We are approaching the final days for the submission of the 2024 Corporate Tax Return for taxpayers who are subject to corporate tax, as economic activities are carried out by capital companies (limited liability companies, joint-stock companies, and limited partnerships with shares), cooperatives, economic public institutions, associations, or foundations that own economic enterprises or joint ventures.
The 2024 Corporate Tax Return must be submitted via the Digital Tax Office by Wednesday, April 30, 2025, no later than 23:59, and the calculated corporate tax must be paid in a lump sum within the same period.
As we approach the deadline for submitting the corporate tax return, we would like to remind our company partners of certain rights and obligations they should consider:
- Please remember to submit the 2024 Corporate Tax Return by Wednesday, April 30, 2025, no later than 23:59, and ensure that the calculated corporate tax is paid in a single payment within the same period.
- When offsetting carried-forward losses from previous years, ensure compliance with both the five-year time limit and the procedural requirements. Otherwise, you may lose your right to offset losses for formal reasons.
- Ensure that the exemptions and deductions permitted by law are applied in accordance with the formal and other conditions.
- Some exemptions and deductions are applicable only when there is corporate profit, while others can be deducted even if there is a loss. Pay attention to the distinction clearly indicated in the return.
- Do not forget to include the interest deduction arising from the cash capital increase you are entitled to for both 2024 and prior years in your return.
- If you have earned income from foreign subsidiaries or branches in 2024, ensure that the conditions for exemption are met, and transfer the relevant income to Türkiye by the deadline for submitting the return.
- If you have contributed to the aid and donation campaigns initiated by the Office of the Presidency, remember that you can deduct the entire donation from the corporate income.
- Due to economic fluctuations, do not forget to set aside provisions for doubtful receivables that have become doubtful for collection in 2024. If no provision is made this year, the tax authority will not accept provisions made next year.
- Income generated from construction, repair, installation work, and technical services performed abroad, which are recorded in Türkiye’s legal records, is exempt from corporate tax, and it is not mandatory to transfer this income to Türkiye’s. To benefit from the exemption, make sure it is transferred to the general result accounts in Türkiye.
- Check your eligibility for the 5% corporate tax discount available to tax-compliant taxpayers. Do not overlook your entitlement.
- If there is a profit from the sale of fixed assets in the company, the profit can be held in a provision account until the end of the third year following the sale and not added to the corporate income if used for purchasing similar assets.
- The general corporate tax rate applicable to corporate profits for the year 2024 is 25%, while the rate for banks and other financial institutions is 30%. If some of your profits are subject to a reduced corporate tax rate, you may pay corporate tax at a rate between 18% and 24%.
- Do not forget to offset the portion of foreign taxes paid that is eligible for deduction, the taxes withheld during the year, and the advance tax payments made either in cash or by offsetting against the calculated corporate tax.
- If the amount to be offset exceeds the calculated corporate tax on the return, the difference will be notified to you by the tax office, and you can apply for a refund or rejection within one year from the date of notification. The offset refund process can be carried out based on the date of submission of the annual corporate tax return, provided all required documents are completed.
- If the amount to be refunded for taxes paid through withholding does not exceed 340,000 TL in 2025, the refund request will be processed without the need for an audit report or guarantee, provided that the request is submitted with the necessary documents (1A) and the application is complete.
- It is advisable to review the transactions subject to inflation adjustment one last time. Re-evaluate the records and outcomes in light of the potential risk of a tax audit.
- The corporate tax exemption for Foreign Exchange Protected Deposit Accounts has been removed as of June 30, 2024. However, for accounts opened before this date and whose maturity date is after June 30, 2024, the exemption will continue until the maturity date for foreign exchange gains and interest income.
- To avoid potential tax audits that may arise from the information provided in the return, ensure that the VAT and depreciation calculations are done for cash and partners’ current accounts that have high balances.
- Following the legal changes made in 2024, precious metals such as gold, silver, platinum, and palladium in the company’s assets must be valued at market prices. Do not forget to make the valuation for the first time this year from a tax perspective.
Lastly, if you assess that some of the regulations in the secondary legislation published by the Ministry of Treasury and Finance are not in compliance with tax laws, and therefore the declared income is not in accordance with the law, do not forget to submit your 2024 Corporate Tax Return with a qualified reservation.
In this context, you may exercise your right to legal action and request your right to be taxed according to the law by filing a lawsuit at the tax court within 30 days for matters such as inflation adjustment, cash capital deduction, financing expense limitation, the 5% tax discount for compliant taxpayers, etc.
Finally, we would like to remind you that the 10% domestic minimum corporate tax rate application for corporate taxpayers will begin as of the first quarter of this year.
For detailed information and professional support during the compliance process, feel free to contact us.
This Legal Alert has been prepared for general information purposes only on current legal issues, and the evaluations contained in this Legal Alert do not constitute legal advice or a legal opinion. It is not possible to impose any liability on SRP-Legal Law Office due to the content of this Legal Alert. It is recommended to obtain the opinion of a legal advisor regarding your questions and enquires within the scope of this Legal Alert.
