The ruling Justice and Development Party (AK Party) submitted on Monday a bill to Parliament aiming to limit some tax exemptions and make changes to special consumption tax (ÖTV) applications for certain vehicles, a draft of the law showed.
The bill proposes broadening the authority of the president to determine and change special consumption tax levels for motor vehicles according to engine size, range and battery capacity.
The proposed readjustments to the special consumption tax thresholds will not change the market prices of motor vehicles, the draft said.
The draft bill, titled "Law on the Protection of the Value of Turkish Currency and the Proposal for Amendments to Certain Laws," also postulates that the application of reduced corporate tax is limited to a maximum of 10 accounting periods, including the first accounting period in which the right to deduction can be used. The discount rate has been determined to be 60%.
The bill targets fighting against informality, strengthening tax justice, limiting deductions and exceptions, and increasing the share of direct taxes in tax revenues.
The special consumption tax base thresholds and rates of some fossil fuel-powered passenger cars and some hybrid cars that use both fossil fuels and have an electric motor are also being changed. The tax rates to be collected according to the engine cylinder volume and electric motor power will vary between 80% and 220%.
It is envisaged that the expressions "engine cylinder volume, range, battery capacity" will be added after the current expression "engine power" among the elements to be taken into consideration in determining the special consumption tax rates to be applied to vehicles, the draft says.
With this regulation, different tax rates can be determined for the vehicles with the number 87.03 G.T.I.P. in terms of their engine cylinder volume, range and battery capacity.
For off-road vehicles that are classified as pickup trucks and whose maximum load mass does not exceed 3,500 kilograms (7,716.18 pounds), the ÖTV rate of 50% would be applied. On the other hand, for example, a rate of 150% would be applied for hybrid vehicles with an electric motor exceeding 100 kW and an engine volume over 2,500 cm³.
The bill, which was submitted to Parliament for approval, needs to be approved and published in the Official Gazette to come into force.
