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Published: 04/06/2012

As a part of a project to transform Istanbul into a regional financial hub, a draft bill has been passed by Parliament to change some tax regulations that previously prevented fund management firms from opening in Turkey.

Tax incentives to make Istanbul financial centre

As a part of a project to transform Istanbul into a regional financial hub, a draft bill has been passed by Parliament to change some tax regulations that previously prevented fund management firms from opening in Turkey.

The new bill provides government incentives and related regulations for asset management companies founded in Turkey and the international funds run by these companies. The bill also encourages the management of foreign funds from Istanbul, to develop and deepen local financial markets.

Companies other than banks and financial institutions will no longer be able to write off up to 10 per cent of interest and other costs from debts obtained from foreign sources.

Firms can exempt up to 10 per cent of their incomes from income tax based on funds invested in venture capital investment trusts, which allocate financial sources to entrepreneurial firms, according to the new regulation.

Another incentive is that revenues from securities issued by asset rental firms are included in the scope of tax cuts.

The bill creates tax incentives for investments of at least 500 million Turkish Liras of fixed investments. The portion of the value-added tax on an investment that is not redeemed within the year will be returned to the tax payer in the following year.

Under the law, a 100-lira duty will be charged on mobile phones brought into the country from abroad. The lump-sum tax collected on liquor and cigarettes will be automatically updated every January and July, based on the producer price index. This will take effect from January 1, 2013.

Article Link: http://www.turkeypropertyplus.com/news/?id=400

Please contact the author at news@turkeypropertyplus.com for more information.