New Turkish Corporate Income Tax Act approved

The author comments on the new Turkish Income Tax Act of 21 June 2006, which comprehensively revises, and introduces substantial amendments compared to, the previous 1949 Act. Notably, the new Act reduces the corporate income tax rate from 30% to 20% and introduces anti-avoidance provisions with regard to transfer pricing and controlled foreign companies. The changes generally apply retroactively from 1 January 2006, but the new transfer pricing rules will only apply from 1 July 2007.