Corporate tax reduction for firms going public on stock market

HAZAL ATEŞ
ISTANBUL
Published 05.10.2017 20:00

The government is preparing to offer tax reductions with a view to supporting entry into capital markets and the Cabinet will have the authority to reduce the rate of the corporate tax for companies that go public and increase their capital by up to 75 percent

The government is taking down the corporate tax to support entry into capital markets. The Cabinet will be authorized to reduce the corporate income tax rate for companies by up to 75 percent with the regulation, which encourages small businesses to both increase capital and go public. This step is meant to contribute to the strengthening of capital markets. The general corporate Tax will remain at 20 percent.

Finance Minister Naci Ağbal said yesterday that the government will raise the contribution rate stipulated in the Law on Corporate Tax by 15 points for investment expenses by companies operating in the manufacturing industry and having or slated to have incentive certificates in 2018. He also said a 100 percent corporate tax reduction will be provided for investment expenditures in the industry for next year

Relevant projects and successful and popular TV series as well as large companies will be traded on the stock market. Financial obligations that adversely affect the effective fulfillment of intermediary functions, encourage companies to leave the system and create unfair competition in favor of financial institutions resident abroad, will be softened and gradually be reduced taking into account publicly funded fiscal burdens, public balances and economic developments.

By reviewing the Tax Procedural Law in full, valuation provisions and the resolution of disputes, especially the increasing deterrence of tax penalties, will be made compatible with the modern tax system. In this context, the reduction will also be made to corporate tax.

According to the omnibus bill submitted to Parliament, the provision reserved by financing companies can be deducted from the tax. The tax exemption will also be applied to the income of non-performing real assets. The application of value added tax (VAT) return issued due to construction expenditures made this year because of the manufacturing industry investments will continue to be implemented in 2018, as well.

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