New Law No 7144 (the Law) amending the Turkish Tax Procedure
Code was published in the Official Gazette on May 25 2018.
Through this Law, Temporary Article 31 was added to the Turkish
Tax Procedure Code.
The Law allows individual and corporate income taxpayers
whose tax base is determined on the basis of balance to
revaluate the immovables registered in their legal books with a
reduced tax rate. It is required under the Law that 5% tax is
paid on the increase in value of the immovables and that the
revaluation of the immovables is conducted by September 30
The scope of the regulation on the revaluation of
All resident individual and corporate income taxpayers whose
tax base is determined on the basis of balance fall within the
scope of the regulation on the revaluation of immovables.
Nevertheless, the regulation does not apply to all taxpayers.
Those not included are:
- Financial institutions and banks;
- Insurance and reinsurance companies;
- Retirement institutions and retirement
- Those actively engaging in the trading and
production of machined gold and silver; and
- Those who have been permitted to keep
their legal books on the basis of a foreign exchange.
Immovables which are not within the scope of the
The temporary provisions only cover immovables which are
registered in the legal books of the taxpayer. However,
machinery and intangibles are not within the scope of the
revaluation and it is not possible for such assets to benefit
from the temporary provisions.
In addition, the following immovables are not considered
within the scope of regulation:
- Immovables subject to sell-rent-buyback
- Immovables subject to the issuance of a
Conditions for the revaluation of immovables
The following issues should be considered in the revaluation
- For the purpose of revaluation, the value
and the depreciation of the immovables stated in the legal
record book and determined according to the valuation
provisions of the Tax Procedure Code will be considered;
- The value of the immovables after the
revaluation will be calculated by taking the determined value
of the immovables and the depreciation amount related to them
and multiplying them by the revaluation rate; and
- The increase in the value of the immovable
assets as a result of the revaluation will be shown in the
liabilities on the balance sheet of a special fund account,
which will show the value increases of each of the revalued
immovable items in detail.
Tax payable related to revaluation of immovables
Tax will be calculated at 5% of the amount of the value
increase as shown in the liabilities on the balance sheet of
the special fund account. This must be declared to the tax
office by the 25th day following the date of the revaluation,
and must be paid within the same period.
Individual and corporation income tax to be paid in this
context will not be regarded as an expense in determining the
tax base. If the declaration is not made on time, or if the
accrued tax is not paid by the due date, it will not be
possible to benefit from the temporary provisions on the
revaluation of immovables.
Alienation of the revaluated immovables
It is worth mentioning that in cases where immovables
subject to revaluation are alienated, the value increases shown
in the special fund account will not be taken into account in
determining the tax base.
However, except for additions to the capital, any part of
the value increase showing in the special fund account which is
transferred to another account or withdrawn from the account
will be subject to individual or corporate income tax
irrespective of the tax period.
Burçin Gözlüklü (firstname.lastname@example.org)
and Ramazan Biçer (email@example.com)
Tel: +90 216 504 20 66