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Global minimum tax Turkey (Türkiye): Developments in taxation

With the introduction of Law No. 7524, Türkiye has added the section “Local and Global Minimum Supplementary Corporate Tax” to the Corporate Data Law No. 5520. This regulates tax liability, tax base and tax rate, as well as exceptions and exemptions for multinational companies covered by the law. The Ecovis experts explain these and other details on the implementation of the tax.

The OECD wants multinational companies above a certain size to pay a minimum rate of 15% tax on their profits in each country in which they operate, to prevent tax avoidance. If companies pay less than 15% tax in one country, the home country of the group of companies or another country in which the group operates can levy this tax.

The subject of local and global minimum supplementary corporate tax

The profits of the affiliated enterprises of multinational business groups whose annual consolidated revenue in the consolidated financial statements of their ultimate parent enterprise exceeds the Turkish lira equivalent limit of EUR 750 million in at least two of the four accounting periods preceding the accounting period in which the income is reported are subject to local and global minimum supplementary corporate tax. Exemptions and exceptions apply, among others, to:

• Real estate investment vehicles: Businesses that are the ultimate main business and are primarily real estate investment funds aiming to provide income to their beneficiaries by investing in real estate and where single-stage taxation is applied on a business or beneficiary basis.
• The earnings of multinational business groups’ affiliated businesses from international maritime transportation activities and, under certain conditions, some other sales and rental income within the scope of this activity are exempt from the local and global minimum supplementary corporate tax.

Who must pay the global minimum supplementary corporate tax

The taxpayer of the institutions generating income at the global level is the ultimate main enterprise, intermediate main enterprise, or partially owned main enterprise in Türkiye which is affiliated with the multinational business unit and other variables.

We support you in calculating the local and global minimum supplementary tax.

Mustafa Bulut, CPA, Partner, ECOVIS DİPLOMAT DENETİM VE YMM A.S., Izmir, Türkiye

Tax rate and base

The global minimum supplementary corporate tax rate is the difference between the country-based tax burden and the minimum corporate tax rate (15%). If the country-based tax burden exceeds the minimum corporate tax rate, no global minimum supplementary corporate tax is calculated.

The country-specific tax burden of a multinational group is calculated by dividing the taxes of its companies in a country by their profits. The global minimum tax base is reduced by 5% of gross wages and 5% of the net book value of fixed assets. The tax is determined by applying the tax rate to this base. For a subsidiary, the tax is calculated by applying the ratio of company to country profits to the determined minimum tax.

Tax period, declaration, date and payment

The tax period for the global minimum supplementary corporate tax is the accounting period, which is the calendar year in Türkiye. The tax period of businesses to which a special accounting period applies is the special accounting period. The calculated tax must be declared and paid by the last day of the fifteenth month following the month in which the accounting period is closed.

Who must pay the local minimum supplementary corporate tax

The taxpayer of the local minimum supplementary corporate tax is the affiliated enterprises and business partnerships that are affiliated with multinational business groups within the scope of Additional Article 1 and are resident in Türkiye.

Tax period, declaration, assessment and payment

The tax period of local minimum supplementary corporate tax is the accounting period. Local minimum supplementary corporate tax is determined by applying the minimum supplementary corporate tax rate to the global minimum supplementary corporate tax base. The calculated tax is declared and paid from the first day to the last day of the twelfth month following the month in which the accounting period closes.

For further information please contact:

Mustafa Bulut, CPA, Partner, ECOVIS DİPLOMAT DENETİM VE YMM A.S., Izmir, Türkiye
Email: mbulut@diplomatymm.com.tr

Efil Çetin, CPA, ECOVIS DİPLOMAT DENETİM VE YMM A.S., Izmir, Türkiye
Email: ecetin@diplomatymm.com.tr

Unlock EU market access with MiCA licensing: The time to act is now

The implementation of the Markets in Crypto-Assets (MiCA) Regulation marks a transformative milestone for the crypto industry across the European Union. As of December 30, 2024, MiCA establishes a single regulatory framework and creates a level playing field for crypto-asset service providers (CASPs). Whether your company is already operating in the EU or planning to expand into this dynamic market, obtaining a MiCA license is essential to thriving in the new regulatory environment. What does it mean to be governed by MiCA?

Why MiCA is important for your business

MiCA introduces consistent regulatory requirements across all EU member states, replacing fragmented national frameworks. This EU-wide approach simplifies compliance and eliminates legal uncertainty, allowing CASPs to seamlessly scale their operations across borders. By establishing clear guidelines, MiCA enhances market integrity, protects investors, and promotes innovation. For businesses, compliance with MiCA is essential to avoid legal repercussions, maintain market credibility, and operate efficiently.

With a MiCA license, your company gains the ability to passport services throughout the EU, accessing a market of over 450 million potential users under one regulatory umbrella.

Licensing Opportunities in the EU

Several EU nations have become prominent destinations for obtaining MiCA licenses, characterized by supportive regulatory frameworks.

Lietuvos Bankas: A Proven Licensing Leader in the EU

In Lithuania, Lietuvos Bankas emphasizes early and well-prepared applications, with a focus on maintaining high compliance standards. They urge CASPs to:

• Act quickly: Early applications ensure business continuity during the transition period.
• Prepare thoroughly: Only high-quality applications will be considered, making readiness a key factor in the process.
• Remain compliant after approval: Compliance with ongoing MiCA requirements ensures long-term operational success.

