Who is the beneficial owner and how is it determined?
In the Communiqué, beneficial owners are defined as real persons(s) that hold the ultimate control of the legal persons or the businesses without any legal personality, or those who ultimately influence them. According to the Communiqué, for unincorporated businesses such as legal entities, joint ventures and trusts, and similar businesses, the real beneficiary is determined as follows:
For legal entities:
Individual shareholders holding more than 25% of the legal entity
Person(s) holding ultimate control over the legal entity if it is suspected that the individual shareholders holding more than 25% of the legal entity are not UBOs or if no individual shareholders are holding these shares
In cases where the UBO cannot be determined, the person(s) with the highest administrative authority
For entities that do not have legal status, such as business partnerships:
Person(s) with ultimate control
In cases where the UBO cannot be determined, the person(s) with the highest executive authority
Those who have the title of founder, trustee, manager, auditor, or beneficiary in foundations and similar organizations or have influence over these organizations
Corporate taxpayers are obliged to declare UBO information in their provisional tax returns and annual corporate tax returns.
Parties other than corporate taxpayers have to submit their UBO information electronically to the Turkish Revenue Administration until the end of August of each year.
If the taxpayers mentioned above have a new tax registry or if there is a change in the information previously reported, these changes must be declared within one month following the date of occurrence.
All UBO documents and records must be retained by the parties for a period of five years. The relevant penalties in the Turkish Tax Procedure Law will also be applied to those who do not provide the necessary information or make incomplete or misleading statements.
In case of non-compliance with the notification obligation regarding the beneficial ownership, incomplete or misleading notification, a special irregularity penalty will be applied according to the Tax Procedure Law No. 213.
Due date of the first declaration
For the first UBO declarations, every taxpayer and other parties specified in the Communiqué have to submit their UBO information to the Revenue Administration electronically till the end of August 2021 at the latest.
Recent Changes on Tax Procedure Law
With the General Communiqué of the Tax Procedure Law, the scope of the taxpayers who are obliged to report within the scope of the combat against tax evasion, and the procedures and principles of the notifications were determined. With the regulation, it is made obligatory to notify the real person or persons who ultimately control or have the ultimate influence over the legal person or unincorporated entities defined as the real beneficiary. The obligation of companies to "provide beneficial beneficiary information" began on 1 August.
Besides, banks and many other financial institutions as well as crypto asset service providers, for whom the implementation of Law No. 5549 on the Prevention of Laundering Proceeds of Crime is mandatory, will be obliged to report the ultimate beneficiary information of the transactions carried out by their customers when requested by the Revenue Administration (GİB).
When requested by the Revenue Administration, the branches, agencies, representatives, commercial proxies, and similar affiliated units of the obligor whose head office is abroad are obliged to inform the real beneficiary of the transactions dispensed out by their customers.
It has been stated that the relevant penalty provisions of the Tax Procedure Law No. 213 will be applied to the taxpayers who do not report the information required to be reported in the Communiqué, or who make incomplete or misleading notifications.
Av. Ferhan YILDIZLI
Av. Gizem UZUNOĞLU
Stj. Av. Mert DİLMEN