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INCOME TAXES
 6 Months Ended 12 Months Ended
Jun. 30, 2023
Dec. 31, 2022
INCOME TAXES    
INCOME TAXES

8 — INCOME TAXES

Income taxes — Delaware

Marti is subject to US Federal income taxes and is generally open for examination from the year ended December 31, 2018, forward. There is no income tax expense as of June 30, 2023 and 2022.

Corporate tax — Turkiye

As of June 30, 2023, the corporate tax rate is 20% in Turkiye (December 31, 2022: 23%). Operating loss carryforwards can be deducted against corporate taxable income for a period of 5 years. Turkish Subsidiary are subject to Turkish income taxes and are generally open for examination from the year ended December 31, 2022, forward.

Income withholding tax

10% withholding tax rate applies to profit distributions from the Turkish subsidiary to the Company.

​

20 — INCOME TAXES

Income taxes — Delaware

Marti is subject to US federal income taxes and is generally open for examination from the year ended December 31, 2018, forward.

Corporate tax: Turkey

In Turkey, a statutory income tax rate of 23 percent applied to taxable income generated in 2022 (December 31, 2021: 25 percent, December 31, 2020: 22 percent). After January 1, 2023 an income tax rate of 20 percent will be applied to taxable income. Operating loss carryforwards can be deducted against corporate taxable income for a period of 5 years. Turkish Subsidiaries are subject to Turkish income taxes and are generally open for examination from the year ended December 31, 2022, forward.

​

20 — INCOME TAXES (Continued)

Income withholding tax

10% withholding tax applies to profit distributions from the Turkish subsidiary to the Company.

Income tax expense

For the years ended December 31, 2022, 2021 and 2020 income tax expense was as follows, none of which related to the United States:

​

​

​

​

​

​

​

​

​

    

January 1 – 

    

January 1 – 

    

January 1 – 

​

​

December 31,

​

December 31,

​

December 31,

​

​

2022

​

2021

​

2020

Income tax expense

 

—

 

(887,648)

 

—

Total

 

—

 

(887,648)

 

—

​

For the years ended December 31, 2022, 2021 and 2020 loss before income tax expense consists of the following:

​

​

​

​

​

​

​

​

​

    

January 1 –

    

January 1 –

    

January 1 –

​

​

December 31,

​

December 31,

​

December 31,

​

​

2022

​

2021

​

2020

U.S. operations

 

(4,199,652)

 

(1,934,339)

 

(409,723)

Foreign operations

 

(10,046,226)

 

(11,650,507)

 

(4,220,445)

Total

 

(14,245,878)

 

(13,584,846)

 

(4,630,168)

​

The components of Group’s net deferred tax assets and liabilities are as follows:

​

​

​

​

​

​

​

​

​

    

December 31,

    

December 31,

    

December 31,

​

​

2022

​

2021

​

2020

Deferred tax assets;

​

​

​

​

​

​

Net operating loss carryforwards

 

3,678,381

 

1,690,095

 

1,520,710

Other current assets

 

776,016

 

1,312,997

 

41,298

Stock-based compensation

 

565,018

 

216,918

 

38,050

Operating lease liabilities(*)

 

548,732

 

254,088

 

167,521

Financial liabilities

 

173,587

 

163,011

 

82,808

Accounts receivable, net

 

121,417

 

94,387

 

5,255

Accrued expenses and other current liabilities

 

89,475

 

16,951

 

96,411

Other non-current liabilities

 

71,445

 

14,933

 

11,681

Total deferred tax assets

 

6,024,071

 

3,763,380

 

1,963,734

Deferred tax liabilities;

 

  

 

  

 

  

Property, equipment and deposits, net

 

(1,428,847)

 

(731,113)

 

(379,515)

Operating lease right of use assets(*)

 

(687,993)

 

(254,088)

 

(167,521)

Other

 

(26,798)

 

(42,298)

 

(3,648)

