What are the conditions to benefit from the income exemption of real estate sales according to the Corporate Tax Law in Türkiye?

September 14, 2022

This exemption is stipulated in Article 5/1-e of the Corporate Tax Law No. 5520 in Türkiye. Moreover, detailed explanations are given in the section titled “5.6. Exemption from sales of immovables and participation shares and founder’s shares, dividend shares and pre-emption rights” of the Corporate Tax General Communiqué with Serial No.1.

Conditions to benefit from the exemption:

– Keeping immovables and participation shares, founder’s shares, dividend shares and pre-emption rights in asset account for at least two full years,

– Keeping the part of the sales income benefiting from the exemption in a special fund account in liabilities until the end of the fifth year following the year of the sale,

– Collection of the sale price until the end of the second calendar year following the year in which the sale was made,

– Non-withdrawal of earnings held in the fund account (In the exemption application, in case of transferring from the fund account to another account (excluding addition to the capital) within five years, the earnings that should be kept in a special fund account in liabilities until the end of the fifth year following the year of sale, and withdrawing from the business, in case the company is transferred abroad by limited taxpayer institutions or the business goes into liquidation within this period, taxes that are not accrued on time due to the exemption applied for the part of the income subject to these transactions will be collected together with tax loss penalty and delay interest in accordance with the Tax Procedure Law.)

– Not dealing with securities or real estate trade.

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.