Turkey Introduces Beneficial Ownership Requirements
In an effort to increase transparency and combat money laundering, Turkey has introduced beneficial ownership requirements for corporate taxpayers and other specified entities. This new requirement is part of a broader effort to improve tax compliance and curb financial crimes.
What is the Beneficial Ownership Requirement?
According to the Ministry of Treasury and Finance’s General Communiqué No. 529 on Tax Procedural Law, which was published in the Official Gazette on July 13, 2021, taxpayers must declare their ultimate beneficial owner (UBO) by August 31, 2021.
How to Make the Declaration
The UBO declaration form is available on the internet tax office and can be accessed through the “Other Notification and Information Entries” menu. The form requires the following information:
- Personal details such as name, date of birth, nationality, and residential address
- Details about the shareholder’s occupation and shareholding percentage
- Reason for being the UBO
Additionally, entities without legal status, such as partnerships or joint ventures, must declare their UBO if they have ultimate control over the entity. Trusts and similar entities are also required to disclose their UBO, including the reasons behind their ownership.
Consequences of Non-Compliance
Taxpayers who fail to comply with the new requirement may face penalties and fines. The Turkish Revenue Administration has emphasized the importance of accurate and timely reporting, warning that incorrect or incomplete information may result in investigations and potential sanctions.
Why is this Requirement Important?
The introduction of beneficial ownership requirements is part of Turkey’s efforts to align itself with international standards on anti-money laundering and combating the financing of terrorism (AML/CFT). The country is also working to improve its tax compliance regime and increase transparency in its financial sector.
Additional Resources
For more information, taxpayers can contact the Turkish Revenue Administration or consult with a qualified tax professional.