Cash repatriation bill approved

ANKARA - Reuters

Turkish deputy PM Ali Babacan had once stated that Turks have unregistered $130 billion overseas. AA photo

The Turkish parliament passed series of laws late on May 21. One of the most significant of these laws in economic terms was a law on cash repatriation, also known as wealth amnesty law, to lure back funds held abroad by affluent Turks without punitive taxes and fines.

Under the legislation, Turks will pay just two percent on eligible funds, avoiding taxes that could otherwise reach 30-40 percent. They will also avoid an investigation into whether the wealth was generated in Turkey and improperly kept overseas.

In order to benefit from the amnesty, Turkish individuals or companies will be obliged to declare their wealth before the end of July. The code says individual and corporate persons will declare their money, gold, exchange, property and other capital market instruments abroad, which are owned by them as of April 15, 2013, to the tax offices by July 31, 2013, or to the intermediary institutions and banks.

Turkey last used such a programme in 2008 and 2009 to help mitigate the effects of the global financial crisis, drawing backing about 50 billion lira ($28 billion at current exchange rates). As the cash repatriation law last time applied a 2 percent tax on assets coming in from abroad, together with a 5 percent tax on assets in the country, the new code does not offer any regulations on domestic assets.

Unregistered $130 bln abroad

“When we enacted the first one, there was an economic crisis in the world. Turkey had not yet become prominent. Cash repatriation will be more effective in this period [thanks to Turkey’s greater prominence in world affairs],” Turkey’s Deputy Prime Minister Babacan said during a visit to the US in April.

Babacan also stated that Turks have unregistered $130 billion abroad, saying that they could bring a new regulation to draw this money to Turkey.

He did later reject to give any exact numbers about how much they expects to attract.