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On the other hand, when the regulation is handled within the
framework of the principle of "protection of property right
in tax", it can be claimed that full taxpayers who have to pay
the 15% tax have suffered losses and / or the regulation is
unconstitutional".

This is the summary of the article published in the
Ekonomist magazine’s issue 2020/31, dated 15.11.2020.

Uncertainty on exchange
transaction tax in insurance

companies and private pension
funds

As the BITT (banking and insurance transactions tax or
foreign exchange expense tax) rate on foreign exchange
(forex) sales transactions has been applied as zero percent
for almost 11 years, this rate was set as 1 per thousand
by a Presidential Decision on 15 May 2019 and then it has
been increased to 2 per thousand through the Law no.7194.
On 24 May 2020, it was increased to 1 percent with a
Presidential Decision and then the rate was reduced to 2 per
thousand on 30 September 2020 again. As exceptions to this
implementation, the BITT rate that should be calculated in
some transactions was determined as 0 (zero) per thousand.
However, no determination has been made for insurance
companies and investment funds.

Investment funds are considered as taxpayers in tax
implementations and are considered as bankers. Therefore,
the transactions of the concerning funds regarding the
securities indicated in the second paragraph of Article 28 of
the Law for Expenditure Taxes and handled by them as main
field of activity are subject to BITT. However, in practice,
these funds are taxpayers of BITT due to certain transactions
they have carried out, but they do not calculate BITT since
there is no transaction subject to BITT but not within the
scope of exception. As the foreign exchange purchases
and sales transactions within the scope of the Law for
Expenditure Taxes are not the main field of activity of these
funds, they will not be within the scope of BITT.

Unlike bankers, all transactions made by insurance
companies are subject to BITT. In the current situation, there
are no exceptions in our legislation for these transactions
carried out by insurance companies and there is no
regulation in Presidential Decisions where BITT rates are
determined that the BITT rate in these transactions can be
applied as zero.

Therefore, it can be concluded that foreign exchange sales
transactions to be carried out by insurance companies should
be subject to foreign exchange expense tax.

This is the summary of the article published in the October Explanations in this article reflect the writer's personal view on the
2020 issue of Sigortacı newspaper. matter. EY and/or Kuzey YMM ve Bağımsız Denetim A.Ş. disclaim any
responsibility in respect of the information and explanations in the
article. Please be advised to first receive professional assistance from
the related experts before initiating an application regarding a specific
matter, since the legislation is changed frequently and is open to different
interpretations.
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