Numara : 8
Tarih : 12.8.2020


NO: 2020/8

Subject: Withholding Tax Rate on Real Estate Rentals Reduced to 10% and VAT Rate Reduced to 8% and 1% on Certain Services; Short-Term Working, Termination Prohibition and Unpaid Leave Extended.

Through the President Decision No: 2810, 2811, 2812 and 2813 promulgated in the Official Gazette dated 31 July 2020;

  • Short-term working allowance, termination prohibition and unpaid leave periods have been extended,
  • Withholding tax rate on real estate rentals has been reduced from 20 percent to 10 percent until the end of 2020, and
  • The VAT rate has been reduced to 8% and 1% on certain services to be effective until the end of 2020.

1) Prohibition of termination and unpaid leave

The termination ban for the employment contracts and practice of unpaid leave have been extended to 17 September 2020 by the Decision No: 2811.

2) Payment of short-time working allowance

The period for short-time working allowance has been extended by one more month by the Decision No: 2810.

As may be remembered, the period of the short-term working allowance for the workplaces that applied until 30 June 2020 (including the date) had been extended for one more month without any suitability inspection made, provided that the conditions and the number of employees benefitting from the application are the same as before;

  • As of July 1st 2020, for the workplaces whose short term work allowance has ended before 30 June 2020,
  • As of June 30th 2020, for the corporations maintaining practice of short term work starting from the date of the termination of the practice.

This time, the period of the short-time working allowance has been extended for 1 month, starting after the extended one-month period, within the framework of the above-stated principles.

3) Temporary Change in the Withholding Tax Rate of Rental and Lease of the Goods, Properties and Rights

With The Presidential Decree No. 2813 published in the Official Gazette dated 31 July 2020; the withholding tax rate on rental payments to be made in cash or on account to cooperatives and income taxpayers has been reduced from 20% to 10% for the period between 31 July 2020 and 31 December 2020 (inclusive).

4) Temporary Change in the VAT rate of Services

With The Presidential Decree No. 2812 published in the Official Gazette dated 31 July 2020; the VAT rate has been reduced from 18% to  8% and from 8% to 1% on certain services to be effective between 31 July 2020 and 31 December 2020 (inclusive).

a) The VAT rate has been reduced from 18% to 8% on the below services;

  • Workplace rental service,
  • Congress, conference, seminar, concert, fair and amusement entrance fees,

  • Organization services provided in wedding, wedding ballrooms, and cocktail halls,

  • Barber and hairdressing services and services provided in the beauty salon,

  • Tailoring, repair of clothing and home textile products,

  • Repair of shoes and leather goods and shoe dyeing services,

  • Ironing services for dry cleaning, laundry, clothing and other textile products,

  • Carpet and rug washing services,

  • Maintenance and repair of ;

    • Bicycles, motorcycles and motorized bicycles (excluding materials),
    • Electrical household appliances (refrigerator, oven, washing machine, dishwasher, oven, air conditioner, etc.) (excluding materials),
    • Consumer electronics products (TV, radio, CD / DVD players, video cameras, etc.) (excluding materials),
    • Domestic heating products (water heater, water heater, bath boiler, combi etc.) (excluding central heating boilers) (excluding materials),
    • Home and garden equipment (excluding materials),
    • Furniture and home furnishings (excluding materials),
    • Computers, communication tools and equipment, clocks (except materials),
    • Musical instruments,
  • Locksmithing and key duplication services and porter services,

  • Lubrication, washing, polishing services of motor vehicles and maintenance and repair of their seats and upholstery (excluding materials),

  • Residential maintenance, repair, painting and cleaning services (excluding materials) provided to household residents,

  • Food and beverage services outside the scope of the 24th row of the "B) OTHER GOODS AND SERVICES" titled section of the attached list number II (excluding the part that hits alcoholic beverages),

  • Passenger transport services,

  • Ornamental plants and flower deliveries.

b) The VAT rate has been reduced from 8% to 1% on the services mentioned in the below lines of  List No. II attached to the VAT Code and titled "B) OTHER GOODS AND SERVICES";

1. Entrance fees in the 16th line,

2. Food and beverage services in the 24th line,

3. Accommodation services provided by hotels, pensions, etc. in the the 25th line.


Yours sincerely,


Deloitte Turkey

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