Monday, April 11, 2022
Legal Regulation and Scope of Exception
In the first paragraph of article 12 of the Law No. 4490 on the Amendment of the Turkish International Ship Registry Law No. 491 and the Decree Law No. 491 amended by Article 3 of the Law No. 5266, earnings are exempt from income and corporate taxes and funds.” provision is included.
According to this provision, earnings from the operation of ships and yachts registered in the Turkish International Ship Registry established by Law No. 4490 are deducted from income tax if the activity is carried out by income taxpayers (including limited taxpayers), corporate tax in case of corporate taxpayers (including limited taxpayers); Earnings from the transfer of ships registered in the Turkish International Ship Registry will also be exempt from income and corporate tax.
This exception is limited to the earnings of real and legal persons from the operation and transfer of ships and yachts registered in the Turkish International Ship Registry. However, regardless of whether the ships and yachts built in Turkey registered in the aforementioned Registry are operated or not, the earnings from the transfer will also be considered within the scope of the exemption.
In addition, after the second paragraph of Article 12 of the Law No. 4490, with the Law on the Amendment of the Republic of Turkey Retirement Fund Law No. 6770 and dated 18/1/2017, and some Laws and Decrees; “The provisions of the first and second paragraphs are also applied during the transfer phase of ships and yachts to be withdrawn from the Turkish International Ship Registry and recorded in another registry or by other means. However, in case of transfer of the ships registered to the Turkish International Ship Registry pursuant to subparagraph (c) of the first paragraph of Article 4 of this Law, to be transferred from this registry to another registry or by other means, they must be registered in the Turkish International Ship Registry for at least six months. It is required that it has been operated.” The third paragraph containing the provisions has been added.
In this context, this exemption can also be used for earnings arising from the transfer of ships and yachts registered in the Turkish International Ship Registry to be registered in another registry or by other means as of 27/1/2017, when Law No. 6770 came into force. On the other hand, ships over 3,000 DWT (passenger ships and 300 gross tons for special purpose and specially built ships) imported from abroad and registered in the Turkish International Ship Registry pursuant to subparagraph (c) of the first paragraph of Article 4 of Law No. 4490, are excluded from this registry. In order for the profits to be recorded to another registry or by other means to be exempt from income and corporate tax, it will be required that they have been operated as registered in the Turkish International Ship Registry for at least six months.
In case the ships and yachts registered in the Turkish International Ship Registry are used in hotel or restaurant management (floating hotel or restaurant), this activity cannot be considered within the scope of ship management activity, so it is not possible to benefit from the said exceptions.
