LEGAL STRUCTURE OF TURKISH TAX SYSTEM

1. LEGAL STRUCTURE OF TURKISH TAX SYSTEM Birol UBAY 05.03.2012 ANKARA bubay@gelirler.gov.tr Department of EU and Foreign Affairs Birol UBAY Revenue Expert

2. INSTITUTIONAL STRUCTURE TAXATION LEGAL STRUCTURE OF TURKISH TAX SYSTEM Department of EU and Foreign Affairs Birol UBAY Revenue Expert

3. INSTITUTIONAL STRUCTURE LEGAL STRUCTURE OF TURKISH TAX SYSTEM Department of EU and Foreign Affairs Birol UBAY Revenue Expert

4. Ouick View of Revenue Administration Main Features Core Values INSTITUTIONAL STRUCTURE Department of EU and Foreign Affairs Birol UBAY Revenue Expert

5. Ouick View of Revenue Administration • The first fiscal organization in Ottoman Empire was established in the time of Murat the first.(1359-1389) • Until 1838 there was no ministry of finance precisely in Ottoman Empire. Till to that time, the head of the organization dealing with the financial matters was barely a civil servant named as “district treasurer” Department of EU and Foreign Affairs Birol UBAY Revenue Expert

6. Ouick View of Revenue Administration • The General Directorate of Revenues was established with the Law in 1946. • The General Directorate of Revenues transformed to the Presidency of Revenue Administration in May 2005 Department of EU and Foreign Affairs Birol UBAY Revenue Expert

7. Semi-autonomus legal status Taxpayer-oriented organisation Efficient and effective cooperation with related national institutions and international counterparts Basic strategic task: Voluntary Compliance Efficient taxpayer services policy Hierarchic unity among the central and local units Appropriate distribution of responsibilities and authorities Clear definition of roles and responsibilities of the managers Main Features Department of EU and Foreign Affairs Birol UBAY Revenue Expert

8. CORE VALUES Department of EU and Foreign Affairs Birol UBAY Revenue Expert

9. MINISTRY OF FINANCEInstutional Structure- Central Department of EU and Foreign Affairs Birol UBAY Revenue Expert

10. TURKISH REVENUE ADMINISTRATIONInstutional Structure- Central Department of EU and Foreign Affairs Birol UBAY Revenue Expert

11. TURKISH REVENUE ADMINISTRATIONLocation of Tax Office Directorates ( in 29 Provinces) Edirne Zonguldak Sakarya Kahramanmaraş Department of EU and Foreign Affairs Birol UBAY Revenue Expert

12. TURKISH REVENUE ADMINISTRATION Instutional Structure- Tax Office Directorates Department of EU and Foreign Affairs Birol UBAY Revenue Expert

13. TURKISH REVENUE ADMINISTRATION Instutional Structure- Local Tax Office Department of EU and Foreign Affairs Birol UBAY Revenue Expert

14. TURKISH REVENUE ADMINISTRATION Large Taxpayer Unit • LTUwas established in 2006 in İstanbul • Directly connected to the Revenue Administration • To avoid tax loss and evasion, following and auditing large taxpayers more closely • For each large taxpayer, a tax expert is appointed to execute all his/her transactions and to serve him/her Department of EU and Foreign Affairs Birol UBAY Revenue Expert

15. REVENUE ADMINISTRATION STATISTICAL DATA TAXATION TURKISH TAX SYSTEM Department of EU and Foreign Affairs Birol UBAY Revenue Expert

16. TURKISH TAX SYSTEMStatistical Data • Distrubution of Taxpayers according to tax type Department of EU and Foreign Affairs Birol UBAY Revenue Expert

17. TURKISH TAX SYSTEMStatistical Data • Taxation Revenues Data Department of EU and Foreign Affairs Birol UBAY Revenue Expert

18. TURKISH TAX SYSTEM Taxation Department of EU and Foreign Affairs Birol UBAY Revenue Expert

19. Personal Income Tax The net amount of profits and earnings obtained by natural persons in one calendar year are the subjects of the personal income tax. TURKISH TAX SYSTEMTaxation Department of EU and Foreign Affairs Birol UBAY Revenue Expert

20. An individual’s income may consist of one or more income elements Business profits Agricultural profits Salaries and wages Income from independent personal services Income from immovable property and rights (rental income) Income from movable property (income from capital investment) Other income and earnings without considering the source of income TURKISH TAX SYSTEMTaxation Department of EU and Foreign Affairs Birol UBAY Revenue Expert

21. Corporate Income Tax The income and earning derived by corporations and corporate bodies are the subject of corporate tax The income elements for corporate tax are the same as those covered in the PITL CIT is applied at 20 % rate on the corporate earnings TURKISH TAX SYSTEMTaxation Department of EU and Foreign Affairs Birol UBAY Revenue Expert

22. The following entities are the taxpayers of the CIT Capital companies Cooperative companies State Economic Enterprises (public corporations) Economic entities owned by foundations and associations Joint Ventures TURKISH TAX SYSTEMTaxation Department of EU and Foreign Affairs Birol UBAY Revenue Expert

23. Value Added Tax The Turkish tax system levies value added tax on the supply and the importation of goods and services Applied to all stages from producer to consumer TURKISH TAX SYSTEMTaxation Department of EU and Foreign Affairs Birol UBAY Revenue Expert

24. The following transactions carried out in Turkey are subject to VAT Supply of goods and services within the scope of commercial, industrial, agricultural or independent professional activities Importation of all kinds of goods and services Other activities TURKISH TAX SYSTEMTaxation Department of EU and Foreign Affairs Birol UBAY Revenue Expert

25. Excise Duty (Special Consumption Tax) Delivery First acquisition Importation Selling through auction TURKISH TAX SYSTEMTaxation Department of EU and Foreign Affairs Birol UBAY Revenue Expert

26. Delivery,first acquisition, importation and selling through auction of some goods are laid down list numbered I. Petroleum products, natural gas, lubricating oil, solvents and derivatives of solvents II. Automobiles and other vehicles, motorcycles, planes, helicopters, yachts III. Tobacco and tobacco products, alcoholic beverages, cola IV.Luxury products TURKISH TAX SYSTEMTaxation Department of EU and Foreign Affairs Birol UBAY Revenue Expert

27. BANKING AND INSURANCE TRANSACTION TAX SPECIAL COMMUNICATON TAX STAMP TAX CUSTOMS DUTY All transactions of banks and insurance companies and bankers are the subject of the tax. Services of cell phone, cable radio and television broadcasts and telecommunication are generally the subject of the tax. Preparation of the documents related to acts, conclusions, official reports, papers related to commercial transactions and receipts is the subject to the stamp tax. Goods imported from abroad are the subject of the tax. TURKISH TAX SYSTEMTaxation Department of EU and Foreign Affairs Birol UBAY Revenue Expert

28. INHERITANCE AND GIFT TAX REAL ESTATE TAX Building Tax Land Tax MOTOR VEHICLE TAX Items acquired as gifts or through inheritance are subject to taxes between 1% and 30% of the item's appraised value The ownership of the building and setting up usufruct or acting as owner of the building is the subject of the real estate tax The ownership of the land and setting up usufruct or acting as owner of the land is the subject of the land tax Registration of the motor vehicles in the traffic, municipality and docks is the subject of the motor vehicle tax TURKISH TAX SYSTEMTaxation Department of EU and Foreign Affairs Birol UBAY Revenue Expert

29. LEGAL STRUCTURE OF TURKISH TAX SYSTEM Department of EU and Foreign Affairs Birol UBAY Revenue Expert