Turkey Issues Regulation on Beneficial Ownership Disclosure Rules

Introduction

On July 13, 2021, Turkey’s Ministry of Treasury and Finance published a regulation requiring taxpayers to disclose ultimate beneficial owners (UBOs). This article outlines the key requirements and implications of this new regulation.

Scope of Application

The regulation applies to:

Corporations
Commandite companies
Trusts
Similar institutions

Disclosure Requirements

Corporate Taxpayers

Corporation taxpayers must disclose UBO information in their:

Advance tax returns
Annual corporate tax returns

Other Parties

Other parties, including:

Banks
Payment agencies
Financial leasing companies

must submit electronic forms by the end of August each year.

Changes to Previously Reported Information

Changes to previously reported information must be disclosed within one month of occurrence.

Definition of Ultimate Beneficial Owners (UBOs)

The regulation defines UBOs as individuals who ultimately control or have ultimate influence over:

Legal entities
Entities without legal status

For corporations, this includes:

Individual shareholders with shares exceeding 25%
Suspected UBOs
Those with ultimate control

For entities without legal status, such as business partnerships, it includes individuals with:

Ultimate control
Executive power
Influence

Record Keeping and Penalties

UBO documents and records must be kept for five years by the parties. Relevant penalties will apply to non-compliance, incomplete, or misleading declarations.

Deadline for First Declaration

Taxpayers and other parties subject to UBO disclosure must submit their first declaration by August 31, 2021.

Additional Information

For additional information, please contact Kuzey Yeminli Mali Müsavirlik A.S., Istanbul.