Amendments to tax legislation brought about by Law No. 735 – Taxation

Turkey: Amendments to tax legislation introduced by Law No. 735

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Law No. 7351 made various changes regarding certain tax practices and disputes. These changes include the filing requirement for stay orders to be rendered in tax disputes related to tax refunds; exemption from corporation tax for profit shares of participation shares of investment funds of full taxpayers, other than venture capital investment funds; and a reduced corporate tax rate on certain entities’ income from export and production activities.

New developments

Law No. 7351 on Individual Retirement Savings and Investment Scheme and Certain Amendments to Certain Laws and Decree-Law No. 375 (“Law No. 7351“), published in the Official Journal of January 19, 2022, makes various changes related to certain tax practices and disputes. These changes are summarized below:

What do the changes brought about by Law No. 7351 imply?

  • Obligation of surety for stay of execution decisions in disputes related to tax refunds

Law No. 2577 on Administrative Judicial Procedure, amended by Law No. 7351, provides that 50% of the disputed amount must be deposited for a stay of execution decision to be rendered in an action for reimbursement of ‘tax. Stay orders will not be issued if the specified amount is not deposited.

  • Corporate tax exemption for profit shares of investment funds of fully-fledged taxpayers other than venture capital investment funds

Pursuant to Article 5/1-(a) of the Corporation Tax Law No. 5520, profit shares obtained from capital shares and equity investment fund participation shares- risk of full taxpayers are exempt from corporation tax.

The provision of the Corporation Tax Law amended by Law No. 7351 provides that shares of profits obtained from other participation shares in investment funds of full taxpayers shall also be exempt from tax. ‘Corporation tax. However, this exemption will not apply to income generated by investment funds whose portfolios consist of assets in foreign currencies, gold and other precious metals or capital market instruments based thereon.

  • Reduced corporate tax rate for income generated by certain entities from export and production activities

Through another amendment made by Law No. 7351 to the Corporation Tax Act, the corporate tax rate will be reduced by 1% for income generated:

  • By exporting entities exclusively resulting from export activities

  • By entities holding an industrial registration certificate and physically dealing exclusively with production activities

On this basis, corporation tax will apply at 22% to income generated by these entities for rated activities in 2022.

The reduced corporate tax rate will apply to the corporate tax base determined after the application of the reductions provided for in Article 32 of the corporate tax law.


With the obligation to consign decisions to stay execution to be rendered in actions for tax relief, Law No. 7351 aims to prevent undue reimbursements. It also provides for corporate tax exemption for profit sharing obtained from all investment funds except portfolios consisting of foreign currency assets, gold and other precious metals or capital market instruments based on them. Finally, Law No. 7351 aims to alleviate the tax burden of entities engaged in export and production activities.

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.


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