Tax Lawyer in Ankara

Tax can be defined as monetary payments unilaterally and enforceably determined by the state based on its sovereign power in order to cover public expenditures. Tax law examines the legal relationships between the state and the person who is a taxpayer or tax responsible party. The capital city Ankara has more than 40,000 attorneys registered with the Ankara Bar Association, a portion of whom continue their careers in the field of tax law.

In addition to taxes, revenues collected based on public authority, such as fees, duties, funds, premiums, and participation shares, also fall within the broader scope of tax law.

Determining taxation — one of the most fundamental building blocks of the modern state — and its operation, and binding it to predetermined rules, is of great importance. Taxation also plays an important role in directing individual and societal choices. Since the taxes collected are spent on public services, everyone benefits from these services. On the other hand, the process of imposing, determining, and collecting taxes as a whole affects everyone's legal position. Such an important matter must be bound by strict rules. The most fundamental rule on this matter is set out in the Constitution. Article 73 of the Constitution provides that “Taxes, fees, duties, and similar financial obligations shall be imposed, amended, or abolished by law.” Accordingly, a legal basis is absolutely required in order for a given area to be taxed. A new tax cannot be imposed, nor can an existing tax be abolished, through administrative acts.

Taxes may belong to the state's legal personality (the general budget), or they may belong to special provincial administrations and municipalities. Whichever unit a tax belongs to, it will be included in that unit's budget. For example, property tax is a revenue belonging to municipalities and will go into their budget.

In theory, tax law is classified into general tax law and specific tax law. General tax law examines the general procedures and principles relating to tax law.

What Is Tax?

Tax refers to money collected by the government and local administrations from everyone, in accordance with the law, either directly or indirectly by adding to the prices of certain goods, to be spent on public services.

What Are the Types of Taxes?

An individual's assets can be considered at three stages: Earning, Spending, and Holding. People earn money, spend part of it, and save part of it by not spending it. Taxation occurs across all three of these stages.

• Taxation occurring at the earning stage is called “income taxes,”
• Taxation occurring at the spending stage is called “expenditure taxes,”
• Taxation occurring on saved assets is called “wealth taxes,”

These are the names given to them.

It is not possible to list here all of the taxes applied by the state and local administrations. Reviewing the current list of the Revenue Administration (https://www.gib.gov.tr/yardim-ve-kaynaklar/yararli-bilgiler/vergi-turu-kodlari) shows that there are more than 200 types of taxes.

Although their type, tax base, and the items to which they apply vary, it is clear that taxes generally fall into one of the categories of income, expenditure, or wealth taxes. However, an item falling into any of these categories is not subject to tax merely for that reason. For it to be subject to tax, a legal regulation to that effect must exist.

Taxes Levied on Income

Taxes levied on the income earned by individuals and entities are referred to as “taxes levied on income.” This taxation may be collected at the source (withholding), or it may be paid later based on a declaration.

a) Income Tax

In the list of tax codes prepared by the Revenue Administration, code number 0001 corresponds to “annual income tax.” Income Tax is subject to Income Tax Law No. 193 (GVK). Income Tax applies to the income of natural persons.

“The income of natural persons is subject to income tax. Income is the net amount of the earnings and revenues obtained by a natural person within a calendar year.” (Income Tax Law; Art. 1)

Within the meaning of the Income Tax Law, the concept of “income” includes the following earnings and revenues:

1. Commercial earnings,
2. Agricultural earnings,
3. Wages,
4. Self-employment earnings,
5. Income from immovable capital,
6. Income from movable capital,
7. Other earnings and revenues.

This tax is assessed on the earnings and revenues obtained within a calendar year (Income Tax Law; Art. 1).

b) Corporate Tax

In the list of tax codes prepared by the Revenue Administration, code number 0010 corresponds to “corporate tax.” Corporate tax is subject to Corporate Tax Law No. 5520.

Like income tax, corporate tax is applied to earnings. However, the most important difference between the two is that while income tax applies to natural persons, corporate tax applies to corporations and entities.

A review of the provisions of the Corporate Tax Law shows that the earnings of the following entities are subject to corporate tax (Art. 1):

• a) Capital companies
• b) Cooperatives
• c) Public economic enterprises
• ç) Economic enterprises belonging to associations or foundations
• d) Business partnerships

The earnings subject to corporate tax consist of the income items falling within the scope of income tax listed above.

Taxes Levied on Expenditure

Some taxes are levied on individuals' expenditures. Some of these include:

Value Added Tax (VAT)

Value Added Tax is subject to Value Added Tax Law No. 3065. The entire process, from the initial stage of production of a product, good, or service to the final stage of reaching the consumer, is subject to value added tax.

