Tax legislation related to "Public Interest Association" benefits for corporations

BEDD is a public-interest association in accordance with the Cabinet's resolution No. 5912 of 7/11/2003. For this reason, donations granted are within the scope of tax reductions.

Relevant Articles:

4. Donations and aids provided against receipt with a rate not exceeding 5% of declarable annual income (10% for regions prioritized for development) to general and special budget public administrations, special provincial administrations, municipalities, villages and associations working for public interest, and foundations exempted from tax by the Council of Ministers.

6. The total cost of food, cleaning, clothing and fuel (**) donated to the associations and foundations engaged in food banking activities for aid to the poor within the framework of the procedures and principles determined by the Ministry of Finance (annotation amended with Article 43/8-d of Law No. 5281. Validity; 01.01.2005, Enforcement; 31.12.2004).

Law Text:

Law: INCOME TAX LAW
Article Name: Other reductions
Article No: Article 89

(Article amended with its title by Article 28 of Law no. 5228. Enforcement; 31.07.2004) In determining the income tax basis, the following deductions can be made from income to be declared in the income tax declaration:

(subparagraph amended by Article 8 of Law no. 6327; Validity 01.01.2013)1. On the condition that it doesn't exceed 15% of the declared income and annual sum of the minimum wage (In the determination of this condition, the total amount of contributions paid to the private pension system by the employers on behalf of the wage earners and the total amount of the premium payments to be subject to reduction within the scope of the subparagraph (3) of the first paragraph of Article 63 shall be considered.), 50% of the premiums payed for the life insurances of the taxpayer, his wife and young children, and personal insurance premiums including death, accident, diseases, health (annotation amended by Article 1 of Law No. 6462. Enforcement; 03.05.2013), disability (8), maternity, birth and charge (If the insurance is arranged in the presence of a retirement or insurance company located in Turkey and with headquarters in Turkey; premium amounts are payed in the year when the income was earned; and the charges of wage earners is not reduced during the calculation of the net amounts, relevant premiums of such are reduced from personal incomes when the wives and children provide a declaration individually.).

The Council of Ministers shall be entitled to reduce the rates set forth in this paragraph to two times by the end of the year and to re-determine the amount in a way that it shall not exceed the annual amount of the minimum wage by more than two times.(7)

2. Provided that (Annotation amended by Article 43/8-c of Law No. 5281 Validity; 01.01.2005, Enforcement; 31.12.2004) it shall not exceed 10% of the declared income (*), and that it is concluded in Turkey or that the obligation of income or corporation income tax is certified with documents to be provided by the relevant real or legal persons, education and health expenses of the taxpayer, his wife and young children (wage earners who have benefited from tax reduction for education and health expenses within the scope of repeating Article 121 are not allowed to reduce their expenses from their tax assessment based on this provision).

3. Annual reduction calculated based on the provisions in Article 31 for the declared incomes of the disabled (9), who is self-employed or taxed based on simple earnings (annotation amended by Article 1 of Law no. 6462. Enforcement; 03.05.2013) (This reduction also applies to self-employed persons or employees (including withholding basis) liable to look after a disabled person (10) (annotation amended by Article 1 of Law no. 6462. Enforcement; 03.05.2013)).

4. Donations and aids provided against receipt with a rate not exceeding 5% of declarable annual income (10% for regions prioritized for development) to general and special budget public administrations, special provincial administrations, municipalities, villages and associations working for public interest, and foundations exempted from tax by the Council of Ministers.

5. Expenses of the construction of schools, healthcare facilities, and student's dormitory with at least hundred bed capacity (fifty bed in regions prioritized for development), children's home, orphanages, nursing homes, care and (annotation amended by Article 9 of Law no. 6322; Enforcement 15.06.2012) rehabilitation centers, as well as houses of prayer to be subject to the permission and supervision of local authorities and facilities providing religious training under the supervision of the Directorate of Religious Affairs (6), youth centers of the Ministry of Youth and Sports and scouting camps (the state added article 5 of the Law No 6525. Effective date 2.27.2014) which are donated to general and private budget public institutions, provincial special administrations, municipalities and villages, and all kinds of donations and aids for the construction of such buildings, as well as all cash and real donations and aids provided for the sustainability of existing buildings.

