Finance Minister Mehmet Simsek commented on the ongoing preparations for the implementation of the minimum corporate tax regime.
Simsek highlighted that global efforts are underway to impose a minimum corporate tax on multinational companies.
“It is inevitable to regulate the imposition of a minimum corporate tax on multinational companies operating in Turkey. Otherwise, taxes that are not collected in our country will be collected by other countries,” he said.
“More than 30 countries have legalized the practice.”
Simsek noted that in 2021, around 140 countries agreed to a global minimum corporate tax under the leadership of the Organisation for Economic Cooperation and Development (OECD).
“According to the agreement, multinational companies with annual consolidated revenues exceeding 750 million euros will be subject to a minimum corporate tax rate of 15 percent on branches, subsidiaries and establishments located in low-tax jurisdictions. In this regard, more than 30 countries, mainly European Union (EU) member states, have legalized the implementation of a minimum corporate tax regime applicable to revenues in 2024,” he said.
Simsek said legislative efforts are underway in other countries as well, explaining the details of the application.
“Countries which have legalised a minimum corporate tax regime can collect the tax difference if the corporate tax burden paid by multinational companies in the country where they operate is less than 15 percent. The right to collect the tax difference lies primarily with the country where the company operates. In countries without a minimum corporate tax regime, the country where the company is headquartered can collect this tax,” the minister said.
“In the absence of a minimum corporate tax regime, tax can be levied in third countries where companies belonging to the same group operate. The model aims to ensure that the profits of multinational companies are subject to a 15 percent tax burden in any case,” he added.
“It needs to be done in order to maintain the taxing power.”
Simsek stressed the need to implement a minimum corporate tax in Turkey to avoid transferring taxing rights to other countries.
“There are many multinational companies operating in our country. It is inevitable to regulate the imposition of a minimum corporate tax on multinational companies operating in Turkey. Otherwise, taxes that are not collected in our country will be collected in other countries.”
Simsek stressed the need to implement a minimum corporate tax in Turkey to maintain taxing powers, saying efforts are underway and preparations are in the final stages.
“2.5% exceeds the €750 million threshold.”
Simsek said there are around 80,000 internationally funded companies in Turkey, of which 2,134 are headquartered abroad.
“Only around 2.5 percent of multinational companies investing in our country exceed the 750 million euro threshold. Alternative models are being considered on how to preserve the tax benefits they receive and how to utilise them in different sectors. As a ministry, we will continue to work closely with the Ministry of Industry and Technology to develop alternatives to promote investment in our country,” he said.
Following the announcement, Minister Simsek shared on his social media accounts: “Further measures are underway to make the tax system fairer and more efficient.”
Source: Newsroom
