350 NEWSLETTER 2021 Law Amending Tax Laws, Certain Laws and Certain Decree Laws numbered 7013, (“Law No. 7103”) on 27.03.2018, a new paragraph was added to Article 61 of the ITL titled “Description of Salary and clarified that any payments made after terminating an employment agreement, including compensation made within a mutual rescission agreement or abrogation agreement, job loss indemnities, compensation for job security, or severance allowances, will also be classified as a salary. Withholding is regulated under Article 94 of the ITL. Pursuant to this article, public agencies, public economic organizations and other institutions, commercial companies, joint ventures, associations, foundations and their commercial enterprises, traders, and self-employed persons who are obliged to state their real income, must withhold the income taxes of the beneficiaries in the payments listed in the article. Salaries paid to employees and payments listed in Article 61 that are considered to be salaries -not including exceptions- are considered payments to be withheld. Tax withholding is determined according to graduated tariffs calculated through Article 103 and 104 of the ITL. As per Article 25 of the ITL, some compensations and benefits are exempted from income tax. Severance payments are one example. The exemptions from income tax have been increased through the amendment of this article in 2018 and 2019 by Law No. 7103 and The Law Amending the Income Tax Law and Certain Other Laws numbered 7162 (“Law No. 7162”). Pursuant to these new laws, payments and benefits such as compensation of non-reinstatement, death, disability and sickness compensations, compensations paid within the scope of a mutual rescission agreement, job loss indemnities, severance allowances, and job security indemnities, are exempted from income tax (up to the legal cap of the severance payment). Any payments and benefits which exceed the cap are still subject to income tax. Regional Administrative Court Decisions Subject to the Decision The conflicting decisions of the Regional Administrative Court are included in the Decision along with the reasoned decisions of the courts of the first instance. Within this context:
RkJQdWJsaXNoZXIy MjUzNjE=