Tax Law

Tax is a universal subject. No government can run its administration without mobilizing tax, as tax is a major source of revenue for every government. Taxes are levied so that investment is made in the resources to enable a country to develop, grow and make progress. A sound tax system is vital for the development of the public finances of any country.

The tax regime in Turkey has made unprecedented changes over the last decade in order to ensure simplicity and improve compliance of laws. According to the records of the Revenue Administration in fiscal year 2013, 367.473.551.231 Turkish Lira excise tax was collected. The government has made budget estimate revenue of 348.4 billion Turkish Lira for 2014.

Over a period of 10 years, the tax system in Turkey has undergone significant changes both direct and indirect taxes. The slabs for the imposition of taxes have been modified. Besides that, the rates at which any particular tax is being levied have been restructured as well as the various laws that govern the levying of taxes were being amended.

Tax system in Turkey can be classified into three main categories:

1. Income Taxes

  • taxes on income of individuals:
    Individual’s income may consist of following one or more income elements; business profits, agricultural profits, salaries and wages, incomes of self-employed individuals, revenues from immovable properties and rights (rental income), income from movable property (income from capital investment), other incomes and earnings regardless of its source.
  • taxes on income of corporates:
    All incomes (including capital gains) generated by legal entities are subject to corporate tax unless exempted from tax or excluded under the incentive rules. The income elements by Corporate Tax Law are the same as those covered in the Income Tax Law.

2. Taxes on Expenditure
An expenditure tax is a tax imposed at progressive or flat rates on the expenditure of a taxpayer and may replace or supplement income tax; examples include value added tax, banking and insurance transaction tax and stamp tax.

3. Taxes on Wealth
A wealth tax is conceived of as a levy based on the aggregate value of all household assets, including owner-occupied housing; vehicles, inheritance and gifts and investment in real estate.

Because, tax plays an important part in any business, achieving tax efficiency for transactions and projects can reduce costs and potentially make otherwise unworkable structures financially viable.

We have extensive knowledge of this complex area and are able to guide clients efficiently and thoroughly.

We are regularly engaged by clients to assist them with their national and international tax planning and tax disputes, including:

  • assisting in disputes with the Revenue Administration, Treasury and various local tax authorities, including litigating such disputes in courts,
  • legal advice on tax issues of concluding international transactions, including mergers and acquisitions of companies, restructuring and transactions with real estate,
  • legal advice on application of national and international tax law in business sectors, including international trade,
  • legal advice on tax issues, especially with regard to implementation of investment projects,
  • legal advice on tax legislative and regulatory matters,
  • legal advice on numerous and varied specific tax issues that affect our clients.

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