NEWSLETTER-2020-metin

303 TAX LAW nature of a “one-sided withholding liability”. Therefore, it may be al- leged that this new regulation will not have a reformative effect on the companies’ equity. 1 As it is summarized above, the new withholding tax regime is based on the assumption that there is a dividend distribution during the share buyback transactions. Accordingly, we believe that no with- holding tax liability should occur on the amounts to be paid to the full liable corporate taxpayers due to the fact that no withholding tax liability is envisaged for dividend distributions to be made between full liable corporate taxpayers. 2 Apart from this, the calculation method of the 2 years’ time period indicated in the Law is not clarified yet. It is also unclear whether the new rule will be implemented to the former share buyback transac- tions concluded before the promulgation of the Law no. 7256. Taxpay- ers also require additional explanations regarding the implementation of the new rule in terms of restructuring projects such as mergers and spin-offs. Conclusion The purpose of the regulation, introduced by the Law No. 7256 and envisaging withholding tax for share buyback transactions, is stated in the justification of the aforementioned regulation as prevent- ing fully taxpayer capital companies from distributing their profits without tax through share buybacks. However, the TCC does not de- fine payments made by the company to its shareholders during share buybacks as dividend. Therefore, it is thought that a new inconsistency has been created between the TCC and tax practices through the new regulation. 1 Kahraman, Abdülkadir: “ Yeni Bir Vergi Güvenlik Önlemi ”, https://www.vergi- degundem.com/tr_TR/makale?categoryName=Vergide&publicationNumber=12 &publicationYear=2020&publicationId=4946944 (Access date: 02.12.2020). 2 Sağlam, Erdoğan : “ Torba yasada tartışmalı hüküm: Kendi hisselerini satın alan şirketler bazı durumlarda yüzde 15 vergi ödeyecek ”, https://t24.com.tr/ yazarlar/erdogan-saglam/torba-yasada-tartismali-hukum-kendi-hisselerini-satin- alan-sirketler-bazi-durumlarda-yuzde-15-vergi-odeyecek,28634 (Access date: 02.12.2020).