6. The total cost of food, cleaning, clothing and fuel (**) donated to the associations and foundations engaged in food banking activities for aid to the poor within the framework of the procedures and principles determined by the Ministry of Finance (annotation amended with Article 43/8-d of Law No. 5281. Validity; 01.01.2005, Enforcement; 31.12.2004).

7. 100% of the following expenses and related donations and aids for the following, which are performed by general and private budget public foundations, special provincial administrations, municipalities, villages and organizations working in the interest of public, foundations exempted from tax by the Council of Ministers, and organizations and institutions conducting scientific researches, or which are supported or deemed appropriate to support by the Ministry of Culture and Tourism;

a) For the organization of national or international, non-commercial cultural and art events,

b) For the preparation, domestic and abroad distribution and promotion of the visual, audio and written materials such as books, catalogs, brochures, movies, records, and products of magnetic, electronic and information technology including CD and DVD, which are related to the culture, art, history, literature, architecture and intangible cultural heritage of our country's civilization or the for the promotion of the country,

c) For protection and electronic transfer of writing or rare works and, providing these works for the collection of the Ministry of Culture and Tourism,

d) For the maintenance, repair, survival, survey, restoration, restitution projects and transfer operations of the immovable cultural assets within the scope of the Code of Protection of Cultural And Natural Properties no. 2863,

e) For rescue excavations, scientific excavation works and surface studies,

f) For on-site preservation of immovable cultural Turkish assets in foreign countries or operations to bring these cultural assets to Turkey,

g) For activities on the generation of cultural inventory,

h) For enabling transfer movable cultural assets, as well as products and works in the fields of fine arts and contemporary and traditional handcrafts specified within the scope of the Law no. 2863 to the collection of the Ministry of Culture and Tourism, and ensuring their preservation,

i) For the production and events related to abstract cultural heritage, fine arts, cinema, contemporary and traditional handcrafts, and construction, maintenance, repair and material supply of research, education or practice centers working in these fields, workshops, studios and movie stages, as well as movie production,

j) For the construction, renovation or modernization works of the library, museum, art gallery and culture center and facilities where cultural and artistic activities such as cinema, theater, opera, ballet and concert are exhibited,

(The Council of Ministers shall be entitled to reduce this rate by half or to raise it to the statutory rate in terms of territories and types of activities).

8. Sponsorship expenses within the scope of Law on Organization and Duties of the General Directorate of Youth and Sports no. 3289 as well as the Law on the Foundation and Duties of Turkish Football Federation no. 3813 dated 17.6.1992; all amount for amateur sports and 50% for professional sports.

(subparagraph removed by Article 15 of Law no. 6728; Enforcement 09.08.2016)(12)

10. (subparagraph amended by Article 92 of Law no. 6552. Enforcement; 11.09.2014) All real and cash donations made against receipt to aid campaigns initiated by the Prime Ministry or the Council of Ministers.(11)

11. (subparagraph added by Article 3 of Law no. 5904. Enforcement; 03.07.2009) Excluding commercial enterprises, all cash donations and aids provided against receipt to Turkish Red Crescent Society (annotation added by Article 9 of Law no. 6322; Enforcement 15.06.2012) and Turkish Green Crescent Society (7).

(subparagraph added by Article 9 of Law no. 6322; Validity 15.06.2012)12. According to the Article 325/A of the Tax Procedures Law, the proportion of the amounts allocated as venture capital fund, not exceeding 10%.

