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Istanbul Financial Center works are over: There are exemptions from taxes

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The work of the Presidency, Ministry of Finance and AKP staff on the Istanbul Financial Center Basic Law has come to an end. Some changes were made to the draft text. According to the information obtained, the financial centers in London, Singapore and Dubai were taken as models. AK Party staff said, “After the Russia-Ukraine war, this center has become more advantageous. It can also be very functional in terms of supply chain and logistics. Due to the pandemic, the Far East began to lose its charm. A basic arrangement of 15 elements is being made. It will attract the attention of investors,” he said.

ASSET FUND SUBSIDIARIES

According to the news of Nuray Babacan from Hürriyet newspaper; The proposal consists of the exemptions to be granted to the investors who will be located in the Istanbul Financial Center and the details of the administration of the center. The Center will be managed in the form of a subsidiary of the Wealth Fund. According to the regulation, 75 percent of the profits of financial companies that will operate in this region will be exempt from tax. 80% of personnel expenses will be exempted from Income Tax.

Financial institutions operating in the Istanbul Financial Center region by obtaining an associate certificate will be able to issue financial services to individuals residing abroad within the scope of financial services. All infrastructure and superstructure operation and management of the special status Istanbul Financial Center region will be carried out by the “managing company” established by the Turkey Wealth Fund. A “One-Stop Office” will be established in the Istanbul Financial Center region, where relevant public institutions will take charge, with the aim of realizing the processes of the activities of the participants.

THERE ARE EXEMPTIONS ON TAXES

Almost all of the financial services export activities carried out by financial institutions that have received the participant document will be tax exempt. 75 percent of the profits obtained within the scope of the activities will be deducted from the benefit of the institution. The processes and the money received in favor of these services and processes will be exempt from the Banking and Insurance Transactions Tax. The papers issued for the processes within the scope of the activities will be exempt from all kinds of fees.

No tax will be applied on interest and profit shares paid on all kinds of bonds and bills and lease certificates issued abroad. The prices obtained by the workers employed by financial institutions in the Istanbul Financial Center region will be exempt from Income Tax at the level of 60% for individuals with at least five years of professional experience abroad, and at the level of 80% for individuals with at least ten years of professional experience abroad. Rentals here will be excluded from Stamp Duty and fees.

SPECIAL LAW RULES

The parties will be able to choose a law in all kinds of processes and contracts subject to private law within the scope of the activities carried out in the Istanbul Financial Center region between the participants and foreigners and the participants themselves. The immovables located in the Istanbul Financial Center region cannot be used other than the targets determined in the project and administration plan.

In proportion to the number of people employed, different incentives will be given to the participants, such as premium incentives. In the center, the Central Bank will be the private banks as well as all public banks. Istanbul Financial Center’s fields of activity include open banking, family offices, brokerage houses, regional administration centers, digital banking, leasing, factoring and financing, fund management, subsidiary finance, private banking, capital markets, wealth management, insurance and reinsurance, investment banking , tax law and consultancy firms and green finance.

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