Stamp Tax Exemption and Exception

Stamp tax is financial obligations that persons pay over the documents or paper drawn up in their legal transactions between themselves or with the state.[1] As per the Article 3 of the Stamp Tax Law No. 488 (“Law“), the signatories of the papers are liable for the payment of stamp tax, as a tax payer. The papers referred in the article are demonstrated in table (1) attached to the Law.

There is regulation regarding stamp tax exemption and exceptions in the Law. Pursuant to tax law, while exception means that taxable subject as per the Tax Procedure Law is not subject to tax, on the other hand, exemption means that some persons determined as taxpayer in the Tax Procedure Law are not subject to tax.

According to the article 9 of the Law, some written papers are excepted from stamp tax. These written papers are demonstrated in table (2) attached to the Law.  The written papers in this table are classified under five different headings: papers related to formal procedures, papers related to students and soldiers, papers related to employees, farmers and migrants, papers related to commercial and civil affairs, and papers related to institutions.  The papers excepted from stamp tax are not limited to those listed in the Law; they are also regulated by other laws.

Pursuant to paragraph 2 of the Article 3 of the Law, the stamp tax of the papers regarding transactions between governmental authorities and persons shall be paid by persons. It should be understood from this paragraph that governmental authorities are covered by the exemption. In addition, stamp tax exemption does not apply only to governmental authorities. The term “exempt institution” is defined in Paragraph 2 of the Article 24 of the Law, which refers to the institutions listed in table (2) attached to the Law.

Being one of the signatories of a paper subject to stamp tax of those who are exempt from tax does not require underpayment of stamp tax. In accordance with the Article 24 of the Law, all tax of the papers issued in relation to the transactions of persons in table (1) attached to the Law by the institution exempt from stamp tax and signed only by those is paid by the persons.  As a result, in accordance with the exemption and exception provisions set forth in the Law, the signatories of the papers excepted from tax shall not pay stamp tax, and if one of the parties is exempt from stamp tax, the one who are not shall pay stamp tax.  However, persons and institution shall be jointly and severally liable for the entire tax and penalty if the tax on these papers is never paid or is paid in short.

[1] Muallâ Öncel/Ahmet Kumrulu/Nami Cagan, Tax Law, 20. Basi, Ankara 2011, p. 433.