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In order to meet the international financing needs of developing countries

One of the methods they can use is foreign direct investment. Foreign investments plays an important role in developing countries' economies.

truly encouraging foreign investment regulations in Turkey started in the 1950s and the Law No. 6224 Encouragement of Foreign Capital, which is still valid, entered into force. It came to Turkey with the arrangements made in the 1980s in the largest foreign direct investment increased. The Direct No.4875, which finally entered into force on 17 June 2003.

The Law on Foreign Investments and regulations regarding foreign investments have been revised.

With this development, the establishment of foreign capital companies and branches in our country until today has shown a very rapid development increasingly. One of the methods of direct foreign investment to establish a liaison office in the country where the investment is planned.

What is a Liaison Office?

Liaison office, main activity, carrying out market research and feasibility studies and on behalf of the company is monitoring market investment opportunities in Turkey.

The liaison office is not allowed to carry out any commercial activity.

Permission from the Ministry of Economy, General Directorate of Incentive Implementation and Foreign Capital required to be taken;

The condition of operating for at least one year may be sought for a permit.

The first leave is issued for three years and is based on the parent company's activities and future plans in the last three years. can be extended depending on

Money and capital markets, insurance, etc. operating in sectors subject to special legislation such as International investor applications for the establishment of liaison offices to show

evaluated by.

Opening the liaison office in Turkey Terms What?

Article 6 of the Regulation on Direct Foreign Investors Law No. 4875

According to the laws of foreign countries by companies in order to open a liaison office in Turkey

It is established and to have established a legal entity status and commercial companies in Turkey

There is a condition that it does not operate.

In line with the specified conditions, liaison offices, legal and commercial offices located abroad communication, feasibility research, some social and cultural fields conducting studies, making preparations for mergers and transfers between companies, promoting and advertising, keeping abreast of job opportunities in the country are offices opened for information purposes.

In the event that they engage in commercial activities, the liaison office loses its features and the branch passes to status.

How to Set Up a Liaison Office?

It is stated in Article 7 of the Implementation Regulation of the Foreign Direct Investors Law. in order to establish a liaison office in Turkey with the following documents to the Treasury apply:

➢ Owned by the parent company and by the relevant Turkish Consulate or The Hague States Private Law

The Obligation of Approval of Foreign Official Documents prepared within the framework of the Conference Original Certificate of Activity certified in accordance with the provisions of the Annulment Contract,

Annual Report or balance sheet and income statement prepared about the parent company,

➢ To be given to the person who will be assigned to carry out the activities of the liaison office. original certificate of authorization,

➢ Conducting the establishment procedures of the liaison office through another person original power of attorney in case.

Again, as stated in the 6th article of the related regulation; regarding establishment and time extension

Applications are made from the date of application, provided that the requested information / documents are complete and complete. It is concluded within 5 business days from the start.

➢ Liaison offices that have obtained the establishment permit, send a copy of the registration certificate to the tax office at the latest 1 they send it to the General Directorate within the month. Offices, in case of change of address

They report their addresses to the General Directorate within 1 month at the latest.

➢ By the liaison offices, by the end of May every year at the latest, the bureau's previous year "Information Form on the Activities of the Liaison Offices" filled and sent to the Undersecretariat. To these applications, the bureau's past year Documents showing that their expenses are covered by foreign currencies sent from abroad.is added.

Liaison offices are allowed to operate for a maximum of 3 years. Duration of liaison offices the activities of the past year and future plans and targets are taken into account. a period extension may be granted for a maximum of 3 years each time.

➢ In case the liaison offices cease their activities, the relevant.The work quit-attendance slip to be obtained from the tax office is sent to the General Directorate. Offices, except for the balance arising as a result of closing and liquidation, the transfer request they cannot be found.

➢ The Undersecretariat, the establishment of liaison offices that are found to be acting in violation of the legislation. It can revoke its permissions and inform the relevant authorities about the cancellation decision.

