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Omnibus Law on Introduction of Amendments to Tax Laws and Certain Decree Laws and Laws

“Law No. 7161 on Introduction of Amendments to Tax Laws and Certain Laws and Decree Laws” (the “Law”) was published in the Official Gazette no 30659, dated 18.01.2019. The Omnibus Law made some crucial amendments such as addition of the currency difference to VAT base, having the “difference ratio according to 12 months average of consumer price index” as a basis for determining the leasing increase price, 70% tax exemption in salary payment of private aviation personnel.

Some amendments introduced by the Law are as below:

Law Article No

Amended Provision

Introduced Amendment

Entry into Force

Article 1

Land Registry Law, Article 21:

Areas, which are under the use of Turkish Armed Forces, General Command of Gendarmerie, Command of Coast Guard and General Directorate of Security, and not owned by anyone as per the cadastral maps shall be registered in the name of the Treasury.


Article 2

Law on Expenditure Taxes, Article 29/1

Banking and Insurance Transactions Tax (BSMV) exemption is introduced for the gains collected by the asset financing funds in their own favour due to the transactions they conducted in the capital markets.


Article 3

Income Tax Law, Article 23/1

70% of the real net value of the monthly wage payments to pilots and certified personnel working for Turkish Aeronautical Association and civil aviation are exempted from income tax. “Real net value” of the wage is accepted as the amount that is subject to income tax, which remains upon deduction of certain amounts such as the social security premium, half of the life insurance premiums and trade union dues, and the President of the Republic is granted with the authority to increase this exemption rate up to 100% or decrease it down to zero.

The amendment shall not affect the personnel working at public institutions and organizations because the already applicable rates shall apply since the amendment text does not include the 70% restriction for the income to be earned by these persons.


Article 4

Income Tax Law, Article 4 and Article 29/1(2)

The income tax exemption in place for the compensations paid to commissioned officers, non-commissioned officers, privates and enlisted men, and civil mechanics employed by the army, for their services such as flight, diving, etc. shall continue to be applicable as is.


Article 5

Income Tax Law, Provisional Article 76/1

The exemption period regarding the income obtained through disposal of warehouse receipts issued under the Agricultural Products Licensed Warehousing Law is extended until 31.12.2023.


Article 7 ve 8

Public Officers Law, Article 36 and Provisional Article 46

Specialists of the National Security Council Secretariat-General, who are appointed upon passing the exam for assistant specialist shall be promoted to an upper rank at the time of their appointment as specialist and as a one-off and being a specialist of the National Security Council shall also be accepted as a career profession just like being a specialist in other public institutions, including in particular the ministries. These provisions shall allow the current specialists of the National Security Council to benefit from the same rights granted to career profession members.


Article 9

Law No. 926, Article 124

Physicians and healthcare non-commissioned officers working for the Ministry of National Defence and General Command of Gendarmerie shall continue to be listed as the staff of the Turkish Armed Forces and General Command of Gendarmerie, and may be assigned at the Ministry of Health, with their monthly pays and any financial and social benefits to be covered from the budget of the relevant ministry which they report to. The introduced amendment allows physicians, dentists and healthcare non-commissioned officers, who are assigned at hospitals operating under the Ministry of Health during the peacetime, to resume their primary duties at the army, when required. Accordingly, a precaution has been taken against the risk of shortages in personnel experienced on surgical intervention, in particular to soldiers injured during operations.


Article 10

Law No 926, Provisional Article 45

As per the introduced amendment, the retirement period of military judges is extended until December 31, 2021. On the other hand, military judges assigned at the legal services departments or units of the Ministry of National Defence may be temporarily assigned at other legal services departments/ units.


Article 17

VAT Law, Article 13/1(j)

With the amendments introduced, wording on “renewable and other energy” plants were added to the article that stipulates the tax exemptions and therefore construction of these plants are also exempted from VAT.

Furthermore, delivery of books and periodical publications by the publishers that are granted a publishing certificate by the Ministry of Culture and Tourism is also exempted from VAT.


Article 18

VAT Law, Article 24/1(c)

As a result of the introduced amendment, in case the amount determined in foreign currency/ as an exchange rate-indexed amount is paid after the date on which the situation that caused the arising of tax in part of in full, the exchange rate difference occurring in favour of the seller shall be taxable as a constituent of the tax base.


Article 19

VAT Law, Provisional Article 35/1

The amendment has resulted in the extension of the implementation period of the Provisional Article 35 of the VAT Law. Consequently, the procedures of transfer and delivery to the Treasury of the immovable properties expropriated by way of barter within the scope of urban transformation projects shall be exempted from VAT, stamp duty and land registry fees until 31.12.2020.


