Turkey extends exemption of capital gains taxation
As from a January 2005 capital gains derived from the sale of immovable property or participation shares are tax exempt for Turkish corporate income tax. Such exemption already existed but this was initially a temporary measure. This is now changed to a permanent exemption.
The exemption is not intended for traders in such assets and – as a condition for the exemption – the property or shares that were sold at a gain must have been owned by the company for the previous two years. A further requirement is that the gains must be added to the paid-up capital of the company in the next two years.
The exemption is also granted to non-resident companies, although, capitalization of the gains is not necessary for non-residents. Instead, any gains for which the exemption is claimed must be kept in a special account during five years.
