Under the bill, Turkish expatriates will be encouraged to bring their money to Turkey under an “assurance” and by paying a 2 percent nominal tax. Turks residing within the country will be able to put their cash savings in banks subject to a 5 percent tax rate. Profits earned outside the country will be exempt from income and corporate tax if they are brought to Turkey by May 31. Turkish citizens will have to declare the current value in Turkish lira of their savings and property -- money, gold, foreign currency, securities and capital market instruments and all fixed assets -- to banks, brokerage houses or tax offices within three months after the law is published in the Official Gazette.
The government will not carry out any inspections on the source of savings for the term before Jan. 1, 2008, unless there is a pending specific complaint regarding the origin of the funds.
In my opinion, this law contradicts some other laws, but because it is new legislation, it should supersede the previous ones.
The most interesting point of the law is that there will be no questioning of the source of the money. Please read the following sentence carefully, “The government will not carry out any inspections on the source of savings for the term before Jan. 1, 2008.” If the government does not carry out inspections, how are the officers supposed to ask whether it is mob money? If the officers are authorized to ask questions, then what is the limit to that?
During debates on the bill, the government representatives informed Parliament that the government would take action on transferred funds if there is evidence that money laundering has occurred. The government is also expected to take measures to prevent the laundering of drug money or money earned from terrorism or illegal arms sales.
Once the law goes into effect, citizens will either transfer their money to Turkey via banks or physically bring their money into the country within a three-month period. A significant amount of money is expected to flow into Turkey thanks to this regulation, economy officials said, noting that the main goal of the regulation is to reduce Turkey’s current account deficit.
I am sorry to say that the government may not be successful in attracting as much cash flow as it imagines. The law appears to be in the “twilight zone.” We are all mature enough to understand that the money that is invited to Turkey is somewhat illegal but will be granted amnesty. If the government does not make any more clear regulations on this law, I don’t believe that there will be millions of people coming to Turkey with suitcases full of US dollars.
NOTE: Berk Çektir is a licensed attorney at law and available to answer questions on the legal aspects of living in Turkey. Send enquiries to b.cektir@todayszaman.com. The names of the readers are disclosed only upon written approval of the sender.DISCLAIMER: The information provided here is intended to give basic legal information. You should get legal assistance from a licensed attorney at law while conducting legal transactions and not just rely on the information in this corner.
