In this article, we would like to inform you about a recent amendment concerning wage and other payments of employees, namely; Regulation Amending the Regulation on the Payment of Wages, Bonuses, and All Types of Receivables of This Nature via Banks (in Turkish, “Ücret, Prim, İkramiye ve Bu Nitelikteki Her Türlü İstihkakın Bankalar Aracılığıyla Ödenmesine Dair Yönetmelik’te Değişiklik Yapılmasına İlişkin Yönetmelik”, the “Amending Regulation”) published in the  Official Gazette numbered 32920 and dated 4 June 2025. The Amending Regulation modifies several provisions which are explained below.

With the Amending Regulation, the thresholds set out in Articles 6, 7, 8 and 10 of the Regulation on the Payment of Wages, Bonuses, Premiums and all Types of Receivables of This Nature via Banks (the “Regulation”) have been revised in relation to the employer’s obligation to make such payments via banks to employees working under the following laws:

• Journalists subject to the Press Labor Law numbered 5953,
• Seamen subject to the Maritime Labor Law, and
• Employees subject to the Labor Law.

Under the Regulation, the condition requiring employers employing “at least five (5) persons” in order to be subject to the obligation to make stipulated payments via banks has been modified to “at least three (3) employees”.

These provisions shall enter into force at the beginning of the month following their publication in the Official Gazette i.e. 1 July 2025.

It is crucial to fully comply with the modified provisions of the Regulation to avoid being subject to any administrative penalties, and therefore, this is of paramount importance for employers to correctly evaluate the total number of employees covered under the aforementioned labor laws and amend their payment practices for ensuring full compliance with the modified legal requirements as from 1 July 2025.

This Newsletter is presented to your information referring to our Newsletter regarding Temporary Share Certificates sent on 18 April 2025.

1.    Income Tax Implications for Share Transfers

Pursuant to Repeated Article 80/1 of the Income Tax Law numbered 193 (“ITL”) and the 232nd series of the Income Tax General Communique, capital gains  (in Turkish, “değer artış kazancı”) derived from the sale of shares in joint stock companies (in Turkish, “Anonim Şirket”) by the Turkish full taxpayer (resident) individuals shall be exempt from income tax (levied at rates between 15% and 40%) provided that both of the following conditions are met:

•    The shares have been held in property by the seller for more than 2 (two) years, and
•    The shares are represented by duly issued share certificates (in Turkish, “hisse senedi”) including temporary share certificates (in Turkish, “geçici ilmuhaber”).

It is important to note that this tax income exemption does not apply to capital gains derived from the sale of shares in a limited liability company (in Turkish, “limited şirket”), regardless of whether share certificates (in Turkish, “pay senedi”) have been issued.

Share transfers in a limited liability company by real persons are treated differently than those in joint stock companies. In such cases:

•    The duration of shareholding is irrelevant, and
•    The entire capital gain is subject to income tax at the time of sale.

There are no holding period exemptions for capital gains arising from the disposal of shareholder rights or partnership interests in a limited liability company. Therefore, the net gain exceeding the annual exemption threshold will be taxable in accordance with general income tax rules.

Where the individual has additional income to declare in the annual income tax return, all income (including capital gains) will be aggregated and taxed at progressive rates.

2.    VAT Exemption on Share Transfers

Under Article 17/4-g of the Value Added Tax Law numbered 3065 (“VAT Law”):

•    The transfer of shares in a joint stock company that are represented by share certificates (including temporary share certificates), is exempt from value-added tax (“VAT”).
•    Individuals are not considered VAT taxpayers unless they are engaged in a continuous commercial activity in their own name. Therefore, when a real person transfers shares in a joint stock company or a limited liability company, such transaction will not be subject to VAT, provided it does not constitute continuous commercial activity.

In addition, under Article 17/4-r of the VAT Law;

•    The transfer of shares held in subsidiaries by a company for at least 2 (two) full years,
•    The transfer of immovable property and equity participations by debtors or guarantors to banks, financial leasing companies, or finance companies as debt settlement (including sales via auction),
•    And the subsequent transfer of such assets by these financial institutions,
are all exempt from VAT.

3.    Tax Planning Consideration: Share Certificate Issuance

From a tax planning perspective, the issuance of share certificates (including temporary certificates) in a joint stock company may be a strategic measure to optimize secure the income tax exemption available under the ITL. As such, in any upcoming transactions involving share transfers, particularly in joint stock companies, it is highly recommended to consult your tax advisor to assess the most efficient structure from a legal and tax perspective.

Please do not hesitate to contact our Tax & Legal team for further details or tailored advice on your specific transactions.

This Newsletter is presented to your information referring to our Newsletter regarding Temporary Share Certificates sent on 18 April 2025.

1.    Income Tax Implications for Share Transfers

Pursuant to Repeated Article 80/1 of the Income Tax Law numbered 193 (“ITL”) and the 232nd series of the Income Tax General Communique, capital gains  (in Turkish, “değer artış kazancı”) derived from the sale of shares in joint stock companies (in Turkish, “Anonim Şirket”) by the Turkish full taxpayer (resident) individuals shall be exempt from income tax (levied at rates between 15% and 40%) provided that both of the following conditions are met:

•    The shares have been held in property by the seller for more than 2 (two) years, and
•    The shares are represented by duly issued share certificates (in Turkish, “hisse senedi”) including temporary share certificates (in Turkish, “geçici ilmuhaber”).

It is important to note that this tax income exemption does not apply to capital gains derived from the sale of shares in a limited liability company (in Turkish, “limited şirket”), regardless of whether share certificates (in Turkish, “pay senedi”) have been issued.

Share transfers in a limited liability company by real persons are treated differently than those in joint stock companies. In such cases:

•    The duration of shareholding is irrelevant, and
•    The entire capital gain is subject to income tax at the time of sale.

There are no holding period exemptions for capital gains arising from the disposal of shareholder rights or partnership interests in a limited liability company. Therefore, the net gain exceeding the annual exemption threshold will be taxable in accordance with general income tax rules.

Where the individual has additional income to declare in the annual income tax return, all income (including capital gains) will be aggregated and taxed at progressive rates.

2.    VAT Exemption on Share Transfers

Under Article 17/4-g of the Value Added Tax Law numbered 3065 (“VAT Law”):

•    The transfer of shares in a joint stock company that are represented by share certificates (including temporary share certificates), is exempt from value-added tax (“VAT”).
•    Individuals are not considered VAT taxpayers unless they are engaged in a continuous commercial activity in their own name. Therefore, when a real person transfers shares in a joint stock company or a limited liability company, such transaction will not be subject to VAT, provided it does not constitute continuous commercial activity.

In addition, under Article 17/4-r of the VAT Law;

•    The transfer of shares held in subsidiaries by a company for at least 2 (two) full years,
•    The transfer of immovable property and equity participations by debtors or guarantors to banks, financial leasing companies, or finance companies as debt settlement (including sales via auction),
•    And the subsequent transfer of such assets by these financial institutions,
are all exempt from VAT.

3.    Tax Planning Consideration: Share Certificate Issuance

From a tax planning perspective, the issuance of share certificates (including temporary certificates) in a joint stock company may be a strategic measure to optimize secure the income tax exemption available under the ITL. As such, in any upcoming transactions involving share transfers, particularly in joint stock companies, it is highly recommended to consult your tax advisor to assess the most efficient structure from a legal and tax perspective.

Please do not hesitate to contact our Tax & Legal team for further details or tailored advice on your specific transactions.

Our Law Firm remains at your disposal for any further clarifications you may need.

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