Tax Law

Tax Law is a branch of law that regulates all legal relations regarding taxes collected by the state and other public legal entities from individuals and legal entities, based on sovereign authority, to finance public services. This field covers the subjects, types, and rates of taxes, collection methods, rights and obligations of taxpayers, powers of the tax administration, and the resolution of tax disputes.

The fundamental sources of tax law include the Constitution, the Tax Procedure Law, the Income Tax Law, the Corporate Tax Law, the Value Added Tax Law, the Law on the Collection Procedure of Public Receivables, and numerous circulars, general circulars, directives, and special rulings. The abundance and continuous updating of these sources make tax law a field requiring technical knowledge and expertise.

As a branch with a complex structure involving both public and private law, it requires technical knowledge and expertise due to the vast number of regulations, communiqués, and constantly updated circulars.

Types of Taxes

The Turkish tax system is classified into three main categories:

· Taxes on Income and Earnings:

• Income Tax: A progressive tax applied to the income of natural persons.
• Corporate Tax: Applied to the earnings of capital companies and other legal entities.

Taxes on Wealth:

• Inheritance and Gift Tax: Levied on the acquisition of property through death or unrequited transfer.
• Motor Vehicle Tax (MTV): An annual tax on motor vehicle owners.
• Real Estate Tax: An annual tax on owners of buildings and land.

Taxes on Expenditure:

• Value Added Tax (VAT / KDV): The primary indirect tax on the delivery of goods and services.
• Special Consumption Tax (SCT / ÖTV): Levied on specific goods (petroleum products, automobiles, alcohol, tobacco).
• Banking and Insurance Transactions Tax (BSMV): Levied on specific banking and insurance operations.
• Stamp Duty & Fees: Levied on specific documents and public services.
• Harçlar: Kamu kurum ve kuruluşlarının verdiği hizmetler karşılığında alınan ödemelerdir.

Kişisel ve Ticari Vergi Sorumlulukları

Tax law regulates the different tax responsibilities of both individuals and businesses.

Individual Liabilities: Declarations and payments for wages, rental income, capital gains, and professional earnings.

Commercial Liabilities: Obligations regarding VAT declarations, income tax withholding for employees, social security premiums, bookkeeping, and the issuance of legal documents.

• VAT declaration and payment obligation on the sale of goods and services.
• Obligation to withhold and pay income tax for employees.
• Social security contribution payment obligation
• Stamp duty, fees and other financial obligations
• Obligations regarding keeping ledgers and documents
• Declaration filing obligations

Failure to fulfill tax obligations on time and in full may result in penalties such as tax evasion penalties, irregularity penalties, special irregularity penalties, and late payment interest.

Vergi Hukukunda Yargı Yolu

In the resolution of tax disputes, administrative remedies should first be exhausted, and then, if necessary, judicial remedies should be pursued.

Administrative Remedies:

• Conciliation: In cases of taxes assessed and penalties imposed as a result of a tax audit, conciliation can be requested either before or after the assessment.
• Correction and Complaint: An application is made to the tax office if the tax has been incorrectly calculated or an erroneous transaction has occurred.
• Repentance and Amendment: A penalty reduction is applied if the taxpayer voluntarily declares situations that caused a tax loss.

Judicial Remedies: Tax courts are the competent and authorized courts for tax disputes. In tax courts:

• Lawsuits for the annulment of tax and penalty notices
• Lawsuits for the annulment of payment orders
• Lawsuits for the annulment of seizure and sale procedures
• Annulment lawsuits can be filed against other actions of the tax administration.

Against decisions of the tax court, an appeal can be made to the Regional Administrative Court, and then to the Council of State.

International Tax Law

With the globalizing economy, international commercial activities and cross-border transactions have become widespread, making international tax law significant. International tax law regulates the relationships between different countries’ tax systems and aims to resolve double taxation issues.

Double Taxation Treaties (DTTs): These agreements, signed by Turkey with many countries, prevent the same income from being taxed in both countries or reduce the tax burden.

Transfer Pricing: Transactions between related parties must be conducted in accordance with the arm’s length principle. Non-compliance with transfer pricing regulations may lead to disguised profit distribution or disguised capital application.

Controlled Foreign Company (CFC) Income: There are special regulations regarding the income of foreign companies controlled by resident institutions in Turkey, located in countries with low tax rates.

Information Exchange and Transparency: Turkey is included in the automatic information exchange system within the framework of OECD and EU regulations. In this context, financial accounts in foreign countries are reported to the tax administration.

Legal Support for Private Rulings, Correction, and Complaint Applications

Various administrative application mechanisms exist to eliminate uncertainties and correct errors in tax practices.

Private Ruling (Mukteza) Applications: Taxpayers can request a written opinion from the tax administration regarding the tax consequences of transactions they plan to undertake. Private ruling applications are of great importance in preventing future tax disputes. However, preparing the private ruling request correctly from a legal and technical perspective is critical for the request to be accepted and for an opinion to be obtained in the desired direction.

Correction and Complaint Applications: These applications, regulated between Articles 116-124 of the Tax Procedure Law, are administrative applications made against erroneous actions of the tax office. Correction is made when the tax is incorrectly calculated or an erroneous transaction occurs; a complaint is made against other taxation-related actions.

It is of great importance to prepare these applications in due form, submit all necessary documents completely, and comply with legal deadlines. Professional support increases the chance of a favorable outcome for the application and often allows the problem to be resolved without the need for litigation.

Why Do You Need a Tax Lawyer?

The complexity of tax legislation, constantly changing regulations, different interpretations by tax offices, and discrepancies in tax jurisprudence necessitate taxpayers seeking professional support in tax law.

Role of a Tax Lawyer:

• Correct interpretation and application of tax legislation
• Tax planning and risk management
• Representation and defense in tax audits
• Negotiation and representation in conciliation commissions
• Litigation follow-up in tax courts
• Preparation and follow-up of administrative applications
• Defense and reduction of tax penalties
• Consultancy in international tax disputes

A tax lawyer protects the taxpayer’s rights, prevents unnecessary tax and penalty accruals, and resolves disputes in the fastest and most cost-effective manner. Especially in high-value assessments, working with a tax lawyer can significantly reduce financial losses.

Our Consultancy Services Regarding Tax Law

As Akdemir Legal, we offer comprehensive consultancy and legal representation services in the field of tax law:

• Preparation of tax lawsuit petitions and follow-up of the entire judicial process
• Preparation of conciliation commission applications and representation in the negotiation process
• Legal consultancy and defense preparation during tax audits
• Preparation of private ruling, repentance, correction, and complaint applications
• Legal evaluation of tax audit reports
• Legal applications against payment orders, seizure, and sale procedures
• Consultancy in transfer pricing and international tax disputes
• Tax planning and risk analysis
• Defense against allegations of forged documents and tax evasion
• Consultancy in corporate tax structuring and reorganization processes

We are by your side with our expert team to best protect your rights in tax disputes and to relieve you from unnecessary tax and penalty burdens. You can contact us for detailed information and professional support. [/vc_column_text][/vc_column][/vc_row]