Corporate Income Tax, Corporate Tax, Excise Duty, Excise Tax, Incentives, Special Consumption Tax (SCT)

Omnibus Law 7186 made Amendments on Several Tax Laws

“Law on Amendment of Income Tax Law and Certain Laws” no.7186 was published in the Official Gazette dated 19 July 2019 no.30836. This omnibus law contains of 35 articles. The very high-level summary of the amendments brought by the law are;

  • Capital repatriation: Initially, the Law 7143 was introduced on 18.05.2019, this new regulation reduces the tax rate for the repatriated captial from 2% to 1% and makes some amendments in the scope of capital
  • Recording credit repayments -that are not collected or not expected to be- as bad debt: Banks will be able to regard not collected or collecteble credit repayments as bad debt and write these off in the tax calculations.
  • Special provisions used by factoring firms to be regarded as expense in the tax calculation.
  • Tax exemption on financial restructuring
  • Supporting the production/use of electric motor vehicles by tax arrangements: Presidency has been authorised to allow companies that conduct the R&D in Turkey for the development of electric motors to be used in the new generation zero emission vehicles to deduct investment contribution gained by investment incentives over the Special Consumption Tax. (Normally, investment contribution is only deductible by the corporate tax)
  • Increase in departure to abroad fees: 15TL fee that was paid by Turkish citizens that depart abroad is increased to 50TL
  • Revenue based taxation: President has been authorised to determine the businesses that will be able to prefer income taxation over the business revenue.
Excise Duty, Excise Tax, Special Consumption Tax (SCT)

Excise Duty (SCT) Adjustment on Fuel Products

Recent currency fluctuations in Turkish Lira required authorities to take some urgent actions to moderate its effect on the local market. One of these regulations was the Cabinet Decree dated May 14, 2018 no. 2018/11818 that allowed Excise Duty (Special Consumption Tax [SCT]) amount of certain fuel products to be rearranged in line with the f/x changes to stabilize the price of fuels in the market.

In principle, the decree allowed Ministry of Finance to rearrange Excise Duty on Gasoil, Diesel and LPG products and their variances when the Turkish Lira currency is devalued over other currencies. With the power of this decree, several decisions were taken by the ministry and published on its website that reduced (and increased afterwards when recovery realised) these amounts.

Now it seems that SCT amounts of Gasoil products (95 and 98 Octane) has returned to values before the decree was published but not yet for Diesel and LPG. Below is a graph that indicates the Excise Duty amount changes between the days before the decree and today.


If you have further queries on this issue, please feel free to contact us.

Excise Duty, Excise Tax, Special Consumption Tax (SCT), VAT

Turkey to reduce VAT and SCT (excise) taxes until year end

Authorities in Turkey continue to take preventive measures against the shrinkage risk of the consumption in the local market.

Here is the summary of today’s Presidential Decree about reduction in some taxes in Turkey;

1- Deadline of reduced title fee (3% instead of 4%) is extended to year end.

2- Deadline of reduced VAT rate on house sales (8% instead of 18%) is extended to year end.

3- VAT rate on the sale of furnitures is reduced to 8% until the year end.

4- VAT rate on the sale of commercial vehicles is reduced to 1% until the year end.

5- Reduced Special Consumption Tax (SCT) on passenger cars (highest reduction is 15% for vehicles that SCT base is <120.000TL & engine is <1.600cm3) until the year end.

6- Special Consumption Tax (SCT) on home appliances (white goods) reduced to 0% until the year end.

These changes are of course very good developments on the consumer side. But still, there will be discussions on the days switching from full taxable days to tax reduced days (or vice versa) from corporates’ perspective. If you have further queries on this issue, please feel free to contact us.

Excise Duty, Excise Tax, Special Consumption Tax (SCT)

Change in Tobacco Excise Duty

Tobacco products are listed in list 3-B of Excise Duty law (also known as Special Consumption Tax – SCT). In general, excise duty of tobacco products is calculated with the combination of “ad-valorem rate”, “fixed tax” and “minimum fixed tax”.

With a recent Decision of Council of Ministers published on official gazette dated 30/06/2018, some tobacco products’ ad-valorem rate is reduced to 63% (previously was 65,25%), fixed and minimum fixed tax amount is raised between 0,0096 and 0,095 TL. With this change, it is not expected to see a difference on the retail prices of most packed cigarettes. But, only low price cigarettes retail price may increase due to increase in minimum fixed tax amounts.

If you have further queries on this issue, please feel free to contact us.

Excise Change Tobacco

Excise Duty, Excise Tax, Special Consumption Tax (SCT)

Excise Duties in Turkey

Excise duty (also known as Special Consumption Tax – SCT) in Turkey is applicable on different group of products. Different than VAT, this tax is applied only once to a product. After tax is applied once, even the product is delivered again to other traders, excise tax is no more applicable on the same product.

“With a recent law amendment, soda waters with flavor is included in the scope of Excise Duty and this change is applicable as of 1/1/2018.”

Products in the scope of Excise Duty is categorised under 4 lists. Below you may find the scope of each list and general taxation rule applicable.

List I – Fuels and Other Oil Products

Excise list I consists of 2 sub-group of products;

List I (a) includes motor and heating fuels. This group is the main scope of the Excise Duty. Continue reading “Excise Duties in Turkey”