The Status of Liaison Offices Against Turkish Tax Laws

❖ Evaluation in terms of Corporate Tax;

Liaison offices in Turkey, except for the purpose of making an income-generating activities (liaison offices commercial activity in Turkey) receive permission. Therefore in commercial activitySince there will be no commercial gain due to the absence, taxation of this is also promised. will not be the subject. The decisions of the Council of State at various times regarding this issue and attributes. Liaison offices are listed in Article 94 of GVK.Except for their wage payments (wage within the scope of Article 23/14 of the ITL) for payments, they will withhold and pay taxes. Article 94 of the GVK in question liaison established and operating in accordance with the above conditions, outside the scope of offices have no tax obligation. Based on this statement, the liaison offices

The obligation to keep the required books according to the balance sheet procedure within the framework of the provisions of the Tax Procedure Law also not available.

According to the clause 1 of the 1st article of the Value Added Tax Law numbered 3065, commercial,industrial, agricultural activities and activities carried out in Turkey in the framework of submission and self-employed services constitute the subject of value added tax. Accordingly VAT commercial, industrial, agricultural or self-employment activities must be done. Liaison offices, provided that they do not engage in commercial activities in any way. Since they have been established, they do not need to establish a VAT obligation. About the topic as there are many rulers.

❖ Evaluation in Terms of Income Tax Withholding;

Income Tax Law No. 23/14 of me, "legal or business center in Turkey service personnel working alongside employers subject to limited liability, employer the wages paid in foreign currency earnings it achieved except through Turkey from income tax is the exception. " wage to be paid to the personnel to be employed in the liaison office based on the explanation payments from income tax within certain conditions, ie GVK Art. 94 under the employer is exempt from the withholding, which he has to do with his capacity as responsible. These conditions are listed as follows;

1- The wage payment will be paid over the earnings of the non-resident employer abroad. So staff wages will be paid by the parent company abroad and in Turkey will be sent. In terms of proof, the transfers are sent to the liaison office bank account. will be more accurate.

2- Wage payments are not in Turkish Lira, but in foreign currency or in Turkish Lira indexed to foreign currency. will be made.

3- Of course, within the control of these conditions, the necessary documents (bank receipts, foreign exchange purchase documents, international transfer receipts, etc.).

Except for the above-mentioned fee payments, liaison offices are in accordance with Article 94 of the ITL. If they make the payments listed in paragraphs, they are obliged to withhold. For example,lease payments to be made by persons working in liaison offices, accountants or translation Income tax withholding over self-employment payments made to offices is required.

❖ Evaluation in terms of Stamp Tax;

Wages to be paid to personnel working in liaison offices in the Stamp Tax Law (GVK's 23/14. 5535 dated 8 July 2006, any provision that exempts wage payments from tax until the pre-law numbered law

Since there was no stamp tax deduction was made from the wage payments to be made. However this the 8th article of the 5535 numbered law and the 23rd article of the Income Tax Law.

Accordingly, fees exempted from Income Tax are also exempted from stamp tax. Related date There will be no stamp tax deduction for the fee payments at liaison offices afterwards.

❖ Evaluation in Terms of Social Insurance Legislation;

If the staff working in the liaison office is Turkish, income tax deduction over the wage SSK employee and employer premiums will be cut and paid to the insurance directorates.Article 3 (G) of the Social Insurance Law No. 506 titled "Those Who Are Not Deemed Insured" in the bend; "By and by any institution established in a foreign country and named after that establishment. For a business account and sent to Turkey and stating that the insured in a foreign country foreign persons ”is included. Foreign personnel center working in liaison offices are persons who are abroad and act on behalf of and on behalf of that institution. This staff Turkey is resident in countries with social insurance numbers of foreign personnel to avoid the existence of an insurance agreement, secondly, the related the presence of the document obtained from the country authorities and the SSK to which this document is affiliated It must be approved by the directorate. Social security in one's own country. If he proves that he is subject to his institution as above, he will not pay SSK premium in our country. countries not subject to social security institutions will pay the social security premium in Turkey.

What are the Required Documents and Where to Apply? 

* Application petition, notarized and apostille certified translated into Turkish (or translated and approved by the Turkish consulate) the original of the certificate of activity and notarized