Notice of obligations related to the beneficial ownership notice will be published
July 28, 2021
Esin legal partnership
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Tax procedural law General Communiqué serial no. 529 (“Communicates“) with the provisions on the obligation to notify in connection with beneficial ownership came into force when it was published in the Official Gazette on July 13, 2021.
What does the communiqué mean?
The communiqué aims to effectively combat tax fraud by identifying the persons (beneficial owners) who will ultimately benefit from the taxable income or property.
According to the communiqué, the information about the beneficial owners must be communicated to the tax authorities in accordance with the procedures and principles set out in the communiqué, provided they are active from August 1, 2021 or are in ongoing liquidation proceedings:
- Corporation taxpayers
- Persons or partners who are authorized to represent unrestricted companies; one of the partners in a limited partnership, the capital of which is not divided into shares, and the partner in a simple partnership who holds the higher share; Directors, trustees, or agents of trusts or similar companies domiciled in Turkey or resident abroad who have directors resident in Turkey
In addition, those who are liable within the scope of Law No. 5549 on Prevention of Money Laundering Proceeds from Crime, along with their branches, agents, agents and commercial agents should provide beneficial ownership information in relation to those provided by their clients upon request the financial management.
Who is the beneficial owner and how is he determined?
The communiqué defines the beneficial owner as the natural person (s) who exercise ultimate control over, or who ultimately have influence over, the legal persons or non-legal entities. In the case of legal persons, companies without legal personality such as partnerships and trusts and similar companies, the beneficial owner is determined according to the communiqué as follows:
- For legal persons:
- natural persons who hold more than 25% of the shares
- in case of doubt that the natural person who holds more than 25% of the shares is not the beneficial owner or if there is no natural person who holds 25% of the shares, natural person (s) who have final control exercise on legal personality
- if the beneficial owner could not be determined on the basis of the above, natural person (s) who have the ultimate executive authority with regard to legal personality
- For companies without legal personality such as partnerships:
- Person (s) who have ultimate control over the company
- if the beneficial owner could not be determined on the basis of the above, natural person (s) who have the ultimate executive authority of the company
- For trusts and similar companies, founders, trustees, directors, auditors or those who have beneficiary titles or have influence over these companies.
Notification requirement for corporation taxpayers and companies without legal personality
Corporate taxpayers should submit the beneficial owner information in the annexes to the corporate tax return and annual corporate tax return. This notice contains the beneficial owner’s name, surname, citizenship, citizenship ID, address, and telephone number, fax number, and email address (if available) and the basis for qualifying that person as a beneficial owner .
Other taxpayers who are not subject to corporation tax and other natural persons should submit the report annually by the end of August via the Internet tax office using the “registration form for beneficial owners”.
In addition, in accordance with provisional Article 1 of the Communiqué, all taxpayers, including corporation taxpayers and other natural persons, should electronically submit information on the beneficial owner to the tax authorities
August 31, 2021 no later than.
Notices of beneficial ownership should be made electronically. Notifications that are not made electronically are deemed not to have been made.
Taxpayers should keep the information related to the declaration of beneficial ownership for five years starting from the year following the submission of the declaration.
Consequences of non-compliance with the reporting requirement
If the obligation to report in connection with beneficial ownership is not met, or if a shortfall or a misleading report is made, a special administrative offense under Tax Procedure Act No. 213 will be imposed.
The obligation to report to determine the beneficial owners of income and assets is intended to increase tax transparency in line with the OECD studies and to combat tax fraud more effectively. It is important that those who are required to report beneficial ownership follow the procedures and principles set out in the communiqué in order to avoid fines or penalties.
The content of this article is intended to provide general guidance on the subject. Expert advice should be sought regarding your specific circumstances.
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