PREFACE
There have been a number of literatures written on tax law and Turkish Tax System; but concerning these fields, we find only few studies produced in English language mainly in 90s, most of which now remain outdated due to often amendments made in the tax legislation upon the dynamic nature of the tax system. Under these circumstances, a need for such a study in English, which covers the tax law and Turkish Tax System by also reflecting on the up-to-date legislation, has arisen for the private sector representatives doing business with the foreigners and the state authorities negotiating with the foreign countries as well as the academicians/students who delivers/receives the tax courses in English in the schools.
To satisfy this need, following my first book named Tax Law and Turkish Tax System published in May 2009 and the second book named Taxation in Turkey published in January 2011, this updated and enhanced book in English has been produced on the basis of a text which compiles the examined Turkish literature on the subject and the tax legislation and the relevant explanatory guidelines issued by the Presidency of Revenue Administration. Accordingly, this study does not intend to bring a new approach to the tax law or Turkish Tax System; however it aims at presenting a book in English, which contains concise information gathered from various notable studies, legislation and guidelines written up to now, to the use of all interested parties.
In the first part, named “Tax Law”, of this study, the book called “Vergi Hukuku ve Türk Vergi Sistemi (Ders Notları)” by A. Işık, H. Yıldız, T. Gürdal, N. Altun, N. Karaca, F. Aygen and T. Peran (produced in 2004) is highly benefited from as the main source. In the second part, named “Turkish Tax System”, the legislation and guidelines published by Presidency of Revenue Administration have been used to a great extent. The text produced in this way have been introduced as notes during the courses that I have been personally giving in the Universities of Bilkent and METU, and finally matured by the feedback of students.
Furthermore, with a view to enlighten the Turkish meaning of the terminology used in this study, a glossary section is included too.
I wish that this book, like the previous ones, will be useful to both the interested practitioners and academicians.

CONTENTS

CHAPTER ONE
TAX LAW

Section One
INTRODUCTION TO TAX LAW

I. TAX LAW IN GENERAL CONTEXT OF LAW, ITS SUBJECT, BRANCHES AND DEFINITION 1
A. Tax Law in General Context of Law 1
B. Subject of Tax Law 1
II. SOURCES OF TAX LAW 1
A. Sources Issued by Legislative Body 2
B. Sources Issued by Executive Body 4
C. Sources Arisen from Judicial Body 5
D. Other Sources 6
III. IMPLEMENTATION OF TAX LAWS 7
A. Implementation of Tax Laws in terms of Time 7
B. Implementation of Tax Laws in terms of Location 7
C. Implementation of Tax Laws in terms of Meaning (Interpretation in Tax Law) 7

Section Two
PARTIES OF TAXATION

I. TAXATION AUTHORITY 10
II. LIABLE PARTIES FOR TAXATION 10
A. Taxpayer (liable) 10
B. Party Responsible for Tax 10
C. Tax Capacity 13

Section Three
TAXATION PROCESS

I. EVENTS GIVING RISE TO TAXATION 14
II. ASSESSMENT OF TAX 15
A. Description 15
B. Assessment Based on Declaration 15
C. Unilateral (one-sided) Assessment by Tax Administration 16
III. NOTIFICATION OF TAX 17
IV. ACCRUAL OF TAX 18
V. COLLECTION OF TAX 18
A. Notion of Collection 18
B. Payment Period 18
C. Consequences of not Paying Taxes in Due Time 19

Section Four
OBLIGATIONS OF TAXPAYERS AND PERIODS IN TAX LAW

I. OBLIGATIONS OF TAXPAYERS 22
A. Obligation to Submit Declaration 22
B. Obligation to Keep Books 22
C. Obligation to Follow Document Format 25
D. Obligations of Recording Entry 27
E. Obligations Related to Vise of Books 27
F. Obligation to Preserve Documents 28
G. Obligation to Submit Tax Return 28
H. Obligation for Valuation 28
II. PERIODS IN TAX LAW 28
A. Classification of Periods 28
B. Calculation of Periods 29
C. Extension of Periods 29