(subparagraph added by Article 9 of Law no. 6322; Validity 15.06.2012)13. 50% of the revenues earned exclusively from following operations by the institutions which provide education and healthcare services subject to the permission and supervision of the relevant ministry and offer services to people who are not living in Turkey, as well as service institutions providing architecture, engineering, design, software, medical reporting, accounting (annotation amended by Article 15 Law no. 6728; Enforcement 09.08.2016), call center, product testing, certification, data storage, data processing and professional training (13) in fields specified by the Ministry of Finance by taking the opinions of relevant ministries to people who are not resident in Turkey and to those living abroad with office and headquarters located in foreign countries. In order to benefit from this discount, the invoice or similar document must be issued in the name of the customer abroad. The Council of Ministers is entitled to increase by 100% or reduce to zero of the rate specified hereby, in respect of parties receiving services (annotation added by Article 15 of Law no. 6728, Enforcement 08.09.2016) and amounts of income; and the Ministry of Finance is entitled to determine the principles and procedures concerning the implementation and supervision of this subparagraph by taking the opinions of relevant ministries.

(subparagraph added by Article 7 of Law no. 6518. Enforcement; 19.02.2014) 14. Reduction for sheltered workshops by 100% of the gross annual amount of the wage payment including the amount met by other persons and institutions for mentally disabled people who are challenged to integrate in the labor market and employed in sheltered workshops founded under the Disability Law no. 5378, dated 1/7/2005 (The deduction is for a maximum of five years for each disabled employee and the annual deductible shall not exceed 150 percent of the annual gross amount of the minimum wage for each disabled employee.). The Council of Ministers is entitled to increase by 150% or decrease again to the legal rate of such rate specified in this subparagraph in accordance with the level of disability; the Ministry of Finance is entitled to determine the principles and procedures concerning the implementation of this subparagraph upon taking the opinions of the Ministry of Family and Social Policies and the Ministry of Labor and Social Security.

If donation and aid are not made in cash, the value to be awarded shall be the value to be determined by the Appreciation Commission according to the provisions of the Tax Procedure Law, if the property or right of donation or assistance is the case. (***)

(subparagraph added by Article 2 of Law no. 6663. Enforcement; 01.01.2016) 15. The portion of the commercial earnings determined in simple procedure up to 8,000 TL per annum (Those who benefit from the exception of the earnings in the 20th item of this law can not benefit from this clause. The Ministry of Finance is entitled to determine the principles and procedures concerning the implementation of this subparagraph).


(*) (Before change) not to exceed 5% of income
(**) (Before change) food items
(***) (Before change) to be calculated at 40% of the research and development expenses

