The ruling AK Party has introduced a new bill to Parliament that proposes changes to the domestic minimum corporate tax. Under the new law, a company with a ₺1 million ($30,211.57) profit will pay an additional ₺50,000 in taxes.
Current Law vs. New Law
Currently, a company with a ₺1 million profit and an ₺800,000 capital gains exemption pays ₺50,000 in corporate tax on the remaining ₺200,000 at a 25% rate. However, under the new law, the same company will now pay tax on 10% of its gross profit before any exemptions or deductions. This results in a total corporate tax of ₺100,000, effectively doubling its tax liability.
Exemptions for New Companies
The new law will not apply to companies in their first three fiscal periods, allowing new businesses to grow without the additional tax burden. The 10% tax rate for the minimum corporate tax can also be adjusted by the president based on sector, activity, or industry, ranging from zero to double the standard rate.
Exempted Entities
Certain entities will be exempt from this minimum corporate tax, including:
- Public institutions
- Non-profit organizations
- Retirement investment funds
- Real estate investment funds
This legislative change aims to streamline corporate taxation while providing flexibility for different sectors. As businesses navigate these new regulations, understanding the lease definition and lease meaning becomes crucial for financial planning and compliance.
What is a lease? A lease is a contractual arrangement where one party (the lessor) grants another party (the lessee) the right to use an asset for a specified period in exchange for periodic payments. This understanding of lease meaning is essential for companies as they manage their assets and liabilities under the new tax framework.