Section Five
TAX OFFENCES AND TAX PENALTIES

I. NOTIONS OF OFFENCE AND PENALTY 31
II. TAX OFFENCES AND TAX PENALTIES IN TURKEY 32
A. Irregularity Offences and Fines Applied 32
B. Special Irregularity Offences and Fines Applied 34
C. Acts Leading to Tax Loss and Penalties Applied 36
D. Acts Leading to Freedom Limiting and Their Punishments 38
E. Payment Time of Tax Penalties, Situations in which Penalties are Inapplicable,
     Rebate and Lapse of Time 39

Section Six
TAX ADMINISTRATION AND TAX AUDIT

I. TAX ADMINISTRATION 40
A. Administrative Organization 40
B. Audit Units 40
C. Assessment Committees 40
II. TAX AUDIT 40
A. Spot-Checks 41
B. Tax Examination 41
C. Tax Investigation 41
D. Information Collecting 41

Section Seven
REASONS CEASING OR MITIGATING TAX DEBT AND/OR TAX PENALTY

I. PAYMENT 43
II. PRESCRIPTION (LAPSE OF TIME) 43
A. Kinds of Prescription 43
B. Suspension and Interruption of Prescription 44
C. Juridical Consequences of Prescription 44
III. CONCILIATION 44
A. Subject and Scope of Conciliation 44
B. Conciliatory Circumstances 44
C. Forms of Conciliation 45
D. Consequences of Conciliation 45
E. Conciliation Committees 46
F. Pre-Assessment Conciliation 46
IV. CORRECTION 50
A. Definition of Tax Error 50
B. Types of Tax Errors 50
C. Correction of Tax Errors 51
V. CANCELLATION 51
A. Cancellation due to Natural Disasters 51
B. Cancellation due to Impossibility of Collection 52
C. Renouncement of Accrual 52
D. Cancellation by Judicial Order 52
VI. POSTPONEMENT 52
VII. OFFSETTING 52
VIII. DEATH 52
IX. AMNESTY 52
X. REPENTANCE 52
XI. REDUCTION IN PENALTIES 53

Section Eight
TAX DISPUTES AND METHODS OF RESOLUTION

I. ADMINISTRATIVE METHODS OF RESOLUTION OF TAX DISPUTES 54
II. JUDICIAL METHODS OF RESOLUTION OF TAX DISPUTES 54
A. Tax Judgment/Jurisdiction 54
B. Fundamentals of Filing a Tax Lawsuit 54
C. Competent Courts and Legal Actions 55
D. Extraordinary Legal Actions 58

CHAPTER TWO
TURKISH TAX SYSTEM

Section One
TURKISH TAX SYSTEM

I. INTRODUCTION 61

Section Two
PERSONAL INCOME TAX

I. INCOME TAX 63
A. Concept of Income 63
B. Types of Income Tax 63
II. INCOME IN PERSONAL INCOME TAX LAW 64
III. SUBJECT AND LIABLE PERSON IN PERSONAL INCOME TAX 64
IV. FEATURES OF INCOME IN PERSONAL INCOME TAX 65
A. Subject of tax shall be composed of incomes of real persons 65
B. Personal income tax shall be applied to incomes obtained in a calendar year 65
C. Income is a concept that takes all incomes of a real person into consideration 65
D. Income shall have been obtained 66
E. Income shall be determined on real basis 66
F. Income shall be considered as net amount 67
V. LIABILITY IN PERSONAL INCOME TAX 67
A. Full Tax Liability 67
B. Limited Tax Liability 69
VI. EXEMPTIONS AND EXCLUSIONS IN PERSONAL INCOME TAX 69
A. Exemptions 70
B. Exclusions 71

