TAG Tax

Author: Beyza Günsel Sürücü

Introduction

Law No. 7420 on the Amendment of Income Tax Law and Certain Laws and Decrees (“Law No. 7420“) which was published in the Official Gazette dated 09.11.2022 introduced important amendments and regulations in the tax legislation. The addition of Article 32/B, entitled "Taxation in Capital Decrease" to Corporate Tax Law No. 5520 ("CTL") was one of these important amendments. Previously, there was no clear regulation in Turkish tax legislation regarding the taxation of a capital decrease. As a matter of fact, there was a controversy between the tax administration and taxpayers regarding the issue of which elements of capital are used for capital reduction. Law No. 7420 clarifies the position of capital decreases in tax legislation and aims to end the controversy on the subject.

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