Corporate Advisory
Post-Merger Integration
Bringing accounting records, tax obligations, payroll, reporting and accounting systems into a single structure after a merger, demerger or company acquisition.
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Overview
A merger becomes effective on registration with the trade registry; at that moment, the assets and liabilities of the transferring company pass automatically to the acquiring company. (Turkish Commercial Code No. 6102, Art. 153) In a demerger, too, the assets and liabilities shown in the inventory pass to the acquiring companies on registration. (Turkish Commercial Code No. 6102, Art. 179) For tax purposes, the transfer date is the date on which the merger resolution is registered with the trade registry. (Corporate Tax Law No. 5520, Art. 20/1)
From this date, the acquiring company’s books, tax returns, payroll and reports must reflect all of the merged businesses. The transferring company’s final-period return, the acquired VAT (KDV) and losses, the employees’ contracts and the merging of two separate accounting systems are all work carried out in the same period.
KEYBIZ CPAs & Advisors prepares the opening entries as of the transfer date, follows up the transfer return and tax office procedures, merges the payroll and the chart of accounts, and carries out reconciliation and reporting for the first periods after the merger. For pre-transaction due diligence and tax analysis, see our Mergers and Acquisitions page.
First Tax and Personnel Obligations After the Transfer
| What Is Done | Time Limit and Legal Basis | |
|---|---|---|
| Transfer Return | The corporate tax return for the transferring corporation’s income up to the transfer date is signed jointly by the merging corporations and submitted to the transferring corporation’s tax office | 30 days from the announcement of the merger in the Turkish Trade Registry Gazette (Türkiye Ticaret Sicili Gazetesi) (Corporate Tax Law No. 5520, Art. 20/1) |
| Prior-Period Return | If the transfer takes place after the accounting period has closed but before the return for that period has been filed, the return for the prior period is also filed | Corporate Tax Law No. 5520, Art. 20/1 |
| Undertaking for Tax Debts | The acquiring corporation states, by an undertaking attached to the return, that it will pay the accrued and future tax debts of the transferring corporation; the tax office may request a guarantee | Corporate Tax Law No. 5520, Art. 20/1 |
| Acquired VAT | VAT borne and not deducted by the transferring corporation is deducted by the acquiring corporation according to the result of a tax inspection, carried out in a way that does not lead to double deduction and regardless of statute of limitations periods; the VAT exemption for the transaction is a separate matter. From 1.1.2030, VAT that cannot be recovered by deduction over five calendar years becomes non-deductible tax | VAT Law No. 3065, Art. 17/4-c (inspection requirement from 2.8.2024); VAT Law No. 3065, Art. 30/f (from 1.1.2030); Law No. 7524, Art. 19, 20 |
| Acquired Losses | Losses of the acquired corporation not exceeding its equity on the transfer date can be offset; the returns for the last five years must have been filed on time and the acquired business must be continued for at least five years | Corporate Tax Law No. 5520, Art. 9 |
| Employment Contracts | Unless the employee objects, employment contracts pass to the acquirer with all rights and obligations; the contract of an employee who objects ends at the end of the statutory notice period | Turkish Commercial Code No. 6102, Art. 158/4, 178 |
Current texts of TTK No. 6102, KVK No. 5520 and VAT Law No. 3065 on mevzuat.gov.tr (November 2026).
Integration Process
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Transfer-Date Balance Sheet and Opening Entries
The transferring company’s closing balance sheet as of the transfer date is drawn up and the opening entries are made in the acquiring company. In a tax-neutral transfer, the transferring corporation’s balance-sheet values are taken over as a whole and unchanged and carried into the acquiring corporation’s balance sheet. (Corporate Tax Law No. 5520, Art. 19/1)
- Trial balance and closing balance sheet as of the transfer date
- Fixed asset and depreciation lists
- Breakdown of receivables, payables and bank accounts
- Stock count lists
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Merging the Tax Records
The transfer return and, if applicable, the prior-period return are prepared. The transferring company’s tax office records and prior-year losses are documented and transferred to the acquiring company’s records; the documents forming the basis of the tax inspection for the deduction of acquired VAT are prepared. (VAT Law No. 3065, Art. 17/4-c) In a partial demerger, the acquiring corporations are jointly and severally liable for the tax debts of the demerged corporation, limited to the fair market value of the assets they acquired. (Corporate Tax Law No. 5520, Art. 20/3)
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Payroll and Personnel
The records of the acquired employees are transferred to the acquiring company’s payroll; start dates, pay and benefit details and accrued leave records are taken over together. The transferor and the acquirer are jointly and severally liable for the employee’s claims that fell due before the transfer and those that will fall due up to the date on which the contract would end; the employee may request security for claims that have fallen due. (Turkish Commercial Code No. 6102, Art. 178)
For running the payroll, see our Payroll Services page.
