The decision on calculating an additional tax of 10 percent on the exempt income of corporate taxpayers and an additional tax of 5 percent on the exempt income obtained from abroad entered into force after being published in the Official Gazette. The business world is of the opinion that the decision will have negative effects on the entrepreneurship ecosystem.
With the Law on Restructuring of Certain Receivables and Amending Certain Laws, which was discussed in the General Assembly of the Grand National Assembly of Turkey on March 8, 2023 and published in the Official Gazette on March 12, an additional tax of 5 percent on the exempt income of corporate taxpayers, and on the exempt income obtained from abroad. The practice of calculating an additional 5 percent tax came into effect. The business world is of the opinion that the decision will have negative effects on the entrepreneurial ecosystem and foreign investments in Turkey.
Joint statement from TUBISAD, TBV and Entrepreneurship Foundation
Representing technology entrepreneurs and the startup ecosystem in Turkey, the Informatics Industry Association (TÜBİSAD), Turkish Informatics Foundation (TBV) and Entrepreneurship Foundation have published a joint statement regarding the decision. In the statement, it was noted that the additional tax decision would have negative effects on both entrepreneurs and investors. Noting that entrepreneurs are faced with a 10% tax liability for investments they receive from angel investors and venture capital funds, it was also stated that this situation may adversely affect the interest of potential investors.
Pointing out that the concerns have a grain of truth, Company Global CEO Egemen Antmen said, “Startups are mostly unprofitable in their first years and need new financing at regular intervals. The application may have negative effects for the startups preparing for the new investment round and their potential investors.
2022 institutional investors supported Turkish entrepreneurs in 157
Stating that technology startups have received an investment of 2022 billion dollars in 1,74 and that 307 of 157 institutional investors are foreign institutional investors, Egemen Antmen said, “Start-ups provide human resources, equipment, Ar -He dedicates it to D. The additional tax application, which can only lead to failure of working business models due to lack of financial resources, may cause reluctance among angel investors and domestic venture capital funds, as well as institutional investors interested in the Turkish entrepreneurship ecosystem.
“Demands for establishing a company abroad will increase”
Company Global CEO Egemen Antmen stated that entrepreneurs often prefer to establish a company abroad in order to embark on their journey to globalization, and concluded his evaluations with the following words:
“With the incentives and support they give to entrepreneurs and new business ideas, countries such as the USA, the UK, Dubai, Germany, the Netherlands, Estonia and Malta stand out among the first target markets of entrepreneurs who want to open up to the global market. The said additional tax application may increase the demands for establishing a company abroad. In this case, our country may face the risk of losing the added value that the unicorns of the future would create if they were established in Turkey.”