Share Transfers and Tax: Joint Stock Companies, Limited Companies and the Two-Year Rule

A natural person's sale of share certificates in a fully taxable company, held outside a business for more than two years, may fall outside capital-gains taxation under repeated GVK m.80. Gratuitous acquisitions and securities under provisional m.67 follow separate rules. Valid issuance of a certificate or interim certificate and evidence of acquisition timing matter; printing a certificate later does not automatically supply a retrospective two-year exemption.

Joint stock company shares for which no share certificate or interim certificate has been issued do not benefit from the share-certificate exemption in repeated GVK art.80/1; they count as partnership rights and are taxed under repeated GVK art.80/4 irrespective of the holding period, by reference to the difference between the sale price and the cost. This makes physically printing share certificates extremely tax-efficient in joint stock companies.

A limited company may issue a certificate as evidence or in registered form (TTK m.593/2). That document does not automatically carry the tax treatment of joint stock company share certificates. A natural person's non-business sale of a limited-company interest is assessed under repeated GVK m.80/4 without the two-year share-certificate exclusion. Cost indexation, the annual exemption and filing conditions must also be checked.

First determine whether the sale is within VAT scope; a natural person's sale outside business activity is not automatically taxable. For transactions in scope, m.17/4-g concerns delivery of share certificates, while m.17/4-r provides a conditional exemption for corporate participation interests held for at least two full years. An evidentiary certificate for a limited-company interest does not by itself bring the sale within m.17/4-g. Business activity and the other exemption conditions must be assessed.

Where corporate-tax payers sell participating interests held in their assets for at least two full years, 50% of the gain is exempt from corporate tax, subject to the conditions of KVK art.5/1-e. The rate was reduced from 75% to 50% by Presidential Decision No. 9160 of 26 November 2024 (Official Gazette, 27 November 2024). Immovables were removed from the scope of this provision by Law No. 7456 as from 15 July 2023; for immovables already held on that date the exemption rate fell to 25%.

In addition to maintaining the special fund, the sale price must be collected by the end of the second calendar year following the sale, and exclusions apply to securities held for trading by institutions engaged in that activity. The fund must be preserved until the end of the fifth year following the sale; withdrawals other than capitalisation and other specified transactions can breach the exemption.

In corporate-law matters, resolutions, meeting notices, agendas, attendance lists, signature circulars, trade-registry application documents and the articles of association must be reviewed as a whole. In corporate transactions, most disputes arise not from the substance of the resolution but from defects in notice, quorum, representation and registration.

Transactions such as share transfers, amendments to the articles of association, mergers, demergers and liquidations are not completed by internal resolutions alone; notary, trade-registry, tax and accounting dimensions are also part of the process. The legal steps and financial obligations should therefore be planned together when drawing up the transaction timetable.

From the perspective of shareholders or directors, dissenting opinions, information rights, requests for special audit and records of release and liability may carry decisive evidentiary weight in any subsequent action. Minutes of meetings should therefore be prepared in clear and auditable form.