Economic substance—Turkey—Q&A guide

The following Private Client practice note provides comprehensive and up to date legal information covering:

  • Economic substance—Turkey—Q&A guide
  • 1. What legislation sets out the economic substance requirements in your jurisdiction?
  • 2. What types of entity are subject to the economic substance requirements in your jurisdiction?
  • 3. What activities trigger the economic substance requirements in your jurisdiction?
  • 4. Must entities be tax resident (or deemed tax resident) in your jurisdiction to be subject to the economic substance requirements? If yes, what are the tax residence rules and requirements? If not, do the economic substance requirements in your jurisdiction differ with respect to non-resident entities ?
  • 5. Has the government published guidance on the economic substance requirements?
  • 6. What general economic substance requirements apply in your jurisdiction?
  • 7. What requirements apply in relation to board meetings and the location where entities are directed and managed?
  • 8. What requirements apply in relation to core income-generating activities?
  • 9. What requirements apply in relation to the physical premises of relevant entities?
  • More...

Economic substance—Turkey—Q&A guide

This Practice Note contains a jurisdiction-specific Q&A guide to economic substance in Turkey published as part of the Lexology Getting the Deal Through series by Law Business Research (published: June 2021).

Authors: Nazali Tax & Legal Services—Ersin Nazalı

1. What legislation sets out the economic substance requirements in your jurisdiction?

Tax Procedural Law No. 213, which deals with the basic procedures applicable to all taxes in Turkey since it is a cornerstone of Turkish tax application, sets out economic substance requirements. The first provision of article 3 stipulates that the tax laws shall take effect with their plain meaning and spirit; in cases where the literal construction (wording) is not clear, the provisions of the tax laws shall be enforced by considering their object, their position in the structure of the law and their relationship with the other articles of the law.

The following provision, with the subheading 'Proof (substantiation)', stipulates that the event giving rise to taxation and the true nature of the transactions related to this event shall be taken as 'the merits' and shall be proved by the means of any evidence except 'oath'. (Although the proof by oath is used very commonly in civil procedural law, it is not accepted in tax procedural law. Thus, the taxpayers will not be allowed to offer proof of oath to court in order to substantiate

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