Is the attendance fee given to the members of the board of directors of a joint stock company subject to tax in Türkiye?

What You Need to Know About Attendance Payments and Tax Exemptions
Attendance fee payments made to individuals who take part in the management of a company are an important issue in terms of tax legislation. In particular, it is frequently investigated whether the income tax and stamp tax exemption applied to the minimum wage applies to attendance fee payments. So, what are attendance fees and how does the taxation process work? Here are the details.
What is the attendance fee?

The attendance fee refers to the payments made to the members of the board of directors in joint stock and limited liability companies in return for their services. These payments are regulated under the Turkish Commercial Code (TCC) and the Income Tax Law (Income Tax Law).

The amounts that may be paid to the members of the board of directors may be as follows:
-Fee
-Prize
-Prim
-Share of annual profit

Attendance Right According to Turkish Commercial Code

Pursuant to Article 394 of the TCC, attendance fees may be paid to the members of the board of directors of joint stock companies. These payments

-Shall be determined by the articles of association of the company or by a resolution of the general assembly.
-Attendance fees may be paid to board members in the form of premiums, bonuses or dividends.

Taxation of attendance fees according to Income Tax Law

According to Article 61 of the Income Tax Law, attendance fees are considered as wages. However, honorarium payments up to the minimum wage amount are exempt from income tax (GV) and stamp tax (DV) deduction.

-Important Points:
-Attendance fee payments up to the minimum wage are exempt from income tax.
-Payments of attendance fees exceeding this amount are subject to Income Tax and Stamp Tax.

Declaration of Attendance Payments and Tax Codes

Companies are required to declare the attendance fee payments through the Withholding and Premium Service Declaration.

Tax Declaration Code: 014 – Salary – Attendance Allowance

-To Benefit from Tax Exemption:
-Payments of honoraria must be made within the legal limits. The excess part is subject to tax.
-It must be correctly reported in the tax return and the relevant code must be used.

Summary

Attendance fee payments are an important financial right provided to those who take part in company management. Retainer payments up to the minimum wage amount are exempt from income tax and stamp tax. However, payments exceeding this amount will be subject to tax deduction.

It is of great importance for companies to declare their attendance fee payments correctly and to act in accordance with the tax legislation.

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.