TURKISH TAXATION SYSTEM - Unlimited (full) tax liability, - Limited tax liability. 1- İndividual tax income 2-Corporation tax income  

İndividual Tax İncome 1- Income from commercial activities 2-     Income from agriculture 3-     Income from professionals 4-     Wages ans salaries 5-    Income from capital investments ( interest and dividends) 6-     Income from immovable assets and rights 7-     Other income and earnings.

Corporate Income Tax i- Capital Companies, ii- Co-operative Companies iii- State Economic Enterprise iv-Economic Entities Owned by Foundations and Associations v- Loint Venture.

Value Added Tax  The taxpayer of Value Added Tax is counted in Value Added Tax Law. Although there is no act subject to tax or there is no right to indicate value added tax on invoice or such documents, those who arrange value added tax on such documents have liabilities to pay this tax. This case is also valid for taxpayers that have arranged a higher amount on documents than the amount that should be actually paid. When this tax is paid at a higher amount for such reasons, Ministry of Finance is authorised to return exceeding amonut to those who have no right of reduction. According to Value Added Tax, only the transactions effected in Turkey shall be subject to Value Added Tax.

Banking and Insurance Transaction Banks, bankers and insurance companies are the taxpayers of Banking and Insurance Transaction Tax (BITT). They are subject to this tax for their all money earnings including income coming from the economic actions that are not related with banking and insurance. In other words, all transaction of banks, bankers and insurance companies are under cover of this tax.  

Real Estate Tax Owners of building and land The persons h6aving right of servitudes on building and land, The person who are behaving as an owner of real estate and the right to use these real estate, In joint ownership, the joint owners pay taxes in accordance with their share, The owners of illegal squatter houses pay the real estate tax.

Municipal Income Tax Announcement and Advertisement Tax, Entertainment Tax, Communication Tax, Electricity and Gas Consumption Tax, Fire Insurance Tax, Environment Clean-up Tax Municipal Tax.

Gift and Inheritance Tax Motor Vehicle Purchase Tax Motor Vehicle Tax Fiscal Stamp Tax Law of Fees Fuel Oil Consumption Tax

The Major Problems of The Türkısh Tax Systems *Considerable Portion of The Economy Can Be Clasified As Underground Economy -Reasons 1. The majority of enterprises consists of small and medium size enterprises and their relative weight in the economy is higher than large ones. 2. The weight of the Agriculture sector is high in the economy, and its mostly out of the tax system. 3. Modern payment instruments like check,credit card,wire transfer, and other means of banking sector have limited use. 4. Lack of coordination,communication,and share of information on taxation between tax administration and other Government agencies (Noteries,Municipalty,Title deed,Puplic utulities,Justice adminisstration, Customs, and others). 5. Case law on taxation somewhat tolerate use of fraudulent documents on accounting and taxation base for tax payers (Usually accept expenditure on fraudulent documents as well).

6. No imprisonment for tax evasion on tax laws.   7. High sustained inflation rates have damaged tax system in every aspects in many years. 8. High inflation forces the political authority introduce tax amnesty very often. 9. The tax system and tax administration is open the interferences of political authority. 10.  High tax rates and social security contributions encourage tax evasion. 11.  Lack of competability between tax laws and company laws. 12.  Book and record keeping does not work properly. 13.  Lack of tocontrol systems on taxation.

TAX INSPECTORS BOARD’S Solutions   1.Inducement of incorporations and larger enterprises 2. Take advantages of technological innovations including computerization, and electronic data process. 3. Tax rates should be determined not to encourage tax evasion. 4. Existing five VAT rates to be reduced three. 5. Individual expences and increase in wealth to be used for verification of taxable income. 6. Withholding tax not to be considered as final taxation ( in existing circumstances there is a tendency towards that direction). 7. Taxation of income from capital to be reconsidered ın order to for new financial ınstruments............ 8.Tax incentives, exemptions,deductions,and credits to be reconsidered from the perspectives of free competition and tax neutrality.