1- The transaction will not be subject to stamp duty and tax since the share transfer for JSC is determined as “transfer of the share”. In addition, notarization for such transaction is not mandatory.
2- In terms of income tax; in the event that an LCC changes kind into JSC and instantly issues “share certificate” or “interim certificate”, the acquisition dated of such share or interim certificate is deemed as the incorporation date of the LCC. Following 2 years of the acquisition, no income tax is applied. Thus, it is much healthier to issue share or interim certificate following changing kind rather than direct transfer of LCC shares. The LCC will be exempt from paying stamp duty, tax and income tax.
In accordance with the article 17/4-c of the VAT Law numbered 3065, the transfer and acquisition transactions, also changing kind, that are subject to Corporate Tax Law will not be subject to VAT.
In accordance with the Act of Fees, the new company, JSC, will not be paying any fee at the Land Registry office regarding the real estates that used to be owned by former company, LCC.
In line with the Article 1 of the Stamp Tax Law numbered 488, the documents executed arising from merger, acquisition and spin-off transactions performed within the Corporate Tax Law are exempt from stamp duty.
In conclusion, changing kind transaction can be executed within TRY 4.000-5.000 including, trade registry, and contribution and transaction fees.