1. 01.03.2012Department of EU and Foreign Affairs Birol UBAY Revenue Expert LEGAL STRUCTURE OF TURKISH TAX SYSTEM Birol UBAY 05.03.2012 ANKARA bubay@gelirler.gov.tr

2. 01.03.2012Department of EU and Foreign Affairs Birol UBAY Revenue Expert LEGAL STRUCTURE OF TURKISH TAX SYSTEM –INSTITUTIONAL STRUCTURE–TAXATION

3. 01.03.2012Department of EU and Foreign Affairs Birol UBAY Revenue Expert LEGAL STRUCTURE OF TURKISH TAX SYSTEM INSTITUTIONAL STRUCTURE

4. 01.03.2012Department of EU and Foreign Affairs Birol UBAY Revenue Expert INSTITUTIONAL STRUCTURE Ouick View of Revenue Administration Main Features Core Values

5. 01.03.2012Department of EU and Foreign Affairs Birol UBAY Revenue Expert Ouick View of Revenue Administration The first fiscal organization in Ottoman Empire was established in the time of Murat the first.(1359-1389)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”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”

6. 01.03.2012Department of EU and Foreign Affairs Birol UBAY Revenue Expert 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

7. 01.03.2012Department of EU and Foreign Affairs Birol UBAY Revenue Expert Main Features 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

8. 01.03.2012Department of EU and Foreign Affairs Birol UBAY Revenue Expert CORE VALUES Our Principles FairnessReliabilityImpartiality Solution- oriented Awareness of Responsibility TransparencyEffectivenessCompetency Continuous Development Participation

9. 01.03.2012Department of EU and Foreign Affairs Birol UBAY Revenue Expert MINISTRY OF FINANCE Instutional Structure- Central

10. 01.03.2012Department of EU and Foreign Affairs Birol UBAY Revenue Expert TURKISH REVENUE ADMINISTRATION Instutional Structure- Central

11. 01.03.2012Department of EU and Foreign Affairs Birol UBAY Revenue Expert Kahramanmaraş Sakarya ZonguldakEdirne TURKISH REVENUE ADMINISTRATION Location of Tax Office Directorates ( in 29 Provinces)

12. 01.03.2012Department of EU and Foreign Affairs Birol UBAY Revenue Expert TURKISH REVENUE ADMINISTRATION Instutional Structure- Tax Office Directorates TAX OFFICE DIRECTORATE Taxpayer Service Income Group Directorate Personal İncome And Corporate İncome Tax Directorate VAT, Excise Duty Other Taxex and Carriying Agreement Directorate Taxpayer Service Procedural Group Directorate Procedural and Collection Directorate Taxpayers Rights And Communication Directorate Local Tax Offices Commissions and Branches Audit Group Directorate Audit and Coordination Directorate Human Resource Group Directorate Strategy Directorate Human Resource Directore Training Directore Support Service Group Directorate Administrative and Financial Affairs Directore

13. 01.03.2012Department of EU and Foreign Affairs Birol UBAY Revenue Expert TURKISH REVENUE ADMINISTRATION Instutional Structure- Local Tax Office Local Tax Office Directorate Taxation Department Registration and Inspection Service Continued Obligations Taxation Service Tax return receive desk Assessment desk Other imposition desk Account and tracking desk other processes desk Discontinuous Obligations Taxation Service -Motor Vehicle Tax Desk -Vehicle Purchase Tax Desk -Land Registry and Cadastre Fees Desk Inheritance and Gift Tax Desk Other Discontinuous Obligations Desk Disputed Cases Service Other Processes Service Accounting Department -Pay desk Accounting registration service Proceeding Department Enforcement service Sales service Surveliance and Control Department Correspondence, Archive, Personnel Service

14. 01.03.2012Department of EU and Foreign Affairs Birol UBAY Revenue Expert TURKISH REVENUE ADMINISTRATION Large Taxpayer Unit –LTU was established in 2006 in İ stanbul –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

15. 01.03.2012Department of EU and Foreign Affairs Birol UBAY Revenue Expert TURKISH TAX SYSTEM –REVENUE ADMINISTRATION STATISTICAL DATA –TAXATION

16. 01.03.2012Department of EU and Foreign Affairs Birol UBAY Revenue Expert TURKISH TAX SYSTEM Statistical Data Distrubution of Taxpayers according to tax type Tax TypeNumber of Taxpayers (2011) Personal Income Tax1.703.754 Corporate Income Tax 663.967 VAT2.293.765 Immovable Property Tax 1.041.427 Single Entry Taxation 714.693 Witholding Tax2.386.309

17. 01.03.2012Department of EU and Foreign Affairs Birol UBAY Revenue Expert TURKISH TAX SYSTEM Statistical Data Taxation Revenues Data 2011 Tax revenue collection in general budget %84,1

18. 01.03.2012Department of EU and Foreign Affairs Birol UBAY Revenue Expert TURKISH TAX SYSTEM Taxation

19. 01.03.2012Department of EU and Foreign Affairs Birol UBAY Revenue Expert TURKISH TAX SYSTEM Taxation 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.

20. 01.03.2012Department of EU and Foreign Affairs Birol UBAY Revenue Expert TURKISH TAX SYSTEM Taxation 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

21. 01.03.2012Department of EU and Foreign Affairs Birol UBAY Revenue Expert TURKISH TAX SYSTEM Taxation 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

22. 01.03.2012Department of EU and Foreign Affairs Birol UBAY Revenue Expert TURKISH TAX SYSTEM Taxation 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

23. 01.03.2012Department of EU and Foreign Affairs Birol UBAY Revenue Expert TURKISH TAX SYSTEM Taxation 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

24. 01.03.2012Department of EU and Foreign Affairs Birol UBAY Revenue Expert TURKISH TAX SYSTEM Taxation 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

25. 01.03.2012Department of EU and Foreign Affairs Birol UBAY Revenue Expert TURKISH TAX SYSTEM Taxation Excise Duty (Special Consumption Tax) Delivery First acquisition Importation Selling through auction

26. 01.03.2012Department of EU and Foreign Affairs Birol UBAY Revenue Expert TURKISH TAX SYSTEM Taxation 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

27. 01.03.2012Department of EU and Foreign Affairs Birol UBAY Revenue Expert TURKISH TAX SYSTEM Taxation -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.

28. 01.03.2012Department of EU and Foreign Affairs Birol UBAY Revenue Expert TURKISH TAX SYSTEM Taxation -INHERITANCE AND GIFT TAX -REAL ESTATE TAX A.Building Tax B.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 a.The ownership of the building and setting up usufruct or acting as owner of the building is the subject of the real estate tax b.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

29. 01.03.2012Department of EU and Foreign Affairs Birol UBAY Revenue Expert LEGAL STRUCTURE OF TURKISH TAX SYSTEM