How Will the Electricity, Natural Gas and Heating Allowance Exemption Be Applied?

The Revenue Administration has announced the details with regards to the electricity, natural gas and heating allowance exemption with the Income Tax Communique no:322.

1. What are the conditions for this exemption?

These allowances;

• should be made between 09.11.2022 and 30.06.2023 (including this date),
• should be done for electricity, natural gas and other heating expenses,
• should not exceed 1,000 TL per month,
• should be made in addition to the existing wages.

2. What will happen if the employer pays more than 1,000 TRY for electricity, natural gas and heating?

If the employer pays more than 1,000 TRY for electricity, natural gas and heating in addition to the existing wages & benefits, the exceed amount will be taxed.

Example: if the employer pays 1,500 TRY for electricity, natural gas and heating in addition to the wage amount of gross 15,000 TRY, the amount up to 1,000 TRY will be exempt from taxation and 500 TRY will be subject to taxation.

3. Electricity, natural gas and similar heating allowances should be made in addition to the current / existing wages & benefits.

There should be an increase on the current compensation & benefits package of the employee to be able to benefit from that exemption.

It is not possible to benefit from this exemption by showing some portion of the current wages, overtime, premium and social aid payments as electricity, natural gas and other heating allowances.

Example: If the employer currently pays 10,000 TRY gross wage and 1,000 TRY social aid allowance to an employee (11,000 TRY in total), the exemption would only be applicable for an additional 1,000 TRY allowance to this 11,000 TRY.

It will not be possible to benefit from that exemption by claiming that the social aid payment is made for electricity, natural gas and other heating expenses without an additional payment by the employer.

4. Would that exemption be applicable for the electricity, natural gas and similar heating allowances that have already been paid for a time?

If there is any allowance for the electricity, natural gas and similar heating expenses already paid for a time, this exemption would be applicable for the period 9 Nov 2022 – 30 Jun 2023.

Example: If the employer pays gross 9,000 TRY wage and 500 TRY heating allowance in previous months, the exemption would be applicable for this 500 TRY between 9 Nov 2022 – 30 Jun 2022 period.

5. Is there any document / invoice requirement for these electricity, natural gas and similar heating allowances?

There is no document / invoice requirement for these allowances.

6. Should payments made for electricity, natural gas and other heating expenses be shown on the payroll?

These payments should be located on payroll and the amount up to 1,000 TRY should be exempt from income tax base.

7. Are the payments for electricity, natural gas and other heating expenses subject to Stamp Duty?

There is no statement in the Law and the Communique with regards to a Stamp Tax exemption.

Accordingly, these payments are subject to Stamp Tax.

8. Do employers have an obligation to make electricity, natural gas and other heating allowances to the employees?

There is no statement in the Law and Communique with regards to an obligation for the employers.

Accordingly, there is no obligation for the employers to pay electricity, natural gas and other heating allowances to the employees.

Should you have any queries or need further details, please contact your customer representative.