23.10.2025 07:40
The 36-article bill, which includes regulations on tax rates, narrowing exemptions in VAT, tax changes in real estate and title deed transactions, combating the informal economy, increasing public revenues, and adjustments in the budget balance, has been approved by the Planning and Budget Commission.
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The Plan and Budget Commission convened under the chairmanship of AK Party Samsun Deputy Mehmet Muş. Today, the commission discussed the "Draft Law on Amendments to the Tax Laws and Certain Laws and the Decree Law No. 631" that the AK Party submitted to the Grand National Assembly of Turkey last Friday.
EXEMPTION ON RENTAL INCOME WILL BE REMOVED
The draft law, consisting of 36 articles, aims to combat unregistered employment, ensure tax justice, and include non-tax areas within its scope. With this regulation, the general exemption on residential rental income obtained within a calendar year will be removed. This exemption will be restructured only for those who receive retirement, disability, widow, and orphan pensions from social security institutions established by law.
TAX BURDEN WILL BE EQUALIZED
The regulation will reduce the differences in tax advantages regarding the deductibility of interest paid on properties rented out that were purchased with loans. The aim is to equalize the tax burden between purchases made with and without loans.
With the amendment to the Income Tax Law No. 193, the re-inclusion of the fourth temporary tax period into the system will be regulated, allowing the determination of the earnings of taxpayers with temporary tax liability in 3, 6, 9, and 12-month periods and the collection of the temporary tax declaration for the last quarter of the year.
Another change in the Income Tax Law will regulate that the one-year holding exemption for funds whose portfolio consists of at least 51% of Borsa Istanbul shares will not apply to certain specified free funds. With this regulation, the use of exemptions for some funds that are not traded on TEFAS, sold only to qualified investors, and have no portfolio restrictions will be prohibited.
MONITORING OF DECLARED PURCHASE-SALE PRICE IN LAND REGISTRY
The regulation will ensure that vehicles registered in the name of investment monitoring and coordination directorates established instead of provincial special administrations in metropolitan areas are exempt from motor vehicle tax.
With the amendment to the Fees Law, the title deed fee will be calculated based on the declared price in real estate transactions, which must not be less than the real estate tax value, and the tax loss penalty for inaccurate declarations will be increased from the current 25% to double.
PROPORTIONAL NOTARY FEE WILL BE COLLECTED FOR NEW AND SECOND-HAND VEHICLE TRANSACTIONS
With the regulation included in the proposal, a proportional notary fee will be collected for the first registration of new vehicles and the sale/transfer of second-hand vehicles, based on the sale price and not less than the minimum fixed fee.
NEW ANNUAL FEES WILL BE COLLECTED FROM VETERINARIANS AND PRIVATE HEALTH INSTITUTIONS
The regulation will introduce annual fees for private health institutions that provide diagnosis and treatment services, dental clinics, veterinary practices, animal hospitals, precious metal activity permits, second-hand motor vehicle and real estate trade authorization certificates, and commercial aviation licenses, while some license fees will be annualized. (ARTICLE 10)
FEE DETERMINATION IN FOUNDATION HIGHER EDUCATION INSTITUTIONS
With the amendment to the Higher Education Law No. 2547, the authority of the board of trustees in determining student fees at foundation universities is preserved, but the principles for updating fees will be determined according to YÖK regulations, taking into account the average increase in the annual producer price index and the annual consumer price index for June of the current year.
The regulation will remove the existing fee exemption for notarized second-hand vehicle sales/transfers. The regulation aims to exempt the sale of real estate owned by investment monitoring and coordination directorates from VAT.
VAT EXEMPTIONS FOR UEFA ORGANIZATIONS ARE INTRODUCED
The regulation will temporarily exempt deliveries and services related to UEFA and participants coming from abroad for the 2026 Europa League Final, 2027 Conference League Final, and 2032 European Championship from VAT, income, and corporate tax. The VAT incurred within the scope of the exemption will be allowed for deduction and refund.
In the Individual Pension System (BES), the President will be authorized to increase the state contribution rate up to fifty percent and reduce it to zero, in line with financial targets.
THE AMOUNT OF NET DEBT UTILIZATION BY THE TREASURY WILL BE INCREASED
With the temporary article added to the Law on the Regulation of Public Finance and Debt Management, the net debt utilization amount determined by the budget law will be increased to meet the additional financing needs arising from the expenses related to the 2023 Kahramanmaraş-centered earthquake and the 2025 revenue-oriented budget developments, as well as to maintain the Treasury's cash reserves at a certain level.
The regulation will increase the borrowing amounts, and in cases where self-employed individuals do not pay their premiums on time and later make a lump-sum payment, the reinstatement premium rate for the suspended periods will be kept higher, and the borrowing premium rates, including those covered by Law No. 5434, will be increased to 45%.
There will be an increase in the premium rates for long-term insurance branches under Article 81 of Law No. 5510. Additionally, the one-year premium support given to young entrepreneurs will be removed. The regulation will raise the upper limit of the earnings subject to premium from 7.5 times the minimum wage to 9 times.
For those receiving income or pensions from SGK, the collection of their debts, which are due to premiums and late fees due to their own or the rights holder's insurance, will be allowed to be deducted from the income/pensions at a rate not exceeding 25%.
ADDITIONAL BUDGET SUPPORT FOR PUBLIC UNIVERSITY HOSPITALS
The regulation will ensure that instead of offsetting the amounts that fall below the 2025 contract amount for university hospitals under lump-sum contracts from their receivables in 2026, these amounts will be covered by the budget of the Ministry of Labor and Social Security.
The application period for the regulation regarding the non-economic enterprise status of income generated through withholding by associations and foundations, such as rental income, securities, and interest income, and revolving fund revenues in application units affiliated with the Ministry of National Education, will be extended until December 31, 2035. The Urban Transformation Directorate will be able to borrow internally from banks, with more than half of its capital owned by the public, by using its assets and real estate as collateral.
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