(****)(Before change) 
Insurance Premium, grant and other discounts(1) 
ARTICLE 89-Taxpayers may deduct the following deductions from the income by notifying with annual declaration: 
1 . (subparagraph amended by Article 7 of Law no. 4697; Enforcement 07.10.2001) Provided that they don't exceed 10% of the income earned (5% of the declared income for personal insurance premiums other than the personal pension system) and annual amount of the minimum wage, contributions paid to the taxpayer himself, his wife and young children for the personal pension system including personal insurance premiums such as death, accident, disease, injury, maternity, birth and collection (If the insurance is arranged in the presence of a retirement or insurance company located in Turkey and with headquarters in Turkey; premium amounts are payed in the year when the income was earned; and the charges of wage earners is not reduced during the calculation of the net amounts, relevant premiums of such are reduced from personal incomes when the wives and children provide a declaration individually.),
The Council of Ministers is entitled to increase the 10% rate specified in this subparagraph by 20% (up to 10% for personal insurance policies other than the personal pension system) and re-determine the afore-mentioned rate provided that the rate doesn't exceed the two times of the annual amount of fee.(2)
2. (subparagraph amended by Article 46 of Law no. 4369; Enforcement; 1.1.1999) Donations and aids provided against receipt by legal or real persons to chambers included in the general budget, governments with a mixed budget, provincial special administrations and municipalities, villages and organizations working in the interest of the public, foundations exempted from tax by the Council of Ministers, organizations and institutions conduction scientific research and development activities, museums, movie theaters, operas, ballets, classical music, classical Turkish music and plastic art productions and events and private research, training and practice centers working in such fields, and international art organizations supported or deemed to be appropriate for supporting by the Council of Ministers. (The sum of donations and grants made during a calendar year shall not exceed 5% of the declared income for that year and 10% for the priority regions in development; if it exceeds no more deduction is made) 
(subparagraph added by Article 10 of Law no. 4842; Enforcement 24.04.2003) All expenditures on the construction of schools, healthcare facilities (5) and student dormitories with at least 100-bed capacity (fifty beds for regions prioritized for development) to be donated to the afore-mentioned public organizations and institutions (annotation amended by Article 17/E of Law no. 4962 Enforcement; 07.08.2003) and all kinds of donations and aids provided to these institutions for the building of these facilities, as well as all cash and real donations and aids for the sustainability of the existing facilities shall be deducted from incomes with an annual declaration. 
(subparagraph added by Article 14 of the Law no. 5035; Validity;01.01.2004, Enforcement: 02.01.2004) Total amount of the donations and grants provided for the organizations and institutions with registered monumental art works in order for the maintenance, repair, restoration and sustainability of the monumental old art works registered in the presence of the Cultural and Natural Heritage Preservation Board in the name of fused foundations under the administration and supervision of the General Directorate for Foundations as well as other organizations and institutions including municipalities is deducted from the declared income with an annual declaration. 
(subparagraph added by Article 14 of Law no. 5035; Validity; 01.01.2004, Enforcement: 02.01.2004) The total cost of food donated to the associations and foundations engaged in food banking activities for aid to the poor within the framework of the procedures and principles determined by the Ministry of Finance is deducted from the income declared with an annual declaration. 
If donation and aid are not made in cash, the value to be awarded shall be the value to be determined by the Appreciation Commission according to the provisions of the Tax Procedure Law, if the property or right of donation or assistance is the case. 
Taxpayers may be deferred to the collection of their 20% of the required annual income tax in the related period for not exceeding the amount of their own research and development expenditures during the year, and the tax for that period may be postponed for no interest for three years. This deferred tax shall be paid in equal installments together with the payment installments of the income tax within three years. 
The principles and procedures of this application shall be appointed and determined by the Ministry of Finance.(3) 
3. (subparagraph added by Article 46 of Law no. 4369 Enforcement; 1.1.1999) An annual discount calculated according to the principles set forth in Article 31 (4) of this Law shall be applied to the basic earnings (annotation amended by Article 36/1-a of Law no. 4842 Enforcement; 01.01.2004) of the disabled persons who are engaged in occupational activities or who are engaged in manufacturing, repairing and small arts business. This discount is applied to those who obtain self-employment and wage earners liable to look after a disabled person. The deduction is applied to the withholding base of the service person. 
4. (subparagraph added by Article 10 of Law no. 4842 Enforcement; 24.04.2003) It shall not exceed 5% of the declared income (*), and that it is concluded in Turkey or that the obligation of income or corporation income tax is certified with documents to be provided by the relevant real or legal persons, education and health expenses of the taxpayer, his wife and young children (wage earners who have benefited from tax reduction for education and health expenses within the scope of repeating Article 121 are not allowed to reduce their expenses from their tax assessment based on this provision). 
5. (subparagraph added by Article 4 of Law no. 5105. Enforcement: 13.03.2004) Sponsorship expenses within the scope of Law on Organization and Duties of the General Directorate of Youth and Sports no. 3289 as well as the Law on the Foundation and Duties of Turkish Football Federation no. 3813 dated 17.6.1992; all amount for amateur sports and 50% for professional sports. 
(1) (Title before change) Insurance policy, grant and donation deductions: 
(2) (2)(Before change by Law no. 4697) 1. (subparagraph amended by Article 63 of Law no. 3239) Premiums for personal insurances such as life, death, accident, sickness, disability, maternity, birth and collection of the taxpayer's person, partner and young child, provided that they do not exceed 5% of the declared income and the annual fee of the minimum wage for each person (Provided that the insurance is concluded in the presence of an insurance company located in Turkey and headquartered in Turkey and that it is paid within the year when the income is earned, and that it is not further deducted during the calculation of the net amounts if there are fees specified in the declaration, such insurance premiums are not deducted from the income of the head of the family if partners and children provide a separate declaration for their own incomes.) Those subject to narrow taxpayers can not deduct insurance premiums. 
(3) 2. (before change by Article 46 of Law no. 4369) (subparagraph amended by Article 63 of Law no. 3239) Donations and grants provided against receipt to chambers included in the general budget, administrations with mixed budget, special provincial administrations, as well as municipalities, villages, organizations working for the interest of the public and foundations founded as per the Turkish Civil Code. (If the sum of contributions and grants made within a calendar year exceeds 5% of declared income, it shall not be deducted excessively.) Expenditures on the construction of schools, mosques, kindergartens and sports facilities as well as dormitories with at least 50-bed capacity (35 beds for regions prioritized for development), nursing homes and healthcare centers, and donations and grants for the construction of these facilities as well as all kinds of cash and real donations and grants provided for the sustainability of existing facilities. All kinds of donations and grants made to institutions and organizations in scientific research and development activities. (The amount of the donations and aid provided in this paragraph and the places where such donations and aids are to be allocated and the institutions to be allocated shall be determined by a regulation to be issued by the Council of Ministers.) If the donation and assistance are not made in cash, the donation or contribution, if this value is not available, the value to be determined by the Appreciation Commission shall be taken as the basis of the provisions of the Tax Procedure Law. Taxpayers may be deferred to pay 20% of the annual income tax that they pay during the related period, not exceeding the amount of their own research and development expenditures they have made during the year, and the tax for that period may be postponed for no interest for a period of three years. This deferred tax shall be paid in equal installments together with the payment installments of the income tax within three years. The procedures and principles of this application shall be determined and determined by the Ministry of Finance and Customs. 
(4) (annotation before change by Law no. 4842) in subparagraph 2 of Article 31 in this law
(5) (5)(annotation before change by Law no. 4962) school