Latvijas Banka: A fintech-friendly approach

As of January 2, 2025, Latvijas Banka, the central bank of Latvia, is accepting applications for MiCA licenses. They offer:

• Free pre-licensing consultations: Tailored expert guidance to assess application feasibility, ensure document readiness, and navigate compliance requirements.
• Fast response times: Consultations are typically answered within 48 hours, streamlining the pre-licensing process and reducing time to market.
• Competitive fees: A monitoring fee of just 0.6%, with a minimum of $3,000 per year.
• Additional Support: Access to the Innovation Hub, Regulatory Sandbox, and startup-friendly incentives such as co-funding for qualified employees and tax breaks.

Each jurisdiction presents distinct benefits that should be carefully assessed against the operational requirements and compliance needs of the business. Lithuania’s and Latvia‘s flexible yet robust regulatory framework, combined with theit digital infrastructure, makes meeting these requirements more streamlined than in many other jurisdictions.

Grandfathering periods for existing CASPs

Transitional arrangements under MiCA provide for a grandfathering period for CASPs operating before December 30, 2024. These periods vary by country, with some member states offering up to 18 months for license applications. For example:

• Ireland, Estonia and the Czech Republic: up to 18 months.
• Latvia and Lithuania: 5-6 months, with immediate action required to meet shorter deadlines.

How MiCA raises regulatory standards

MiCA’s comprehensive framework goes beyond licensing to address:

• Crypto asset classification: Proper classification is critical to determining regulatory obligations. Misclassification risks compliance issues and operational disruptions.
• Operational Resilience: Strengthened IT systems and robust governance under the Digital Operational Resilience Act (DORA).
• Sustainability Goals: Integration of environmental, social and governance (ESG) practices to ensure alignment with broader EU goals.

Your Next Steps

Securing a MiCA license isn’t just a regulatory requirement; it’s an opportunity to build credibility and access Europe’s integrated market. At ECOVIS ProventusLaw, we specialize in navigating the complexities of MiCA in the EU. ECOVIS ProventusLaw offers:

• Pre-licensing support: Comprehensive readiness assessments and document preparation.
• Application Guidance: End-to-end support to ensure a smooth licensing process.
• Post-licensing compliance and internal audit: Ongoing support to maintain alignment with MiCA, DORA, and ESG requirements.

With MiCA now in effect, now is the time to act. Contact us today to discuss how we can help you unlock the potential of the EU crypto market and ensure your compliance journey is seamless and successful.

For further information please contact:

Inga Karulaitytė, Partner of ECOVIS ProventusLaw
Email: inga.karulaityte@ecovisproventuslaw.com

ESG responsibilities: Hague Court of Appeal rejects claim for CO₂ reduction by Shell

European companies are not only faced with more and more ESG (Environmental, Social und Governance) regulations, but also court rulings on cases related to ESG-related topics, as a ruling by the Hague Court of Appeal shows. Board members and supervisory directors now should also be mindful that companies could be held accountable in court for their ESG responsibilities. The Ecovis experts explain what this means for companies.

Companies are increasingly becoming accustomed to obligations arising from the Corporate Sustainability Reporting Directive (CSRD), the Sustainable Finance Disclosure Regulation (SFDR) and the EU Taxonomy Regulation. Nevertheless, lawsuits against companies continue to arise because they do not properly deal with ESG responsibilities.

Such claims may be brought, for example, by social organisations advocating ESG interests. A good example is the 2021 landmark decision by a Dutch court ordering Royal Dutch Shell to reduce its CO₂ emissions by 45%. Although that decision was overturned by a higher court in late 2024, it nevertheless contains a serious warning: Shell does have an obligation to take measures against dangerous climate change.

The Shell ruling and its significance for other companies

The Shell ruling caused quite a stir nationally and internationally. In this case, which was brought by the Dutch environmental organisation Milieudefensie (Defenders of the Environment), Greenpeace and others, Shell was ordered to reduce its aggregate annual volume of all CO₂ emissions into the atmosphere by 45% in 2023 compared to 2019 levels.

Following an appeal, this ruling has been overturned: the court of appeal ruled that it does not have the capacity to determine a reduction rate of 45% or any percentage. However, it also ruled that Shell does have an obligation to counter dangerous climate change. Protection against climate change should be considered a human right that can be applied indirectly in private legal relationships by giving substance to open standards, such as the social standard of care. The court notes that it is an established fact that fossil fuel consumption is largely responsible for creating the climate problem and that the responsibility to combat this problem does not lie solely with sovereign states.

We advise you on how to correctly comply with the legal framework of the ESG criteria and develop an appropriate strategy.

David Bos, Attorney at law, Partner, Kienhuis Legal – member of EOVIS International, Utrecht, Netherlands

The court is thus of the opinion that companies such as Shell, which contribute significantly to the climate problem and have it within their power to contribute to combating it, have an obligation to limit CO₂ emissions in order to counter dangerous climate change. It is expected that more such cases against companies will follow. The Dutch rulings may serve as a precedent for other jurisdictions.

Board members also targeted by prosecutors

Social organisations are also filing criminal complaints against board members, for example, for polluting the environment. The underlying goal is to encourage the directors to initiate a change in the company’s behaviour. A director will need to seek advice on the relevant legal framework and a strategy to address such developments.

Regardless of the nature and size of a company, it is useful for boards and supervisory directors to proactively consider these developments. It makes sense for companies to formulate and comply with a climate policy in a timely manner. This does not mean that all risks are eliminated. However, it shifts potential discussions to whether the measures taken can be considered sufficient.

For further information please contact:

David Bos, Attorney at law, Partner, Kienhuis Legal – member of EOVIS International, Utrecht, Netherlands
Email: david.bos@kienhuislegal.nl