Article 20

VAT Law, Provisional Article 37/1

The amendment ensured that the implementation period of the VAT refund provided for building-construction expenditures in 2018 regarding manufacturing industry investments has been extended to cover 2019 as well. On the other hand, the President of the Republic is authorized to extend this implementation period up to 5 years.


Article 25

Law on Unemployment Insurance, Article 50/2

The introduced amendment has amended one of the conditions for benefiting from unemployment allowance, which was “continuous employment by paying premium” for the last 120 days as “being subject to employment contract”. Thus, situation of non-payment due to absence in spite of being subject to employment contract for 120 days has been eliminated.


Article 37

Law on Special Consumption Tax, List No. (III), Schedule (A)

The amendment introduced exemption from Special Consumption Tax to turnip juice, flavoured and aromatic drinking milk and beverages considered as follow-on milk and for infants.


Article 38

Law on Special Consumption Tax, Provisional Article 8

Regarding turnip juice and flavoured and aromatic drinking milk, and beverages considered as follow-on milk and for infants as per the Turkish Food Codex, which are imported or delivered before 18.1.2019, the amendment stipulated that no tax assessment shall be made for the Special Consumption Tax and the corresponding VAT, and no tax penalty shall be imposed, and any previous assessments or tax penalties made/imposed shall be cancelled, on the condition of waiver from pending lawsuits, if any, and the accrued amounts shall be cancelled, whereas any collected amounts shall not be rejected or refunded.


Article 42

Law on Social Insurances and General Health Insurance, Additional Article 19

The Law stipulated that monthly pays and the total amount of monthly payments made under disability and old-age insurance cannot be less than 1,000.00-TL including the additional payments. Whereas, it is stipulated that the total amount of payments made under death insurance cannot be less than the amount to be determined based on the ratio of the shares of the beneficiaries of such amount. It is provided that if the calculated monthly pays are less than the amount mentioned in this article, the difference shall be collected from the Treasury.

First payment term after 18.1.19

Article 43

Corporate Tax Law, Provisional Article 9

The scope of the application which enables the taxpayers to benefit from higher rates of investment incentives for their investments in manufacturing industry in 2017 and 2018 within the scope of an investment incentive certificate is extended so as to cover the year 2019 as well.


Article 48

Law No. 5902, Article 23/1/p>

The amendment introduced an allowance fund in the Prime Ministry budget for emergency aid activities in cases of natural disasters that may happen abroad; the amendments provide for that this allowance shall be used by being transferred to a private account and may be transferred to the accounts of public institutions and organizations in cases deemed appropriate by the Ministry of Interior.


Article 49

Law No 6004, Article 10/1(b)

The amendment allows entry of graduates of labour economics department also to the exams for qualifying as a diplomat. Furthermore, the age limit for holders of post-graduate degrees, with respect to officers of foreign affairs professions, has become 35.


Article 52

Law no 6004, Article 16

The amendment has paved the way for Turkish nationals, who are working as contracted personnel at the overseas posts of the Ministry of Foreign Affairs, also to benefit from family allowance. Accordingly, education allowance to be granted for the children of such personnel shall be 30% of the annual expenses for children continuing undergraduate degrees, and 50% of the annual expenses for children continuing the primary, secondary and high school education.


Article 56 ve 59

Turkish Code of Obligations, Article 344

With the amendment introduced to Article 344 of the Code of Obligations (TCO), which is in relation to the determination of the rent amount increase, it is provided for that the rent amount shall be determined based on the “exchange ratio calculated according to 12-month average of the consumer price index (CPI)”. In the former wording of the article, it was stated that the rate of increase in the producer price index would be taken into account for determining the rent amount.

Also, Paragraph 4 of Article 344 of TCO was amended by adding “on the condition that the provisions of the Law No 1567 and dated 20/2/1930 on the Protection of the Value of Turkish Currency (PVTC) are reserved” after the wording “if the rent amount is agreed in foreign currency in the contract”. As a result of this addition, the PVTC provisions which are applicable in case of determining the rental contract value in foreign currency or as an exchange rate- indexed amount have been taken into consideration.

In connection with this amendment, as per Article 59 of the Law (pursuant to the amendment introduced to Provisional Article 2 of the Law No 6217 stipulating that certain articles of TCO including Article 344 thereof shall not be applicable until 1.7.2020), it is stated that the amendment stipulating that CPI shall be taken as basis for rent amount increases shall be applicable.


Please click here to access the full Turkish text of Law no 7161.

Category Taxation Law

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