What is MSD (AGİ)

The Minimum Survival Discount (MSD) has been applied within the framework of principles determined in account of the tax to be paid by the employees in accordance with the income tax law. The calculated MSD sum is paid to the employee by being deducted from the income tax to be paid by the employee. The MSD sums are calculated by considering the marital status of the employee, number of children the employee is obliged to look after and the minimum wage determined at the beginning of calendar year, and amendments made in the minimum wage in a year do not cause any change in calculation of MSD. If employee's child is over 18 years old, the employee can not take advantage for him. But if the child is studying in university, the employee will be benefit from his child's age will be reached up to 25.

Renting a car for employees is not actually a new practice; yet, it became popular recently due to the advantages it brings.

The Differences Between Purchasing And Renting

There are many advantages to renting a car rather than purchasing one for the company and registering it. Let’s explain the subject and start with the purchasing activity.

1- Purchasing a Car for the Company

a) For the cars purchased within a certain year, it is not possible to amortize them for the year they were purchased, in other words, for 12 months. For the period between the month the car was purchased and the end of the year, it is possible to calculate the monthly amortization and record it as an expense (Article 320 of Tax Procedure Law).

b) The value added tax paid during the purchase cannot be subject to reduction. It can qualify either as an expense or a cost. (Law on Value Added Taxes Article 270/2)