Amendment to the Corporate Tax General Communiqué on Funds and Investment Partnerships
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The communiqué updates corporate tax guidance for Turkish funds and investment partnerships, especially real estate investment partnerships, on when income exemptions apply. It clarifies that advance dividends from income earned from 1 January 2025 count when calculating whether enough profit has been distributed. It also explains how real estate income should be calculated for the exemption: related costs and expenses must be deducted, shared expenses must be allocated between real estate and other activities, and depreciation must be split based on use. Funds and investment partnerships will need tighter accounting records to prove the profit distribution and cost allocation behind any exemption claim.
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Key Changes
- Advance dividends from income earned from 1 January 2025 are included in the profit distribution calculation.
- Real estate income for exemption purposes must be calculated after deducting related costs and expenses.
- Shared general expenses and depreciation must be allocated between real estate and non-real-estate activities using specified methods.
Obligations
What this law requires
When claiming the corporate tax exemption for income of Turkey-established funds and investment partnerships, include advance dividends related to income earned from 1 January 2025 onward in the calculation of profit distributions.
Calculate real estate income used for the profit-distribution condition by deducting the expenses and cost elements incurred because of the real estate activity from the revenue obtained from real estate.
If real estate activities are profitable but other activities are loss-making, and total profit is lower than the profit from real estate, distribute at least half of the total profit to satisfy the exemption condition.
Maintain accounting records capable of supporting the allocation of income, expenses, and costs between real estate activities and other activities when applying the corporate tax exemption.