Section Three
ELEMENTS OF PERSONAL INCOME TAX AND DETERMINATION OF TAX BASE

I. COMMERCIAL INCOME 79
A. Concept of Commercial Income 79
B. Scope of Commercial Income 79
C. Features of Commercial Activity 80
D. Status of Partners’ Incomes with Respect to Commercial Income 82
E. Methods for Determination of Commercial Income 83
F. Deductible and Non-deductible Expenses in Determination of Commercial Income 93
G. Taxation of Construction and Repair Works Over (Extending to) Years 96
H. Exemptions and Exclusions in Commercial Income 100
II. AGRICULTURAL INCOME 102
A. Concepts of Agricultural Enterprise, Farmer and Crop 103
B. Taxation of Agricultural Income 103
III. WAGES AND SALARIES 107
A. Definition of Wages and Salaries 107
B. Definition of Employer 108
C. Real Net Value of Wages and Salaries 108
D. Other Wages and Salaries 109
E. Taxation of Wages and Salaries 110
F. Exemptions and Exclusions in Wages and Salaries 110
G. Minimum Subsistence (Personal) Allowance for Wage and Salary Earners 115
IV. SELF-EMPLOYMENT INCOME 116
A. Self-employed Person 116
B. Determination of Self-employment Income 117
C. Professional Expenses in Determination of Self-employment Income 118
D. Exclusions in Self-employment Income 119
V. REVENUES FROM IMMOVABLE PROPERTIES 119
A. Determination of Net Revenue in Revenues from Immovable Properties 120
B. Gross Revenue in Revenues from Immovable Properties 120
C. Principle of Imputed Rent Value in Revenues from Immovable Properties 121
D. Deductible Expenses in Revenues from Immovable Properties 121
E. Exclusion Amount in Revenues from Immovable Properties 122
F. Cases related to Taxation of Revenues from Immovable Properties 123
VI. REVENUES FROM MOVABLE PROPERTIES 125
A. Cases where Revenues shall not be considered as Revenues from Movable Properties 127
B. Exclusions in Revenues from Movable Properties 127
C. Determination of Net Revenue in Revenues from Movable Properties 127
D. Declaration of Revenues from Movable Properties with Annual Tax Return 128
VII. OTHER INCOMES AND REVENUES 131
A. Appreciation Gains 131
B. Incidental Incomes 133

Section Four
ASSESSMENT AND COLLECTION PROCESSES IN PERSONAL INCOME TAX

I. DECLARATION OF INCOME AND TYPES OF TAX RETURNS 135
A. Declaration Principle 135
B. Types of Tax Returns in Personal Income Tax 140

II. ASSESSMENT AND PAYMENT OF PERSONAL INCOME TAX 146
A. Assessment of Personal Income Tax 146
B. Advance Tax 147
C. Offsets in Personal Income Tax 149
D. Payment of Personal Income Tax 152
E. Cases related to Personal Income Tax 152

Chapter Five
CORPORATE INCOME TAX

I. SUBJECT AND TAXPAYERS 155
A. Subject of Corporate Income Tax 155
B. Corporate Income Taxpayers 155
C. Types of Tax Liability in Corporate Income Tax 157
II. EXEMPTIONS AND EXCLUSIONS 157
A. Exemptions in Corporate Income Tax 157
B. Exclusions in Corporate Income Tax 159
III. DETERMINATION OF TAX BASE, DECLARATION AND PAYMENT FOR FULL TAXPAYER CORPORATIONS 165
A. Net Corporate Income 165
B. Deductible Expenses 167
C. Loss Offset 167
D. Other Deductions 169
E. Non-Deductible Expenses 171
F. Declaration of Corporate Income Tax 176
G. Tax Deduction (Stoppage) and Withholding Tax Return 176
H. Taxation Period and Assessment 178
I. Payment of Tax and Payment Period 179
IV. DETERMINATION OF TAX BASE, DECLARATION AND PAYMENT FOR LIMITED TAXPAYER CORPORATIONS 179
A. Net Corporate Income 179
B. Taxation Period and Declaration 180
C. Special Declaration 181
D. Assessment and Payment of Tax 181
E. Tax Deduction (Stoppage) and Withholding Tax Return 182
V. CORPORATE INCOME TAX AND ADVANCE TAX RATES AND OFFSET OF PAID TAXES FOR FULL AND LIMITED TAXPAYER CORPORATIONS 185
A. Tax Rates of Corporate Income Tax and Advance Tax 185
B. Offsetting Taxes Paid Abroad 187
C. Offsetting Taxes Paid at Home Country 189
D. Cases related to Corporate Income Tax 190