(6)(Before change by Law no. 6322) rehabilitation center

(7)(Before change by Law no. 6327) 1. Provided that they don't exceed 10% of the income earned (5% of the declared income for personal insurance premiums other than the personal pension system) and annual amount of the minimum wage, contributions paid to the taxpayer himself, his wife and young children for the personal pension system including personal insurance premiums such as death, accident, disease, injury, maternity, birth and collection (If the insurance is arranged in the presence of a retirement or insurance company located in Turkey and with headquarters in Turkey; premium amounts are payed in the year when the income was earned; and the charges of wage earners is not reduced during the calculation of the net amounts, relevant premiums of such are reduced from personal incomes when the wives and children provide a declaration individually).

The Council of Ministers shall be entitled to reduce the rates set forth in this paragraph to two times by the end of the year and to re-determine the amount in a way that it shall not exceed the annual amount of the minimum wage by more than two times.

(8) Annotation before change: injury

(9) Annotation before change: the disabled

(10) Annotation before change: disabled

(11) Subparagraph before change: 10. (subparagraph added by Article 14/b of Law no. 5436. Validity; 26.12.2004, Enforcement; 24.12.2005) All of the same or cash donations made against receipt by the Prime Ministry due to the natural disasters in the decision of the Council of Ministers.

(12) Before removal: 9. "R&D reduction", which will be calculated at 100% of the amount of research and development expenditures (****) for exclusively new technology and information seeking realized by the taxpayers within the context of the enterprises (the amendment to Article 5 of Law No. 5746).

R&D discounts are not calculated on the basis of the depreciation amounts calculated for the expenditures which are not directly related to the research and development activities and for the economic assets subject to depreciation which are not used completely in research and development activities. The Ministry of Finance is authorized to determine the documents and procedures necessary for the scope of expenditures to be benefited from the R&D discount and to benefit from the application.

(13)Annotation before change: call center and data storage service

  • Garanti Bankası
  • Branch: Maltepe Çarşı(742)
  • Account No: 6299766
  • IBAN TR870006200074200006299766
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