the service employees.

WHAT ARE THE CONDITIONS FOR BENEFITING FROM THE EXEMPTION?

In order to benefit from the aforementioned exemptions, the company that provides shares to its employees must qualify as a "technogirişim company" according to the criteria determined by the Ministry of Industry and Technology. The portion of the benefit provided through the shares cannot exceed the gross salary of the service employee for that year. The exemption will be applied during the period in which the shares are given to the service employees. These shares will need to be held for a certain period. If the shares acquired by the service employees are disposed of within 3 full years from the acquisition date, the entire exempted tax will be collected from the employer along with late interest; if disposed of within 4-6 years, 75% of the exempted tax; and if disposed of within 7-10 years, 25% of the exempted tax will be collected without tax loss penalty. Detailed examples regarding the application of the exemption are included in the communiqué.

EXPLANATION WILL BE REQUESTED FROM TAXPAYERS WITH DIFFERENT REVENUES

With the communiqué, a tax security mechanism has been established for determining the actual revenues of those with commercial or freelance activities. In this context, the daily revenue amounts of these taxpayers can be determined through inspections, provided that there are at least 3 inspections in a month and 12 in a calendar year. This regulation, which will come into effect on January 1, 2025, will also apply to corporate tax payers. For determining daily revenue amounts, the total of the daily revenue amounts determined on the days of inspection in the relevant month will be divided by the number of inspection days to determine the "daily average revenue." This revenue will be calculated by multiplying the daily average revenue by the number of working days in that month to form the revenue amount for that month. The total monthly amounts for the months inspected will be divided by the number of months inspected to calculate the "monthly average revenue." The monthly average revenue will also be multiplied by the number of months in which activities were conducted in the relevant year to determine the revenue amounts of the taxpayers for that calendar year. The determined revenue amounts will be compared with the amounts declared by the taxpayers. If the difference exceeds 20%, the taxpayers will be invited to explain.

TAXPAYERS WILL BE DETERMINED BY RISK ANALYSES

Risk analyses will be conducted to determine which taxpayers will be inspected. The results will be determined based on criteria such as inconsistencies between system records, declared income, and expenditures. In order to obtain results close to the actual situation in determining the annual revenue amount based on the determination of daily revenue amounts, factors such as the nature of the activity of the taxpayers to be inspected, whether they work seasonally, the number of days and months they actually operate, weekend and weekday operations, and holidays will be taken into account.

RESTAURANT OPERATORS, HAIRDRESSERS, AND DENTISTS

The communiqué includes detailed explanations regarding the application of the exemption. In this context, examples of how revenue determinations will be made for various service providers, including restaurant operators, jewelers, beauty salon operators, those engaged in medical activities in the fields of plastic, reconstructive, and aesthetic surgery, hairdressers, those conducting water sports activities for tourism purposes, beach operators, dentists, and those performing periodic maintenance on motor vehicles, are also included.