Notable developments: Valuable residence tax liability postponed
Posted in Banking and finance
Turkey’s valuable residence tax has been the subject of nationwide discussion and debate since it entered into force on December 7, 2019. Recent legislation passed by the government takes several steps to smooth over issues raised during the implementation phase of the valuable residence tax. Law No. 7221 on Geographical Information Systems and the Amendment of Certain Laws, which entered into force on February 20, 2020, introduces several changes to the valuable residence tax, including most notably and without limitation, the following:
Commencement of tax liability
- Commencement of tax liability is postponed to 2021.
- If the building tax value exceeds TL 5,000,000 in 2020 and unless exempted, taxpayers will file a tax return by February 20, 2021. The arising tax liability will be payable in two installments, with the first installment due by the end of February 2021 and the second by the end of August 2021.
Determination of tax value
- Tax value assessments carried out by the General Directorate of Land Registry in 2019 are no longer applicable
- The General Directorate of Land Registry no longer has the authority to carry out value assessments
- The tax base (vergi matrahı) used to calculate the tax amount shall be the portion of the building tax value (bina vergi değeri) in excess of TL 5,000,000. Building tax value will be calculated pursuant to the Real Estate Tax Law No. 1319.