Turkish legislature adopts bill to attract cash flow
Posted by meb at November 14th, 2008
The Turkish Parliament on Thursday adopted a bill that offers incentives and tax cuts in the hope of attracting the funds of Turkish citizens living in Turkey and abroad into the country’s financial system.
Under the bill Turkish expatriates will be encouraged to bring their money to Turkey under an “assurance” and by paying a 2 percent “nominal tax.” Turks residing inside the country will be able to put their cash savings in banks subject to a 5 percent tax rate.
Profits earned outside the country will be exempt from income and corporate tax if they are brought to Turkey by May 31, 2009. Turkish citizens will have to declare the current value in Turkish lira of their savings and property — money, gold, foreign currency, securities and capital market instruments and all fixed assets — to banks, brokerage houses or tax offices within three months after the law is published in the Official Gazette. The government will not carry out any inspections on the sources of savings for the term before Jan. 1, 2008, unless there is a pending specific complaint regarding the origin of funds. During debates on the bill at Parliament, Finance Minister Kemal Unakıtan told lawmakers that the government would take action on funds if there is evidence that money laundering has happened. “It is impossible to blame someone for something for which you have no evidence,” Unakıtan said in Parliament. “But of course, we do not want drug money or money earned from terrorism or illegal arms sales,” he said.
Once the law comes into effect, citizens will either transfer their money to Turkey via banks or physically bring their money within a three-month period. A significant amount of money is expected to flow into Turkey thanks to this regulation, economy officials said, noting that the main goal of the regulation is to reduce Turkey’s current account deficit.
source: Today’s Zaman
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