Are you ready for the Global Minimum Corporate Tax in Türkiye?
According to the statements made by the Minister of Treasury and Finance Mehmet Şimşek, the Global Minimum Corporate Tax will be among the tax regulations that will soon be submitted to the Grand National Assembly of Türkiye.
The Global Minimum Corporate Tax will affect multinational companies operating in Türkiye and large-scale Turkish companies operating abroad in different countries.
What is the Global Minimum Corporate Tax?
The Global Minimum Corporate Tax is one of the two outputs of the Base Erosion and Profit Shifting (BEPS) Project, which was launched in 2013 by the G20 and the OECD to prevent harmful tax competition between countries and destructive tax planning by multinational companies.
The global minimum corporate tax, adopted by 137 countries out of a working group of 141 countries, envisages a minimum level of taxation of the profits of multinational and large-scale companies operating in more than one country in an economic order that has entered a new phase through globalization and digitalization.
Accordingly, multinational companies with a total annual turnover exceeding 750 million Euros (26 billion 182 million Turkish Liras or 815 million 970 thousand US Dollars) from both domestic and foreign operations, their subsidiaries and branches should not have an effective tax rate of less than 15% in the countries where they operate.
Has the Global Minimum Corporate Tax entered into force in other countries?
It entered into force in European Union countries as of January 1, 2024. However, six countries have not fulfilled their obligations. These are Lithuania, Latvia, Poland, Cyprus, Portugal and Spain.
Canada, Japan, Malaysia, New Zealand, Korea, Switzerland, the United Kingdom and Vietnam are among the countries that have implemented the Global Minimum Corporate Tax.
The United States does not have any implementation plan for the near future.
Who will be affected by the Global Minimum Corporate Tax?
All multinational companies with a total global turnover of more than EUR 750 million are covered by the Global Minimum Corporate Tax.
The Global Minimum Corporate Tax will also cover large-scale Turkish companies with headquarters in Turkey but operating abroad and with a global turnover of more than EUR 750 million.
In this case, if foreign subsidiaries and affiliates are taxed at less than 15%, the Turkish Revenue Administration will collect the difference in Türkiye.