06April2015

Anticipated Tax Benefits in Capital Increases

A new regulation¹ aimed at encouraging incorporations, limited liability and comandite companies² to invest in paid capital rather than foreign capital will enter into force on 01/07/2015 and allow:

A tax deduction³ for the paid portion of the increased capital to be calculated by the legally applicable interest rate.⁴ In the event where no profit is declared for the year in question, the tax deduction can be carried over to the subsequent tax year.

For companies who are considering a capital increase, it is recommended that they calculate the advantages to be gained with the new regulation.

Click here for the recent regulation⁵ (available only in Turkish) and contact your account representative for detailed information on the subject.

References:

www.tbmm.gov.tr

Law no : 6637 Date : 27/03/2015 Law amending certain laws and enactments.

The said regulation is currently submitted for approval to the Presidency, and upon approval, will go into effect on 01/07/2015.
Companies in finance, banking and insurance and state-controlled entities are out of scope of this regulation.
50% of the interest calculated at the related account period.
The latest interest rate with respect to commercial bank loans in TL currency as declared by the Cenral Bank of Türkiye.
See art. 8.

Category Taxation Law, Turkish Commercial Code