The following transactions carried out in Turkey are subject to value added tax:

1. Deliveries and services carried out within the framework of commercial, industrial, agricultural, and independent professional activities,
2. Import of all kinds of goods and services,
3. Deliveries and services arising from other activities:
   1. Postal, telephone, telegraph, telex, and similar services, as well as radio and television services,
   2. The organization and playing of all kinds of games of chance and fortune,
   3. The organization and presentation of shows and concerts featuring professional artists, and sporting activities, matches, races, and competitions involving professional athletes,
   4. Sales made at auction houses and customs warehouses, and the delivery of product certificates issued under the Agricultural Products Licensed Warehousing Law No. 5300 dated February 10, 2005, to those who will withdraw from the warehouse the product represented by the certificate,
   5. Transportation of crude oil, gas, and their products by pipeline,
   6. Leasing transactions relating to the goods and rights specified in Article 70 of the Income Tax Law,
   7. Deliveries and services of a commercial, industrial, agricultural, or professional nature carried out by institutions belonging to or affiliated with, or established or operated by, general and annexed budget administrations, special provincial administrations, municipalities and villages and the unions they form, universities, associations and foundations, and all kinds of professional organizations, as well as revolving fund institutions or other institutions belonging to or affiliated with them,
   8. Deliveries and services to be taxed through optional tax liability in order to eliminate inequality in competition.

Special Consumption Tax (ÖTV)

Special Consumption Tax is subject to Special Consumption Tax Law No. 4760.

The expenditures subject to this tax consist of items that can be considered relatively special in nature. What these are is determined in the lists attached to the Law.

Taxes Levied on Wealth

These taxes consist of the saved portion of our earnings — that is, our wealth. The most common forms are Property Taxes and the Motor Vehicles Tax.

Motor Vehicles Tax (MTV)

MTV is subject to Motor Vehicles Tax Law No. 197.

“Within the tariffs set out in Articles 5 and 6 of this Law;

a) Motor land vehicles registered and recorded with traffic branches or offices under the Highway Traffic Law

b) Aircraft and helicopters registered and recorded with the Ministry of Transport's General Directorate of Civil Aviation” (Motor Vehicles Tax Law; Art. 1)

This tax is assessed twice a year, in January and July.

Property Tax

Property Tax is subject to Property Tax Law No. 1319. Buildings located within the borders of Turkey are subject to Building Tax under the provisions of this law (Property Tax Law, Art. 1). The term “building” is understood to mean any fixed structure, regardless of the material from which it is built, whether on land or over water. In addition, building fixtures specified in the Tax Procedure Law are also taken into account together with the building. However, floating pools, other floating structures, tents, and mobile homes and similar structures that can be attached to and towed by vehicles are not considered buildings (Property Tax Law, Art. 2).

Building Tax is paid by the owner of the building, or the holder of the usufruct right if one exists, or, if neither exists, by those who possess the building as if they were the owner. Co-owners of a building under shared ownership are liable in proportion to their shares. Under joint ownership, the owners are jointly and severally liable for the tax (Property Tax Law, Art. 3).

Those exempt from this tax are separately regulated in the law (see Art. 4-5).

What Is Tax Law?

What Is Tax Law? The power of taxation, which manifests itself as a form of exercise of public authority, can be defined as the legal and factual power the state possesses to collect taxes across the country based on its sovereign power.

A certain amount of financial resources is needed in order to carry out public services. These resources are met through the exercise of the power of taxation. The way in which the power of taxation and the tax obligation are understood has undergone significant changes over the historical process, depending on the nature of the state and the character of the constitutional order. Under the modern understanding, the power of taxation is based on the state's sovereign authority and, like all powers arising from sovereign authority, must be exercised in accordance with the law.

In this context, the unique form of relationship that arises between the administration and individuals due to taxation is called the “tax law relationship.” This relationship constitutes a special dimension of administrative law.

There are two forms of relationship relevant to tax law: the tax debt relationship and the tax obligation relationship.

The “tax debt” is of a private nature. It contains rights and obligations relating to assets.

The “tax obligation,” on the other hand, is broader in scope and general in nature. In addition to the tax liability itself, those subject to tax obligations include persons who take necessary security measures and keep books and records, officials who must keep confidential the secrets they learn in the course of their duties, and even tax court judges who are prohibited from hearing cases involving certain relatives specified by law.

Tax law is the branch of law that examines all these forms of relationship, regulating tax relationships from an administrative perspective and, where applicable, including sanctions.

