NEWSLETTER-2020-metin

325 TAX LAW Tax Reduction for Tax-Compliant Taxpayers In Light of Current Developments* Att. Özge Kısacık Throughout the world, studies have been carried out to develop ways to increase the timely payment of taxes accrued in Turkey. In this context, a solution for taxpayers who declare and pay their taxes on time was identified, and the “Tax Reduction for Tax-Compliant Taxpayers” application, which is regulated in the repeated Article 121 of the Income Tax Law (“ITL”), was enacted through Article 4 of Law No. 6824 dated 23.02.2017 (“Law No. 6824”). Through the enforce- ment of this Regulation, 5% of the taxes calculated on tax returns may be deducted from the income or corporate taxes that are required to be paid. This incentive for tax-compliant taxpayers is applicable for annual corporate and income tax returns that are submitted after 1 January 2018. However, failure to pay within one month will not mean that the legal remedy has not been abandoned. The applications of the related Regulation, many cases and disputes have been brought to the fore- front. For this reason, many amendments have been made to the Ar- ticle in order to achieve the main purpose of the Regulation. The latest amendments have been made through Law No. 7194. In this Article, the tax reduction for tax-compliant taxpayers is evaluated by taking new amendments into consideration. The Scope of Tax Reduction for Tax-Compliant Taxpayers The tax reduction for tax-compliant taxpayers has been imple- mented for annual corporate and income tax returns to be submitted after 1 January 2018. However, this reduction cannot be applied for all taxpayers who declare and pay their taxes on time. In the light of Article 121 of the ITL, benefiting taxpayers are set forth below: * Article of February, 2020