Amendments in Rent Taxes

The Statutory Decree on the amendments in rent taxes entered into force. Pursuant to the statutory decree on the reorganization of rent incomes and withholding in contracts made in foreign currency and Turkish lira that will be applied for the 6-month taxation period between 01.09.2018 - 28.02.2019 taken by the Council of Ministers of the TRNC due to negative fluctuations in exchange rates in the second half of 2018, it was stated that all immovable properties (including those rented as furnished or with installation and fixtures) including those taken as advances in return for price of lease and use would be calculated at 13% (thirteen per cent) of the accruing gross income for those in foreign currencies and at 1% (one per cent) for the 6-month taxation period between 01.09.2018 - 28.02.2019 by the owners or representatives of properties and rights in foreign exchange contracts or agreements, and that exchange currencies would be fixed at 6.31 for STG, 5.60 for Euro and 4.75 for USD currencies. In addition, it was ensured that exchange rates in non-foreign currency lease contracts would be calculated by the cross-exchange rate with the dollar currency.

Pursuant to the aforementioned decree, for new contracts to be concluded on leasing immovable properties including those taken as advances in return for price of lease and use, it was stated that they would be paid at 2% (two per cent) of the accruing gross income for new contracts in Turkish Lira to be made as of 01/09/2018 and at 15% (fifteen per cent) for foreign currency contracts by the owners or representatives of properties and rights to the Revenue and Tax Office, and that fixed foreign currencies would not be applied in foreign currency contracts to be concluded as of 01/09/2018.