Section Six
VALUE ADDED TAX

I. SUBJECT OF TAX 193
A. Delivery and Occasions Considered as Delivery of Good 193
B. Service and Occasions Considered as Performance of Service 194
C. Conduct of Transactions in Turkey 194
D. Transactions Constituting Subject of Tax 194
II. TAXPAYER AND PARTY RESPONSIBLE FOR TAX 195
A. Taxpayer of Value Added Tax 195
B. Party Responsible for Value Added Tax 196
III. EVENTS GIVING RISE TO TAXATION 197
IV. EXCLUSIONS 197
A. Exclusion in Exportation 197
B. Exclusion in Vehicles, Precious Metals and Oil Prospecting Activities,
     National Security Expenditures and Investments 199
C. Exclusion in Transportation 201
D. Diplomatic Exclusion 202
E. Importation Exclusion 202
F. Social and Military Exclusions and Other Exclusions 202
V. RENOUNCEMENT FROM EXCLUSION AND LIMITS OF EXCLUSIONS 207
A. Renouncement from Exclusion 207
B. Limits of Exclusions 207
VI. TAX BASE, TAX RATES AND DEDUCTION 207
A. Tax Base in Value Added Tax 207
B. Elements Included and not Included in Tax Base 209
C. Value Added Tax Rates 210
D. Tax Deduction 210
VII. METHOD OF TAXATION AND DECLARATION OF TAX 212
A. Method of Taxation 212
B. Period of Taxation 212
C. Declaration Principle 213
D. Term to Submit Tax Return 213
VIII. ASSESSMENT PROCEEDINGS 213
A. Place of Assessment 213
B. Addressee of Assessment 214
C. Time of Assessment 214
IX. PAYMENT OF TAX 214
X. VAT COLLECTED BY CUSTOMS ADMINISTRATION 215

Section Seven
EXCISE DUTY (SPECIAL CONSUMPTION TAX)

I. SUBJECT OF TAX 216
A. Subject of Excise Duty 216
II. EVENTS GIVING RISE TO TAXATION 217
III. TAXPAYER AND PARTY RESPONSIBLE FOR TAX 218
A. Taxpayer of Excise Duty 218
B. Party Responsible for Excise Duty 218
IV. EXCLUSIONS 218
A. Exportation Exclusion 218
B. Diplomatic Exclusion 219
C. Other Exclusions 219
V. POSTPONEMENT OF TAX 221
VI. TAX DEDUCTION AND REFUND 221
VII. TAX BASE AND TARIFF OF TAX 222
A. Taxation Measurements and Tax Base 222
B. Tariff of Tax 222
VIII. DECLARATION, ASSESSMENT AND PAYMENT OF TAX 223
IX. EXCISE DUTY COLLECTED BY CUSTOMS ADMINISTRATIONS 224


Section Eight
BANKING AND INSURANCE TRANSACTION TAX

I. SUBJECT OF TAX 225
II. EXCLUSIONS 225
III. TAXPAYER AND TAX BASE 227
IV. TARIFF OF TAX 227
V. ASSESSMENT, DECLERATION AND PAYMENT OF TAX 229

