Starting with January 1, 2021, the provisions of art. 25 paragraph (4) of the Fiscal Code were supplemented with a letter (f ^ 1), which stipulates that expenses incurred as a result of transactions with a natural or legal person located in – a State which, at the date of recording the expenditure, is included in Annex I and/or Annex II of the EU List of non-cooperating jurisdictions for tax purposes, published in the Official Journal of the European Union.
The EU list of non-cooperating tax jurisdictions was drawn up in December 2017 and has been revised several times. The most recent substantial review took place in February 2020. As of 2020, it is updated twice a year.
A document on the current situation (Annex II) identifies non-EU jurisdictions that do not yet comply with all international tax standards, but that have provided sufficient guarantees of commitment to reform their tax policies.
Jurisdictions are assessed on the basis of a set of criteria established by the Council in 2016 in terms of fiscal transparency, fiscal equity, and the implementation of international standards to combat the erosion of the tax base and the transfer of profits.
According to the EU List of Non-Cooperative Jurisdictions for Tax Purposes, updated on 18 February 2020, Turkey is part of the list of cooperating jurisdictions for the implementation of the principles of good fiscal governance through the Annex II commitments, by:
- Commitment to implementing the automatic exchange of information either by signing the Multilateral Agreement of the competent authorities or by bilateral agreements with a deadline of 31 December 2020
- Membership of the World Forum on Transparency and Exchange of Information for Tax Purposes (“World Forum”) and satisfactory rating for the exchange of information on demand, by the end of 2018
The Ministry of Finance mentions that, in the context of reporting cross-border arrangements under EU Directive 2018/822 (known as DAC 6), the notion of non-cooperating jurisdictions refers only to countries in Annex I of the EU List of Non-Cooperative Jurisdictions for Tax Purposes, published in the Official Journal of the European Union.
Thus, it launched in public consultation on February 4, 2021, a draft amendment and completion of the Fiscal Code, which provides for the removal of Annex II from the scope of non-deductibility of expenses recorded by taxpayers paying income tax as a result of transactions with a person located in a state that is included in the List of non-cooperating jurisdictions for tax purposes, in order to correlate with the manner of implementation of defensive measures by the other Member States of the European Union.