Mali Müşavir/CPA Evren Özmen
Global Minimum Corporate Tax (GMCT) Regulations in Turkey

Global Minimum Corporate Tax (GMCT) Regulations in Turkey

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Mali Müşavir Evren Ozmen
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Global Minimum Corporate Tax (GMCT) Regulations in Turkey

What is happening?

On June 20, 2024, Turkey's Minister of Treasury and Finance, Mehmet Şimşek, announced that new tax regulations, including the Global Minimum Corporate Tax (GMCT), will soon be presented to the Turkish Grand National Assembly.

What is the Global Minimum Corporate Tax (GMCT)?

The GMCT is a part of the Base Erosion and Profit Shifting (BEPS) project initiated by the G20 and OECD in 2013. It aims to ensure that large multinational companies pay a minimum level of tax on their profits.

Who will be affected by GMCT in Turkey?

  • Multinational companies operating in Turkey.

  • Large Turkish companies with operations abroad that have global revenues exceeding 750 million Euros.

What does the GMCT entail?

All multinational companies with global revenues over 750 million Euros will be required to pay at least 15% tax on their profits in each country they operate. If they pay less than 15% tax in a foreign country, the difference will be collected by the Turkish tax authorities.

Which countries have adopted the GMCT?

  • The European Union implemented the GMCT on January 1, 2024. However, six countries (Lithuania, Latvia, Poland, Cyprus, Portugal, and Spain) have not yet complied.

  • Other countries like Canada, Japan, Malaysia, New Zealand, South Korea, Switzerland, the United Kingdom, and Vietnam have adopted the GMCT.

  • The United States has no immediate plans to implement the GMCT.

Why is the GMCT important for companies?

Implementing the GMCT raises significant questions about:

  • Tax burden

  • Existing tax advantages

  • Transfer pricing

  • Controlled foreign corporation (CFC) income

Companies need to adopt strategic approaches to comply with the new regulations and minimize potential risks.

What should companies do to prepare for the GMCT?

  • Conduct a comprehensive analysis of their current tax structure.

  • Evaluate the potential impact of the GMCT on their tax burden.

  • Review and possibly restructure existing tax advantages.

  • Reassess transfer pricing policies.

  • Ensure compliance with CFC rules.

  • Understand the new reporting procedures and legal obligations associated with the GMCT for a smooth transition.

In summary, the upcoming GMCT regulations will have significant implications for both multinational companies operating in Turkey and large Turkish companies with international operations. It is crucial for these companies to thoroughly analyze and adapt to the new tax requirements to ensure compliance and minimize risks.

Take Action Now with OZM Consultancy

Are you ready to navigate the new Global Minimum Corporate Tax regulations with confidence?

Don’t leave your business at risk. Reach out to OZM Consultancy today for expert guidance and strategic solutions tailored to your unique needs.

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Global Minimum Corporate Tax Regulations in Turkey