Can the attendance fee be written off as an expense?

The official tax ruling from the Turkish Revenue Administration, dated July 17, 2024, addresses the issue of whether payments made to a company’s board member for attendance fee (“huzur hakkı”) and meal allowances can be treated as deductible expenses for corporate income tax purposes.

Key Points:

Honoraria Payments: The company in question, a single-shareholder joint stock company, pays its chairman and board member monthly attendance fee. According to Turkish tax regulations, these payments are classified as income and are subject to withholding tax under the Income Tax Law (Article 61). The payments should be treated as employment income, and appropriate income tax withholding must be applied.

Meal Allowances: The company also provides meal cards to the same board member. In line with Article 23 of the Income Tax Law and related guidance, meal allowances can be exempt from income tax, provided they do not exceed the daily limit of 170 TL (effective from January 1, 2024). Any amount exceeding this limit is subject to income tax.

Tax Deductibility: Under Article 40 of the Income Tax Law, expenses made for generating and maintaining business income, such as attendance fee and meal allowances, can be deducted from the company’s taxable income, as long as they adhere to the tax code’s rules.

In summary, the company can deduct both attendance fee payments and meal card expenses from its corporate taxable income, but income tax must be withheld on attendance fee payments. Meal allowances may be exempt up to a daily limit, with any excess treated as taxable income.

Source: Revenue Administration of Republic of Türkiye
Legal Notice: The information in this article is intended for information purposes only. It is not intended for professional information purposes specific to a person or an institution. Every institution has different requirements because of its own circumstances even though they bear a resemblance to each other. Consequently, it is your interest to consult on an expert before taking a decision based on information stated in this article and putting into practice. Neither Karen Audit nor related person or institutions are not responsible for any damages or losses that might occur in consequence of the use of the information in this article by private or formal, real or legal person and institutions.