BSMV is a type of tax applied to financial transactions in Turkey. BSMV stands for; It consists of the initials of the words Banking and Insurance Transactions Tax. This tax is collected on transactions carried out by banks and insurance companies. It is expressed as BSMV rate (%).
Toc
What is BSMV?
Banking and Insurance Transactions Tax (BSMV) is a type of tax regulated in the Expense Tax Law No. 6802 dated July 13, 1956 in Turkey. It is a tax collected on all banking and insurance transactions carried out in Turkey. BITT is the first and only law in tax laws that defines the subject of tax based on the taxpayer.
The tax liability of those who carry out financial transactions with banks and insurance companies is within the scope of BSMV. BITT is calculated as a percentage of the transaction amount and paid to the Treasury. This tax rate may vary depending on the type of transaction and typically ranges from 0.08% to 0.50%.
BSMV is the responsibility of taxpayers who carry out certain financial transactions with banks and insurance companies. This tax is calculated on the interest, commissions and fees paid by customers. The tax is paid by the person performing the transaction and transferred directly to the Treasury.
What is the Scope of BSMV?
According to Law No. 6802, financial leasing transactions carried out directly by banks are excluded from the scope of BSMV.
Due to legal regulations, both the subject of the tax and the occurrence of the event giving rise to the tax may become complicated. Article 28 of Law No. 6802 determines the subject of tax based on the taxpayer for banks and insurance companies, and based on the transaction for bankers.
Banks and insurance companies are accepted as direct BITT taxpayers. For this reason, all transactions other than financial leasing are subject to BSMV. Any transaction of banks and insurance companies does not give rise to BSMV, but if these parties receive money in their favor in cash or on account, BSMV arises.
Money received by banks or bankers in Turkey in cash or on account due to giving credit to a domestic or foreign customer is subject to BSMV.
What is BSMV in Loans?
BITT on loans arises in the period when loan installments are accrued by banks. Due to the loan transactions carried out by banks, the money received under the name of interest, commission and similar names must be subject to BITT.
Banks obtain interest income by accruing interest for the periods specified in the contract and reflecting it in their income accounts. Here, the event that gives rise to tax occurs immediately in the accrual transactions. This means that tax liability will arise when the interest income earned by banks is accrued, not when it is actually received.
BSMV Base in Foreign Exchange Indexed Loans
In interest periods for foreign currency indexed loans, the BITT base is calculated according to the interest rate determined for the loan. The exchange rate difference arising from the interest amount consists of the sum of the exchange rate differences on the principal amount in the paid installment between the loan opening date and the interest accrual periods.
Payment of installments in TL for a foreign currency loan means that a foreign exchange sale is made by the bank. In this case, foreign exchange sales transactions, along with the interest amount on the installment of the foreign currency loan, must also be subject to BITT, but since foreign exchange sales transactions are subject to BITT at a rate of zero, BITT will not be calculated since the installments are paid in TL.
BSMV in Insurance
According to Law No. 6802, all transactions carried out by insurance companies are subject to BITT. Because VAT is not applied to the transactions of insurance companies.
BSMV is applied to the payments received for all insurance services offered by insurance companies.
Money received from the transactions carried out by the organizations in Turkey of insurance companies established abroad are subject to BITT. The organizations of foreign-based insurance companies in our country are also BSMV taxpayers as insurance companies.
Due to some negativities experienced, the Revenue Administration made a regulation in Article 30 of Law No. 6802. According to this regulation, as of 01.08.2008, insurance companies are the taxpayers of BSMV in all insurance transactions made by insurance intermediaries. According to this law, insurance agencies do not have BSMV liability.
BSMV in Financing Companies
According to Article 28 of Law No. 6802, since the main activity of financing companies is money lending transactions, they are considered as BITT taxpayers within the scope of bankers. BSMV is calculated at a rate of 1% on the money received as a result of interbank deposit transactions.
Unlike banks, finance companies do not have the authority to collect deposits, but they can provide loans with external resources obtained from banks and financial institutions in addition to their own resources.
The authority to regulate and inspect the activities of consumer finance companies belongs to the BRSA.
Frequently asked Questions
Is BSMV refund possible?
BSMV refund is possible under certain conditions. These include situations such as BSMV being collected incorrectly, BSMV being collected too high, or BSMV not being collected at all. Individuals who encounter these situations can claim their rights by making the necessary application for BSMV refund.
Which transactions are subject to BSMV?
BSMV is collected from many types of transactions carried out by banks and insurance companies. These include loan usage, account maintenance fees, money transfers, credit card usage, insurance premiums and many more.
What is the BSMV Rate in 2023?
BSMV rate was increased from 5% to 10% in consumer loans with the Presidential decision No. 5729. As of 11.06.2022, BSMV rate is applied as 10% on consumer loans. You can access the Official Gazette publication here.
Some information used in the article is quoted from the BSMV Theory – Practice – Legislation Book published by TTB.
https://www.tbb.org.tr/Content/Upload/Dokuman/2144/BSMV_OCMC_Kitap.pdf
