Şimşek: Minimum corporate tax is inevitable

Şimşek emphasized that minimum corporate tax is on the agenda of all countries and that countries that do not legislate this tax will leave their taxation rights to other countries.

In 2021, approximately 140 countries in the OECD organization agreed on the global minimum corporate tax. Accordingly, branches, subsidiaries and workplaces of multinational companies whose annual consolidated revenue exceeds 750 million euros in low-tax countries will be subject to a minimum 15 percent corporate tax. More than 30 countries, especially the European Union countries, have enacted this tax to be applied to earnings in 2024.

Şimşek stated that legalization efforts are continuing in other countries and shared the following information: “If the corporate tax burden paid by multinational companies in the country where they operate is below 15 percent, countries that legalize the minimum corporate tax will be able to receive the tax difference that the relevant country does not receive. This tax will be collected first by the country in which the company operates. If there is no minimum corporate tax in this country, the country where the company's headquarters is located will be able to collect this tax. "If there is no minimum corporate tax here, this tax can be collected by the third country where the companies in the same group are located."

Şimşek stated that countries that do not implement minimum corporate tax will have transferred their taxation rights to other countries and said that it is inevitable to collect minimum corporate tax from multinational companies operating in Türkiye. Şimşek said, “Otherwise, the tax that our country does not collect will be collected by another country.”

Minister Şimşek emphasized that minimum corporate tax should be applied in Türkiye and stated that studies are being carried out to introduce this practice for multinational companies and the preparations are at the final stage.

Stating that the number of companies with international capital operating in Türkiye is around 80 thousand and that there are 2 thousand 134 businesses whose main business is abroad, Şimşek said: “Only 2.5 percent of the multinational companies investing in our country exceed the 750 million euro threshold.” Alternative models are being worked on to see how the tax incentives they have earned can be protected and utilized in different areas. "As the Ministry, we are working closely with the Ministry of Industry and Technology to develop alternatives that will continue to encourage investment in our country."