Stamp Duty Exemption in M&A’s

Mahmut Barlas / Mergers and Acquisitions

On 9 August 2016, an ominous bill[1] (the “Improvement of Investment Law”) has been published in the Official Gazette as to amend numerous laws for improvement of investments in Turkey. This was one of the legal enactments in order to provide different flexibilities and additional benefits for third parties, which are considering investing in Turkey.

According to Stamp Duty Law numbered 488 and related secondary legislation, stamp duty is a consumption tax levied on papers, which are prepared with intent to execute the transactions regarding transfer of goods, services and wealth appeared in the chain extending from production to consumption.

Even though the percentage differs based on the type of document and number of parties, in principal, 0.948% over the highest amount stated in the document shall be payable as stamp duty. There is a cap of the stamp duty, which is amended annually. For the year 2016, stamp duty cap is TRY 1,797,117.

According to the Stamp Duty Law, there are numerous exempted documents from this tax. These exemptions vary so many, which some of them are spin-off agreements, factoring agreements, security agreements for loans, private pension schemes and so on.

According to the Improvement of Investment Law, share transfers have been included to the list of exempted documents from stamp duty. Therefore, share transfer agreements to be executed after 9 August 2016 shall be exempted from this levy.

Should you require any further clarification, please do not hesitate to contact us.



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[1] Law on Amending Numerous Laws in Order to Improve Investment Environment in Turkey numbered 6728