ERDEM-NEWSLETTER-2018-metin

359 TAX LAW However, the above-mentioned office buildings may be trans- ferred through partial spin-off transactions, provided that they do not constitute a physical or technical integrity with the manufacturing and service business lines of the company, nor have the same nature as the sole manufacturing business line of the company. Draft Communiqués The Revenue Administration published a draft communiqué regarding partial spin-off transactions in its official website on 24.03.2017. Subsequently, the draft communiqué has been removed from the official website. However, the Revenue Administration con- tinues to work on the draft communiqué. As a result of the analysis of the draft communiqué, it is ob- served that some additional restrictions that are not stipulated under Article 19 of the CTC, have attempted to be imposed in relation to the transfer of real estate through partial spin-off transactions, and the referred restrictions are in line with the above-mentioned rulings of the Revenue Administration. The perspective acknowledged in the draft communiqué states that only real estate, which is not used in the essential manufacturing and service business lines of a company, may be subject to a partial spin-off transaction. Also through the examples indicated in the draft communiqués, it is emphasized that that real estate which constitutes physical or techni- cal integrity with the manufacturing and service business lines of a company and not being able to be separated from the referred business lines cannot be subject to partial spin-off independently. Evaluations As indicated in the former sections of this article, assets defined as “immovable property/real estate” as per the provisions of the Civil Code, may be transferred through partial spin-off in line with the CTC rules without any other restrictions. However, various other restric- tions, contrary to the “legality of tax” principle, are introduced to the partial spin-off of the real estate through draft communiqués and rul- ings prepared by the Revenue Administration.