Total deferred tax liabilities:

 

(2,143,638)

 

(1,027,499)

 

(550,684)

Less valuation allowance

 

(3,880,433)

 

(2,735,881)

 

(1,413,050)

Net deferred tax assets

 

—

 

—

 

—

(*)

The Company identified missing disclosures in the December 31, 2021 and 2020 comparative values previously disclosed in this table related to deferred tax balances for operating lease liabilities and operating lease right of use assets. Such amounts were previously omitted from this table, and the net impact on the deferred tax balance was zero. Such amounts have been added in the footnote above. This revision has no impact on the Company’s operating results or financial position for the period.

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20 — INCOME TAXES (Continued)

Assessing the realizability of deferred tax assets requires the determination of whether it is more-likely- than-not that some portion or all the deferred tax assets will not be realized. In assessing the need for a valuation allowance, the Group management considered all sources of taxable income available to realize deferred tax assets, including the future reversal of existing taxable temporary differences, forecasts of future taxable income, and tax-planning strategies. Based on the weight of available evidence, which includes the Group’s historical cumulative net losses, the Group management recorded a valuation allowance on deferred tax assets not supported by reversing taxable temporary differences.

The valuation allowance for deferred tax assets as of December 31, 2022, 2021 and 2020 was US$ 3,880,433, US$ 2,735,881 and US$ 1,413,050 respectively, The following table reflects changes in tax valuation allowances for the years ended December 31, 2022, 2021 and 2020.

​

​

​

​

​

​

​

​

​

    

2022

    

2021

    

2020

January 1,

 

2,735,881

 

1,413,050

 

1,162,612

Net change in the valuation allowance

 

1,144,552

 

1,322,831

 

250,438

– Change in valuation allowance

 

1,224,430

 

2,645,495

 

498,864

– Translation adjustments

 

(79,878)

 

(1,322,664)

 

(248,426)

December 31,

 

3,880,433

 

2,735,881

 

1,413,050

​

As of December 31, 2022, the Group has net operating loss carryforwards for income tax purposes of US$ 18,391,905 (December 31, 2021: US$ 8,416,337). Net operating loss carry forwards are comprised of amounts at foreign subsidiaries of US$ 15,677,287 (December 31, 2021: US$ 7,733,551) which are available to offset future taxable income, if any, which expires between 2023 and 2027 and amounts relating to U.S. operations of US$ 2,714,618 (December 31, 2021: US$ 682,786) which are available to offset future taxable income indefinitely.

Tax rate reconciliation

The following is a reconciliation of the statutory federal income tax rate to the Groups’ effective tax rate for the years ended December 31, 2022, 2021 and 2020:

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​

​

​

​

​

​

​

​

​

​

​

​

​

    

%

    

2022

    

%

    

2021

    

%

    

2020

Loss before income tax:

 

​

 

(14,245,878)

 

​

​

(13,584,846)

​

​

​

(4,630,168)

Income tax benefit at statutory rate

 

21.00

 

2,991,634

 

21.00

 

2,852,818

 

21.00

 

972,335

Tax exempt income

 

—

 

—

 

0.53

 

71,360

 

—

 

—

Nondeductible expenses

 

(5.46)

 

(777,764)

 

(9.92)

 

(1,347,007)

 

(10.39)

 

(481,153)

Currency remeasurement adjustments

 

(3.90)

 

(555,212)

 

—

 

—

 

—

 

—

Change in valuation allowance

 

(8.59)

 

(1,224,430)

 

(19.47)

 

(2,645,495)

 

(10.77)

 

(498,864)

Effect of different tax rates

 

(3.05)

 

(434,228)

 

(2.11)

 

(286,748)

 

(0.75)

 

(34,521)

Change in tax rates

 

—

 

—

 

3.44

 

467,424

 

0.91

 

42,203

Effective tax rate / tax charge:

 

—

 

—

 

(6.53)

 

(887,648)

 

—

 

—

​