REGULATIONS ON INCOME TAX AND RETAIL SALES INTRODUCED WITH THE NEW OMNIBUS LAW
The Omnibus Law on the Amendment of the Income Tax Law and Some Laws and Decrees (in Turkish, “Gelir Vergisi Kanunu ile Bazı Kanun ve Kanun Hükmünde Kararnamelerde Değişiklik Yapılmasına Dair Kanun, the“Omnibus Law”) is announced to have been enacted by the Grand National Assembly of Turkey.
As per the new regulation in the case where meals are not served to the employees at the workplaces, it is foreseen that the cash meal allowance cost per workday, not exceeding TRY 51 (fiftyone) will be exempted from income tax, and the payments exceeding this amount and other benefits provided for this purpose will be taxed as wages. In the event where the cash meal allowance amount is transferred into the bank account of the employees and these amounts are used outside of the catering service firms, it will be possible to benefit from the related exception.
Besides, the wages which are paid by the employer for earnings of their employees abroad in the construction, repair, assembly and technical services will be exempt from income tax.
Another important regulation related to the employees is that the allowances such as electricity, natural gas, and other heating expenses, not exceeding TRY 1,000 (one thousand) per month (for those who exceed this amount, up to TRY 1,000 (one thousand) per month), will be exempted from income tax and insurance premium payments until 30 June 2023.
Additionally, the Omnibus Law envisages a provision regulating the penalty amounts of administrative fines in the retail trade. The law-maker, through increasing the administrative fines aims to (i) prevent unfair competition in the retail trade, (ii) to reduce informality, (iii) to prevent unfair commercial gains, (iv) to ensure the proportionality between the violation of the applicable law and (v) increase the applicability of the legislation with the updated amounts of administrative fines.
This Newsletter is to inform you regarding certain new legal developments however, kindly note that the Omnibus Law has not been published in the Official Gazette yet.
Our Law Firm remains at your disposal for any further clarifications you may need.