In many countries, ‘fair taxation’ is a hot topic and it is often expressed that the current tax systems- particularly corporate taxation- are no longer fit for purpose under today’s circumstances given the impact of digitalization. It is clear that there is pressure to widen and deepen the tax base whether we consider developed countries with aging populations and growing health and social security expenses or developing countries needing funds to finance sustainable development goals. In light of these global developments, Turkey has introduced a number of tax reform measures which include an increased corporate tax rate and VAT obligation for foreign e-service providers over this past year.
OECD data revealed that global foreign direct investment (FDI) declined 27% to 1.097 billion in 2018. This represents 1.3% of global GDP, the lowest level since 1999. The fall in FDI was mainly attributed to the US tax reform. Despite the bleak outlook regarding global FDI, Turkey saw an annual increase of 14% in direct investment, according to the Presidency of the Republic of Turkey Investment Office.
Investment in Turkey 2019, compiled by KPMG Turkey’s Tax Practice, aims to provide general outline of the Turkish tax environment for foreign investors, reflecting developments to May 2019. The set of information contained in this publication is an introduction for the foreign investors that plan to take a look into tax and business environment in Turkey.