TRANSFER ACCORDING TO THE CORPORATE TAX LAW NO. 5520 (TAX-FREE MERGER)

In the Turkish Commercial Code No. 6102, mergers are regulated in two ways: mergers through acquisition and mergers through new establishment. In the Corporate Tax Law No. 5520, the distinction is made as taxed or tax-free mergers, without making a distinction between mergers through acquisition or new establishment. In the Corporate Tax Law system, taxed mergers are regulated as "mergers" and tax-free mergers are regulated as "transfers". It should be noted that the concepts of merger through acquisition, which is a type of merger defined in the TCC systematics, and transfer, which refers to tax-free merger defined in the CTL, are different from each other.Whether the merger will be taxable or not will depend on whether it meets the conditions in Articles 19 and 20 of the CTL. In other words, mergers that meet the conditions set forth in Articles 19 and 20, which regulate transfer provisions, will be tax-free, while mergers that do not meet the conditions will be taxed.