Turkish parliament passes legislation hiking income tax rate for high earners: report

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Turkish Parliament / AFP PHOTOS

Turkey’s parliament late on Thursday passed new laws on tax regulation including higher rates for high earners and hotel accommodation, and new taxes on digital services, Reuters reported.

The regulation includes a new tax bracket of 40 percent for those earning more than 500,000 lira ($87,743.93) annually, according to the final text of the regulation. It also increases the Treasury’s net borrowing limit by 70 billion lira for 2019.

In July Reuters reported Ankara had decided to postpone for a few months the planned tax hikes for high earners and ultra-luxury housing sales. Last month, Reuters reported the plan was presented to parliament.

The tax on accommodation services will be 1 percent until the end of 2020 and will rise to 2 percent afterwards. The regulation also sees a 7.5 percent tax on digital advertising and content.

It doubles a sales tax on foreign exchange to 0.2 percent and gives President Recep Tayyip Erdogan the authority to raise it to 10 times that amount.

Houses that cost more than 5 million lira will be subject to a valuable residence tax under the regulation.

Separately on Friday, a new law transferring some of the authorities of the Banking Regulation and Supervision Agency (BDDK) to the central bank was published in Turkey’s Official Gazette.

The new law gives the central bank oversight over payment systems, including determining costs, expenses and minimum amounts or rates.

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