The government prepared a new draft law of income tax to be legalized on June 30th 2016 by joining the income tax and corporate tax law. Presentation of this draft was made in Turkish Grand National Assembly Parliament’s Planning and Budget Commission last week. The law draft will be examined by sub-commission as of today.
In the new income tax law; there are regulations about present exceptions removed or narrowed for the ones selling or renting real estate properties.
According to the body of our current law, if someone sells a real estate after 5 years expired, he/she doesn’t have to file income tax return because of capital gains.
With the new income tax law, this exception will be applied as it follows;
- 40% of the value received for the ones held more than two full years,
- 50% of the value received for the ones held more than three full years,
- 60% of the value received for the ones held more than four full years,
- 75% of the value received for the ones held more than five full years, held exceptional from the income tax.
In case of being held more than five years, according to the current law; assessment application is removed and regulations are made enabling 25% of the value received to be taxed.
In the application of this exception, it is considered as acquired, real estates assigned to cooperative societies’ partners in their assignment date; real estates acquired by leasing in the date when lease term is signed. As the date of acquisition, building or independent parts acquired quid pro quo land will be taken into consideration as the date it is handled to the receiver.
Lump sum application is removed for business owners and narrowed for real estate owners.
In the current income tax, rented real estate without its being an office or residence being taken into consideration 25% of the value received is considered as lump sum. There is no obligation of production of incentive document in any kind about the amount considered as lump sum.
With new income tax law;
It is seen that the restrictions are made by resolutions for the places rented as Office, lump sum application is removed completely, for the ones monetizing from residents;
- For the ones up to 30.000 TL income, 25%
- For the ones between 30.000 – 69.000 TL income 15% lump sum maximum rate limit is set,
- For the ones whose income is over 69.000 TL, they will not be able to make use of lump sum procedure.
According to 2015 price list, in current situation, there was no tax to be paid for 126.560 TL yearly office rental income, in new case, for gross 126.500 TL office rental incomes, the tax to be paid is 11.074 TL.
It is obviously seen that the changes to be made will increase the burden of tax of the taxpayers. While voluntary tax compliance and spreading the tax to basis is aimed, for how much extra tax incomes are these regulations have been trying to come alive?
“Are we doing more harm than good? Are we going farther and fare worse?”