Turkish Financing Expense Restriction Calculator
Calculate the non-deductible part of financing expenses attributable to borrowings that exceed equity under Turkish tax law.
Things to keep in mind:
Credit institutions, financial institutions, leasing, factoring and financing companies are outside the scope. • Financing expenses capitalised into investment cost are not restricted; enter only amounts recorded as expense or cost. • Check current communiqués and rulings for special cases such as negative equity or which balance sheet to use. • The tax effect uses the corporate tax rate; for income taxpayers it depends on the personal tax bracket.Calculator
Result
Enter the values and press Calculate to see the result here.
About this tool
Under Turkish Corporate Tax Law art. 11/1-(i) and the parallel rule of the Income Tax Law art. 41, businesses whose borrowed funds exceed their equity cannot deduct a portion, set by Presidential decree, of the interest, commission, maturity difference, profit share, exchange loss and similar expenses attributable to the excess. The attributable expense is total financing expense × (borrowings − equity) / borrowings. The tool shows this amount, the non-deductible expense and its corporate tax effect.
How to use
- Enter the total financing expense recorded as expense or cost for the period.
- Enter total borrowings (short and long term liabilities) and total equity.
- Press Calculate.
Notes
The restriction rate and corporate tax rate are kept with their source and effective date. The tax effect is the non-deductible amount multiplied by the corporate tax rate.