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Chart of Accounts and Accounting Systems
The two companies’ charts of accounts are mapped to each other; customer and supplier accounts, stock and fixed asset cards are merged into a single system. Invoicing and document procedures, authorisations and approval workflows are redefined for the new structure.
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Reconciliation and Intercompany Accounts
Receivables and payables between the merging companies are closed out; reconciliations are made with customer, supplier and bank accounts. Acquired guarantees and sureties are listed separately.
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Reporting and Monitoring
In the first periods after the merger, management reports and financial statements are prepared according to the new structure. The five-year business continuation condition for offsetting acquired losses is monitored; if the condition is breached, taxes not accrued on time because of the loss offset are deemed to have been lost. (Corporate Tax Law No. 5520, Art. 9)
For the preparation of financial statements, see our Financial Reporting page.
Frequently Asked Questions
From What Date Does Integration Begin?
A merger becomes effective on registration with the trade registry, and at that moment the assets and liabilities of the transferring company pass to the acquirer. (Turkish Commercial Code No. 6102, Art. 153) For tax purposes, the transfer date is also the date on which the merger resolution is registered. (Corporate Tax Law No. 5520, Art. 20/1) The records are separated according to this date.
Who Files the Transferring Company’s Final Return?
The return for the transferring corporation’s income up to the transfer date is signed jointly by the merging corporations and submitted to the transferring corporation’s tax office within 30 days of the date on which the merger is announced in the Turkish Trade Registry Gazette. (Corporate Tax Law No. 5520, Art. 20/1)
Is the Transferring Company’s VAT Carried Forward Lost?
It is not lost automatically, but its deduction is subject to a condition. In transfers and demergers carried out under the Corporate Tax Law, the transaction itself is exempt from VAT; the deduction by the acquiring corporation of VAT borne and not deducted by the transferring corporation is a separate matter. From 2 August 2024, this VAT is deducted by the acquiring corporation according to the result of a tax inspection, carried out in a way that does not lead to double deduction and regardless of the statute of limitations periods in the Tax Procedure Law. (VAT Law No. 3065, Art. 17/4-c; Law No. 7524, Art. 19)
Under a provision entering into force on 1 January 2030, VAT that cannot be recovered by deduction over five calendar years becomes non-deductible tax. For this reason, the periods in which acquired VAT is to be deducted are monitored separately. (VAT Law No. 3065, Art. 30/f; Law No. 7524, Art. 20, 60)
Does Employees’ Seniority Continue in the Acquiring Company?
In a merger, unless the employee objects, employment contracts pass to the acquirer with all rights and obligations that arose up to the transfer date. (Turkish Commercial Code No. 6102, Art. 158/4, 178) For this reason, the employee’s start date and seniority-based rights are carried over unchanged into the acquiring company’s payroll records.
Under What Conditions Are Acquired Losses Offset?
Losses of the acquired corporation not exceeding its equity on the transfer date can be offset, provided that the acquired corporation’s corporate tax returns for the last five years were filed within the statutory period and the acquired business is continued for at least five years from the transfer date. (Corporate Tax Law No. 5520, Art. 9)
Is Integration Also Needed After a Share Purchase?
In a share purchase, the company continues as a separate legal entity; no transfer return is filed and the employees’ employer does not change. Nevertheless, intra-group reporting, the chart of accounts, approval authorities and related-party transactions need to be organised according to the new shareholding structure.
Legal Basis
- Turkish Commercial Code No. 6102 (6102 sayılı Türk Ticaret Kanunu) Art. 153, 158, 178, 179
- Corporate Tax Law No. 5520 (5520 sayılı Kurumlar Vergisi Kanunu) Art. 9, 19, 20
- VAT Law No. 3065 (3065 sayılı Katma Değer Vergisi Kanunu) Art. 17/4-c, 30/f (entering into force on 1.1.2030)
- Law No. 7524 Amending Tax Laws, Certain Other Laws and Decree Law No. 375 (7524 sayılı Vergi Kanunları ile Bazı Kanunlarda ve 375 Sayılı Kanun Hükmünde Kararnamede Değişiklik Yapılmasına Dair Kanun) Art. 19, 20, 60, Official Gazette 02.08.2024, 32620
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