Multinational firms in Türkiye to face minimum corporate tax

Türkiye is introducing a minimum corporate tax for multinational companies, following the lead of many developed countries, Treasury and Finance Minister Mehmet Şimşek has announced.

The move is expected to generate significant revenue for the country by taxing the profits of global companies operating in Türkiye.

“Additional steps to increase fairness and efficiency in taxation are on the way,” Şimşek said.

The minister recalled that 140 countries agreed in 2021 with the OECD to implement a minimum corporate tax on multinational companies.

“The consensus decision envisaged that branches, subsidiaries and workplaces of multinational companies with annual consolidated revenues exceeding 750 million euros [$814 million] in low-tax countries would be subject to a minimum corporate tax of 15 percent,” Şimşek said.

“In this context, more than 30 countries, mainly in the European Union (EU), have enacted the minimum corporate tax to be applied to profits in 2024. If the corporate tax burden paid by multinational companies in the country where they operate is lower than 15 percent,the countries that have enacted the minimum corporate tax will be able to receive the tax difference that the relevant country does not receive.”

“Multinational companies also operate in Türkiye,” the minister added.

“It is inevitable that an arrangement should be made to collect minimum corporate tax from multinational companies operating in Türkiye. Otherwise, the tax that our country does not collect will be collected by another country.”

There are around 80,000 companies with international capital operating in Türkiye, with 2,134 of them having their main activities abroad. Şimşek noted that only 2.5 percent of multinational companies investing in Türkiye exceeded the 750-million-euro threshold, making them subject to the new minimum corporate tax.

Prof. Binhan Elif Yılmaz stated that with the implementation of the new regulation, a balance can be achieved between the incentives, exemptions and derogations granted to multinational companies and the tax levied. Yılmaz emphasized that the effective corporate tax rate, which has decreased to 5 percent with incentives, will increase to at least 15 percent with the minimum tax regulation.

She pointed out that the minimum corporate tax set by the international agreement will be paid globally, preventing companies from relocating to zero-tax countries.

Noting that the regulation should be transferred into domestic law before the parliament closes, Yılmaz said that such international practices demonstrate the government’s compliance with international cooperation and that these steps will contribute positively to Türkiye’s exit from the gray list.

Commenting on the issue, Dr. Hüseyin Işık said, “With the minimum tax, tax competition among countries will be limited and the road to zero taxation will be closed. Türkiye is among the 130 countries that have signed the plan. It is a development that will benefit our country.”

Source: hurriyetdailynews

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button