Asset peace is the repatriation of money, gold, foreign currency, securities, and other capital market instruments of real and legal persons located abroad by availing of certain tax advantages and thus bringing these assets into the Turkish economy.
Article 50 of the Law No. 7417 on the Amendment of the Law on Civil Servants and Certain Laws and the Decree Law No. 375, which entered into force after being published in the Official Gazette dated July 5, 2022, introduced new regulations on asset peace with the provisional Article 15 added to the Corporate Tax Law No. 5520. The regulations allow real and legal persons to register their assets in Türkiye and abroad and to benefit from certain advantages and privileges.
In order to benefit from the new asset peace implementations, money, gold, foreign currency, securities, and other capital market instruments located abroad shall be reported to the bank or intermediary institution in Türkiye until March 31, 2023, and as for the assets in Türkiye, these shall be declared to the tax authorities until March 31, 2023.
The amendments introduce a tax payment obligation to benefit from the asset peace. Previously, tax inspections and assessments were not being conducted as a result of bringing the assets within the scope of the asset repatriation to Türkiye; however, with this provisional article, in order to benefit from the asset peace, the obligation to pay tax has now been regulated. Accordingly, banks and intermediary institutions shall be responsible for collecting tax at the time of notification based on the rates determined over the declared assets and declaring and paying this tax to the tax office to which they are affiliated until the end of the fifteenth day of the month following the notification.
The tax rates are; 1% for notifications made until September 30, 2022, 2% for notifications made between October 1, 2022 and December 31, 2022 (including this date) and 3% for notifications made until March 31, 2023. In addition, the rate to be applied shall be 0% in the event that the reported assets are held in the accounts for at least one year starting from the date of their transfer to the accounts in banks or intermediary institutions in Türkiye or the date of deposit of the assets brought from abroad in these accounts.
Another amendment regarding asset peace is related to the registration of assets. Prior to the amendment, taxpayers keeping the legal books on a balance sheet basis could freely dispose of the special fund accounts opened under the liabilities for the assets recorded in their legal books. From now on, it is regulated that the funds opened under the liabilities for the purpose of recording the aforementioned assets shall not be withdrawn from the fund until two years after the date of notification and declaration and shall not be used for any other purpose other than capital contribution. Independent professionals keeping an income book or those keeping legal books based on the operation account method, while previously being able to dispose of the assets subject to asset peace after registering them in their legal books, it is now stipulated that they shall not be withdrawn from the enterprise until two years have passed from the date of notification or declaration.
Another amendment to the legislation allows those who are not responsible for paying income and corporate tax to benefit from domestic asset peace. Accordingly, those who are not responsible for paying income and corporate tax shall be able to benefit from asset peace by depositing their assets other than immovable property in banks or intermediary institutions as of the declaration date at the latest, without requiring other conditions.
Along with the amendments, a new regulation regarding the title deed fee is also introduced. Accordingly, no title deed fee shall be charged for the transfer of immovables declared and included in the business asset records within the scope of the domestic asset peace. In addition, since it is regulated that the transfer of such immovable properties shall not be considered as «disposal» within the meaning of “Income Tax Law” No. 193, the gain arising from the transfer of the immovable property shall not be included in the taxable income.
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