Tax relationships constitute a highly specific area of law requiring technical knowledge. Actions and transactions contrary to tax legislation can lead to individuals and companies being subjected to severe administrative sanctions, and in some cases even criminal sanctions. Likewise, administrative cases relating to tax law are subject to much shorter preclusive time limits compared to general administrative cases. For this reason, managing the process in a timely and correct manner is extremely important.

Topics in General Tax Law

• Parties to Taxation (Tax Administration, Taxpayer/Responsible Party)
• The Taxation Process (Assessment, Notification, Accrual, Collection)
• Obligations of the Taxpayer
• Tax Audit
• Time Limits in Tax Law
• Tax Offenses and Penalties (Tax Loss Offense, Procedural Offenses)
• Smuggling, Violation of Tax Confidentiality, Performing the Taxpayer's Private Affairs
• Protection of the Tax Claim (Precautionary Attachment, Precautionary Assessment, Travel Ban, Other Measures)
• Protection of the Value of the Tax Claim (Default Interest, Late Payment Surcharge)
• Reasons That Extinguish or Mitigate the Tax Debt and Penalties
• Statute of Limitations (Assessment Statute of Limitations, Collection Statute of Limitations)
• Settlement (Post-Assessment – Pre-Assessment)
• Correction of Errors, Deferral, and Write-Off Procedures
• Remedies for Tax Disputes (Tax Court, Regional Administrative Court, Council of State)

Topics in Specific Tax Law

Specific tax law examines the taxes we pay within the Turkish tax system. Accordingly:

• Income Tax
• Corporate Tax
• Value Added Tax (VAT)
• Special Consumption Tax (ÖTV)
• Customs Duty
• Banking and Insurance Transactions Tax (BSMV)
• Fees
• Valuable Papers Tax
• Motor Vehicles Tax (MTV)
• Inheritance and Transfer Tax
• Property Tax

Specific tax law examines the assessment, notification, accrual, and collection stages of the taxes within the Turkish tax system, the procedural rules that must be followed during this process, and other matters involved in the taxation process.

The source of Turkish taxation law is Tax Procedure Law No. 213, dated 1961. This law applies to taxes, duties, and fees included in the general budget, as well as taxes, duties, and fees belonging to special provincial administrations and municipalities. In addition, certain taxes are also collected during importation. For these, the rules under Customs Law No. 4458 apply.

While debt relationships arising from private law transactions are pursued under Enforcement and Bankruptcy Law No. 2004, the provisions of Law No. 6183 on the Procedure for Collection of Public Receivables apply to the collection of taxes and similar financial obligations.

Tax Litigation | Tax Judiciary | Tax Judiciary Organization

Within the framework of the binding provision of Article 125 of the 1982 Constitution of the Republic of Turkey, which states that “Recourse to judicial review shall be available against all acts and actions of the administration,” there is a route for filing suit before the tax courts against tax decisions and tax penalties imposed by the tax administrations.

Under Council of State Law No. 2575 and the Administrative Procedure Law No. 2577, the Turkish Tax Judiciary Organization is structured in three tiers. The tax courts serve as the court of first instance. The tax litigation chambers within the regional administrative courts, serving as the appellate body, occupy the second tier. The Council of State, serving as the court of cassation, occupies the third tier.

Main Subjects of Tax Law Litigation

• Cases Filed Against Assessments Relating to Taxes, Duties, and Fees, and the Notices Issued in Connection with Them
• Cases Filed Against Notices of Tax Penalties
• Cases Filed Against Tax Loss Penalties
• Cases Filed Against General Irregularity Penalties
• Cases Filed Against Special Irregularity Penalties
• Cases Filed Against Payment Orders Relating to These Taxes and Penalties
• Cases Filed Against the Establishment of Tax Liability
• Pre-Assessment and Post-Assessment Settlement Applications and Cases
• Voluntary Disclosure Applications and Cases Relating to Taxes and Penalties
• Applications and Cases for Penalty Reduction
• Applications and Cases Relating to Mistake and Force Majeure
• Applications and Cases Against Precautionary Attachment and Precautionary Assessment Procedures
• Applications and Cases Filed with the Tax Office for Correction of Errors, or with the Ministry of Finance for Complaints
• Cases Filed Against Assessments, Rejections, and Penalty Proceedings Arising from Fake/Fraudulent Invoices
• Cases Filed Against Disputes Arising from Exemptions and Exceptions
• Filing Administrative Cases Against Inclusion in the Special Procedures Scope (Code List) and Against Returns Filed with a Protest Notation, Pursuant to the VAT General Communiqué
• Cases Relating to Regulations Introduced by Omnibus Laws That Provide Tax Relief and Reductions to the Principal Tax Amount and Penalties
• Disputes Arising from Informant Rewards Under Law No. 1905