Section Nine
SPECIAL COMMUNICATION TAX

I. SUBJECT AND TARIFF OF TAX 230
II. TAXPAYER 230
III. TAX BASE AND PAYMENT OF TAX 230

Section Ten
MOTOR VEHICLES TAX

I. SUBJECT OF TAX AND TAXPAYER 231
A. Subject of Motor Vehicles Tax 231
B. Taxpayer of Motor Vehicles Tax 231
II. EXCLUSIONS 231
III. TARIFF OF TAX 232
IV. ASSESSMENT, NOTIFICATION AND PAYMENT OF TAX 235
A. Assessment, Accrual and Notification of Motor Vehicles Tax 235
B. Payment of Motor Vehicles Tax 235
V. INFORMING AND RESPONSIBILITY IN MOTOR VEHICLES TAX 235

Section Eleven
INHERITANCE AND GIFT TAX

I. SUBJECT OF TAX 237
II. EXEMPTIONS AND EXCLUSIONS 237
A. Exemptions 237
B. Exclusions 237
III. TAXPAYER 238
IV. ASSESSMENT AND DECLARATION OF TAX 239
V. TAX BASE AND FIRST ASSESMENT OF TAX 239
VI. ELEMENTS TO BE DEDUCTED FROM TAX BASE 240
VII. ASSESMENT AND TARIFF OF TAX 241
VIII. TAX RELATED SAFETY PRECAUTIONS 241
IX. PERIOD OF TAX PAYMENT 241

Section Twelve
REAL ESTATE TAX

I. BUILDING TAX 242
A. Subject of Building Tax 242
B. Taxpayer of Building Tax 242
C. Exemptions and Exclusions in Building Tax 242
D. Tax Base and Tariff of Building Tax 245
E. Assessment and Accrual of Building Tax 246
II. LAND TAX 246
A. Subject of Land Tax 246
B. Taxpayer of Land Tax 246
C. Exemptions and Exclusions in Land Tax 247
D. Tax Base and Rate of Land Tax 249
E. Assessment and Accrual of Land Tax 249
III. SUBMITTION OF DECLARATION AND DECLARATION PERIOD IN BUILDING AND LAND TAXES 249
IV. PAYMENT OF BUILDING AND LAND TAXES 250

Section Thirteen
STAMP DUTY

I. SUBJECT AND TARIFF OF DUTY 251
A. Determining Qualifications of Papers 251
B. Having More Than One Copy of Papers 251
C. Having More Than One Contract and Transaction on Papers 251
D. Papers with More Than One Signature 252
E. State Office 252
F. Exclusions 252
II. TAXPAYER 252
III. ASSESMENT AND PAYMENT OF DUTY 252
A. Taxation Measurements 252
B. Obligation to Present Specific Amount of Money 253
C. Tariff 253
D. Payment of Duty 253
E. Responsibility 254

REFERENCES 257
GLOSSARY 259

Barkod

: 9789758899166

Yayınevi

: Gözlem Yayıncılık

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ISBN

: 9789758899166

Dili

: İngilizce

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Basım Yeri

: Ankara

Baskı Sayısı

: 3. Baskı

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Diğer

: Ahmet Başpınar
Ahmet Başpınar was born in Çankırı, in 1974. Mr. Başpınar had his primary and secondary education in Çankırı and high school degree in Ankara. He is a 1995 graduate of Ankara University, Faculty of Political Science. He received his Master’s Degree in Finance from Boston University in 2003 and PhD in Accounting and Finance from Başkent University in 2008.
He worked successively as Assistant Financial Inspector, Financial Inspector, Chief Financial Inspector and Head of Department in the Ministry of Finance between 1996 and 2010. He resigned from the Ministry of Finance and opened his Office of Sworn CPA in 2011.
He also worked as Resident Twinning Adviser Counterpart of an EU Twinning Project between 2005 and 2006, and managed a World Bank project in the years of 2009 and 2010.
He is the holder of Sworn CPA (Certified Public Accountant), Auditor and CFE (Certified Fraud Examiner) certificates.
He has been teaching as part-time instructor at Middle East Technical University and Bilkent University since 2006.
He has so far written three books and many articles published in various journals.
He is fluent in English, beginner in Russian and French.