TAX LAW

When tax law is mentioned, many people think of a complex, ever-changing and extremely difficult to follow pile of legislation. Tax practice does indeed have such difficulties. However, there is also a relatively slower changing and developing aspect of tax law that has been established and stabilised over time.

The fulfilment of public services with tax revenues, which is a basic and general source, is the result of a long evolution of states. Since the private property and enterprise revenues of the state authority, tribute revenues collected from the subjugated states after wars and customs revenues collected from the movement of goods between countries were insufficient to meet public services, it was necessary for the public to contribute to the provision of public services. Over time, the increase in the share of taxes in total public revenues, i.e. the share of taxes taken from the income, wealth and/or expenditures of individuals, which are considered to be indicators of financial power, without being based on the property relationship of the state, has gradually led to the result that taxes have become the most basic and general source of income of the state. In this context, taxes are economic values/moneys that the state and/or other public administrations authorised by the state to tax, collect from real and legal persons, under legal coercion, gratuitously and irrevocably, based on the law and in accordance with the procedure, in order to meet public expenditures.

Scope of Tax Law

Since the branch of law that analyses the legal aspects of public revenues is not yet commonly referred to as revenue law, the term tax law is preferred instead. In this sense, the term tax law is used to include all public revenues obtained by the state based on public power. Thus, in addition to taxes, other public revenues based on public power, i.e. legal coercion, such as taxes (levies), duties, fees and contribution to expenditures, fund income and similar financial obligations are also the subject of tax law in a broad sense. 

However, property and enterprise revenues obtained by the state as a result of its participation in the market economy are outside the scope of tax law in a broad sense, since they do not have an element of coercion. Because, property and enterprise revenues are mainly obtained within the framework of private law relations. Tax law in the narrow sense, on the other hand, includes and analyses only the legal order of taxes, which are a type of fiscal obligations.

Relationship with Criminal Law

The subject matter of criminal law consists of both crimes and misdemeanours and the sanctions / sanctions to be applied to them. The relationship between tax law and criminal law is mostly manifested in the sub-branch of tax law called Tax Criminal Law. Indeed, some of the unlawful acts included in the tax criminal law are regulated on the basis of financial violations and related administrative sanctions, which are administrative misdemeanours in the sense of the Law on Misdemeanours within the framework of the principles of tax law; while some others are directly criminal offences and penalties in the sense of the Turkish Criminal Code. In tax offences, which are considered crimes in the sense of criminal law, the occurrence of the offence, the determination of the offenders, the imposition of the penalty and the trial procedure are, in principle, subject to the provisions of general criminal law and criminal procedure law.

International Tax Treaties

International tax treaties are norms for the prevention of double taxation that arise as a result of states applying their tax laws together with the principles of proprietorship and individuality of laws. In double taxation, the sovereignty of more than one state overlaps. This problem is tried to be solved according to the principles of international law together with the domestic legislation of the relevant states. In other words, states try to solve the problem either by restricting their unilateral taxation authority or by bilateral or multilateral treaties. International tax treaties can be concluded on certain taxation issues as well as the elimination or mitigation of double taxation.

 States conclude treaties with each other for reasons such as preventing international tax evasion and tax avoidance, increasing the efficiency of tax administrations in the assessment and collection of taxes, expanding the exchange of information, harmonising tax laws and facilitating the settlement of disputes. International tax treaties are ratified by the President of the Republic. The ratification or accession to an international treaty is subject to the approval of a law by the Turkish Grand National Assembly. It is at this stage that the legislature intervenes. International treaties are drafted and initialed by bureaucrats from the Ministry of Foreign Affairs and the Ministry of Finance. However, in order for this draft to be binding on the state, it must be approved by the President’s decree. In order for this ratification to take place, the legislature must approve the ratification by a law. However, treaties regulating economic, commercial or technical relations and having a duration not exceeding one year do not require the approval of the Parliament if they do not impose any burden in terms of state finances, if they do not touch the personal status and property rights of Turks in foreign countries or if they are in the form of an implementation treaty of a previously ratified treaty.

What Does a Tax Law Do ?  

Tax lawyers acting on behalf of private clients will attend client meetings and advise on the potential tax liability (e.g. purchase and sale of assets) and the best way to mitigate that liability.

Tax lawyers acting on behalf of companies often work with other teams of lawyers as one aspect of a larger deal, as almost all business transactions involve tax consequences. Typical deals may involve advising on the tax implications of mergers and acquisitions, property deals, restructurings and all forms of finance such as funds, equity and debt.

HMRC is the government body authorised to bring proceedings against a company or individuals. They may also be involved in the defence of cases brought against the government. HMRC lawyers often advise on the implementation of new taxation laws.