NEWSLETTER-2019-metin

314 NEWSLETTER 2019 However, the general approach of the Revenue Administration regarding the taxation of capital decreases may be summarized as fol- lows: • Capital decreases should be made, firstly, from the accounts that are subject to corporate tax and dividend withholding tax as result of the distribution of the profit after tax, • Afterwards, the account that is subject only to dividend with- holding tax should be accepted to be withdrawn from the company, • Finally, capital in cash and in kind contributions that will not be taxed through withdrawal from the company should be accepted to be used for the capital decrease 2 . In line with the above-mentioned approach of the Revenue Ad- ministration, the taxation of a capital decrease transaction should be made as follows: • Firstly, it should be accepted that taxable funds, such as inflation adjustment differences revaluation funds and cost increase funds, are withdrawn from the company and, accor- dingly, corporate tax should be calculated over the referenced withdrawn funds. Subsequently, the profit, after taxes, sho- uld be made subject to dividend withholding tax depending on the legal structure of the party receiving the dividend. • Afterwards, retained earnings and legal reserves formerly added to the capital should be accepted to be withdrawn from the company and dividend withholding tax should be calculated over the referred amounts depending on the legal structure of the party receiving the dividend. • Finally, capital in cash and in kind contributions should be accepted to be withdrawn from the capital and no withhol- 2 Yıldırım, Emre / Kaplan, Sinan : “Anonim Şirketlerin Türk Ticaret Kanunu Hükümlerine Göre Yapacağı Sermaye Azaltımının Muhtemel Vergisel Sonuçları” , Yaklaşım Dergisi, February 2018.