Taxpayers obliged to file UBO declaration

The taxpayers, who are obliged to declare UBO information, are as follows;

• Corporate taxpayers,
• Person authorized to represent the company in collective companies or one of the commandite partners in limited partnership companies and the person who has the highest shareholding on behalf of ordinary partnerships, and managers of trusts and similar organizations established in a foreign country with resident managers in Turkey, or with management centers in Turkey.

In addition to that, certain other parties such as; banks, financing and factoring companies, financial leasing companies, asset management companies, notary publics, lawyers, Sworn-in Financial Advisors, CPAs, and etc. are also obliged to declare UBO information, related with the transactions that are performed by their clients, in case requested by the Revenue Administration.

Determination of UBO

The UBO of the legal entities is determined as the real person shareholders who holds more than 25% shares of the legal entity. In case there is no individual shareholder holding more than 25% of the shares or in the event of hesitancy that the real person shareholder, holding more than 25%, is not the real UBO, the real persons who ultimately control the legal entity are deemed as UBOs. If those cannot be identified, then the UBO would be determined as the real persons who have the highest executive authority.

Declaration Period

Corporate taxpayers will declare the UBO information, together with their annual tax returns. Other taxpayers will file an electronic form for declaration of the UBO until the end of August each year.

The first declaration regarding the UBO information will be made to the Revenue Administration through an electronic form, until 31 August 2021, by all the taxpayers, including the corporate taxpayers.

Non-Compliance

UBO records should be kept for at least 5 years, by the parties that are considered within the scope of UBO declaration obligation. In case of non-compliance to those declaration obligations, penalties envisaged under the Tax Procedure Code would be applicable.