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accounting processes that Liaison Offices need.
Although Liaison Offices do not carry out commercial activities, transactions regarding their expenses to maintain their existence in Turkey are subject to various rules. It is highly important to regularly record the funds transferred from abroad that are used to cover the expenses of the Liaison Office in Turkey. Although it does not resemble the registry system of capital companies such as Limited Company and Joint Stock Company, Liaison Offices need a ledger system, too. Because these records are reported each year according to a certain discipline and are also subject to various declarations.
As a rule, the amount for Turkish Lira payments from the funds brought in foreign currency should be converted into Turkish Lira at the relevant bank. Foreign Exchange Purchase Documents (DAB) regarding the purchase of Turkish Lira by selling foreign currency should be regularly recorded and declared in the form of an annual report. Besides, different types of income may arise outside of business activity (e.g., the sale of an asset); in that case, there are also declaration procedures to be fulfilled. Lastly, monthly Withholding and Social Security Declaration (MUHSGK) must be submitted to the Institution by an authorized public accountant (Cpa). To sum up, accounting system of the Liaison Office should be established, and its records should be kept and declared regularly. You can visit the frequently asked questions for other obligations. Due to the employee income tax exemption that Liaison Offices have according to the Turkish Tax System, a high level of care should be exercised in keeping and reporting relevant records. You can constantly follow the legislation related to the Liaison Offices from this link. Please contact us now for all necessary transactions regarding establishment, closure, and accounting services.