Circular 2026 – 024
A Circular Has Been Issued Regarding the Tax Status of Amounts in the Special Funds Account, Where Differences in Inflation Adjustment of Investment Expenses In Progress Are Tracked
The Circular No. VUK-196/2026-2, dated February 9, 2026, issued by the Presidency of Revenue Administration, provides explanations and sample calculations regarding the exclusion of adjustment differences arising from the inflation adjustment of the fixed assets under construction account from the determination of period earnings and their inclusion in a special fund account. It also covers the increase of the amounts in this fund account by the revaluation rate and their inclusion in the determination of period earnings in the period when the investment is capitalized.
The headings included in the circular are as follows.
Increase in amounts tracked in the special fund account during the investment period at the revaluation rate
With Law No. 7529, the last sentence of paragraph (A) of Article 298 of the Tax Procedure Law (VUK) was amended to include the 10th clause. Accordingly, it was stipulated that the amounts followed in the “Ongoing Investments” account, which are the amounts formed as a result of inflation adjustment and are located in a special fund account on the passive side of the balance sheet and are not taken into account in determining the period's profit, will be increased each year by the revaluation rate determined for the previous year, and will not be subject to inflation adjustment.
The amounts in the special fund account within this scope will be increased by considering the revaluation rate determined for the relevant year, both during the investment period and in subsequent periods. This matter is explained with an example in the circular.
Increase the amounts tracked in the special fund account after the capitalization of the investment at the revaluation rate and determine the amount to be considered in calculating the earnings
The example provided concerns the increase of amounts taken into account in a special fund account at the rate of revaluation after the capitalization of the investment, and the taking into account of these amounts in equal installments within the period when the investment is completed and the relevant economic asset should be capitalized, as well as within the four subsequent accounting periods.
Inclusion of amounts in private funds for the determination of income during interim tax periods
In clause (10) of paragraph (A) of Article 298 of Law No. 213, it is stipulated that the amounts recorded in the special fund account shall be increased by the revaluation rate in the periods following the capitalization of the investment, and that these amounts will be taken into account in equal installments within the period when the investment is completed and the related economic asset must be capitalized, and the following four accounting periods, in determining the periodic earnings. These earnings will also be taken into account in determining earnings during temporary tax periods.
In this context, the portion attributable to the relevant temporary tax period will be taken into account in determining the earnings for temporary tax periods.
Whether the differences arising from the increase in the revaluation rate of private funds will be transferred to the cost.
The circular finally stated that the portions of amounts transferred to the special fund account, increased by the revaluation rate, cannot be transferred to the cost of the economic asset, but no explanation was provided regarding accounting treatment. Accordingly, it is understood that the revaluation difference made can be tracked or recorded outside of accounting, but it cannot be added to the cost; consequently, it will not be expensed, even through depreciation.
You can access the mentioned notification via the following link.
https://www.gib.gov.tr/mevzuat/kanun/434/sirkuler/1136
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