Flights to Erbil Iraq
On April 14 I was a passenger on the first Turkish Airlines (THY) flight to Erbil, Iraq. Following a visit by Prime Minister Recep Tayyip Erdo?an on March 29, Turkey’s national flag carrier, THY, flew its first flight to Arbil, the capital of the semi-autonomous Kurdish region in northern Iraq, on Thursday, April 14. The start of the new Istanbul-Erbil route indicates the importance given to relations with Iraq in this new era. Finance Minister Mehmet ?im?ek gave a speech in Kurdish and received great applause from the audience. The minister underlined the close relationship between Turkey and the region.
Trade between Turkey and Iraq is expanding, and EU companies especially Italian, German and Dutch ones are very interested in the market. The Iraqi market is receiving great attention, and Turks are one step ahead in that they are neighbors and can take advantage of logistics infrastructure established many years ago.
Mr. ?im?ek opened a THY office and a branch of a company named Vadi Trade, and visited an ?stanbul-based international law firm providing legal services in Iraq to foreign companies. The need for an established law firm able to operate in English is obvious in a place where many industries and finance houses are now targeting Iraq.
I have a couple of short emails to respond to today. They are related to cases of tax evasion as well as new tax regulations introduced over the last two years. “Hello. I hope you can help. I read one of your posts on a Turkish living forum. My partner and I purchased a property approximately three years ago and had to set up a company to buy it. We sold the property last year and closed the company down. Our money was transferred to the UK.
Not sure if I was supposed to pay the capital gains tax on this as it showed a profit on the sale. We didn’t really because the price on the tapu [title deed] was a lot less than we paid. What is worrying to us is that we’re going back to Turkey in a few weeks and don’t want to be arrested for nonpayment of tax. The question is, would any tax due from the sale, would it be pursued through the accountant for the profit from the sale or would they come after me. Hope you can advise. P.S. Because we owned it for just over three years, not sure where we stand legally.”
When you buy a property in Turkey, the transfer of the title of the property takes place at the Land Registry Office. Declaring a price that is lower than the real value of the property creates a case of tax evasion for both the seller and the buyer. Therefore, you should be careful about this when purchasing a property in Turkey. The title deed transfer fee is determined according to the sales price, and it is generally known that some investors understate the purchase price to pay minimum title deed costs. This is a mistake, and they may later on be required to pay fines and the tax itself with interest.
The parties were able to determine the price between themselves in the past and people usually declared one-tenth of the real price to avoid transfer levies and duties. At that time the authorities did not pay attention to this matter even though everyone in the country knew the prices on tapus were incorrect.
Just recently the government took some measures to stop the tax loss and forced people to declare higher prices. According to the new regulations, the price to be declared cannot be less than the value of the property as assessed by the local municipality. This value is still not the real value but at least close to it.
I should say that in some places people complained that the minimum amount to be declared is actually higher than the real sales price of the property as municipalities determined a very high value in order to collect local levies at a higher rate. To respond to the question I need another article so I will provide an answer in my next column. Berk Cektir reported for Todays Zaman
