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Legal Alerts

Law No. 7256 Introduces Several Amendments to Tax Legislation

Legal Alerts

New Developments

The Law on the Restructuring of Certain Receivables and Amendments to Certain Laws No. 7256 (“Law No. 7256“) published on the Official Gazette No. 31307 on November 17, 2020 introduced several amendments to the tax legislation.

This alert provides a brief summary of the amendments we find important.

What Changes Does the Law No. 7526 Introduce?

  • With the amendment to Article 94 of the Income Tax Code No. 194 (“ITC“), taxpayers will be deemed to have distributed dividends for shares they acquired themselves and 15% of withholding tax will be applied on
    • the difference between the acquisition amount and face amount of the equity or the share, if they acquire the shares through a capital decrease, as of the date of the registration thereof to the trade registry;
    • the disposal amount, if they dispose of the shares in an amount below the acquisition amount, as of the date of disposal; and
    • the difference between the acquisition amount and the face amount of the equity or the share, if they neither acquire the shares through an capital decrease nor dispose of the shares within two years, as of the last day of the two-year period.
  • Provisional Article 67 of the ITC concerns the taxation of income derived from certain instruments. The amendment to Provisional Article 67 of the ITC expanded the definition of capital market instruments to include stocks and bonds, contracts concluded over currencies, precious metals and other assets determined by the Capital Markets Board. The amendment extends the implementation period of the article from December 31, 2020 to December 31, 2025.
  • The amendment to Article 32 of the Corporate Tax Code No. 5520 decreased by two points the corporate tax rate applied to the corporate income of companies with at least 20% of shares offered to the public through the Borsa Istanbul Stock Exchange for five accounting periods starting from the shares’ public offering date. However, banks, leasing companies, factoring companies, financing companies, payment and electronic money institutions, authorized foreign exchange institutions, asset management companies, capital market institutions insurance and reinsurance companies and pension companies cannot benefit from the discount.
  • The amendment to Provisional Article 17 of the Value Added Tax Code No. 3065 postpones the period of the deferral-termination implementation for goods to be utilized within the manufacturing of goods exported within the scope of the inward processing and temporary acceptance regime from December 31, 2020 to December 31, 2025.
  • The effective date of the accommodation tax was postponed to January 1, 2022.


The Law No. 7256 introduces significant provisions regarding the tax laws. We foresee hesitation regarding the application of withholding tax over companies’ acquisition of their own shares, and believe a general communiqué from the Revenue Administration would be vital for that matter to avoid any confusion.