Turkey-Business Environment

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Published: 06 Oct 2008 17:49:22 PST

Standards

Domestic framework and international association: - Member of ISO (International Standard organization)
- Member of IEC (International Electrotechnical Commission)

Independence of justice: Although the Turkish constitution guarantees independent judicial power, the government influences judges as it controls appointments, promotions and financing. For further information, click here.
Equal treatment of nationals and foreigners: Turkey is practically a constitutional State and reforms are introduced where necessary with a view to joining the European Union. Foreign nationals can in principle expect to benefit from an impartial trial in judicial matters. Corruption is a big problem and it exists in all domains. The government is introducing laws to fight it, but they are not implemented severely enough. In general, there is a certain culture of tolerance towards corruption among the population.
The language of justice: Turkish
Having recourse to an interpreter: Possible
Sources of the law and legal similarities: The main source of the law is the constitution of 1982. The country's judicial system is based on a system of civil law derived from different systems in continental Europe:
- Civil and company law close to the German model
- Law of obligations inspired by the Swiss code
- Penal law inspired by the Italian Penal Code
- Administrative Law inspired by that of France

Turkey is a member of the European Court of Human Rights (ECHR).

Domestic network and international agreements: Turkey is adapting the legal framework of industrial property to the directives of the EU. The main advances in this domain are the creation of the Turkish Patents Institute (TPI), the introduction of a regime of penal sanctions and the updating of the Law on Trademarks through a series of decrees.

Type	Text	Date entered into law	Period of validity	Remarks
Patent	Patent Law	On 1995	Period of validity of 20 years

Tax rate: 18%
Reduced tax rate: 1% and 8%.
Other consumption taxes: OTV (Özel Tüketim Vergisi = Special consumption tax) concerns petroleum products, vehicles, tobacco, alcohol, sodas and luxury products.

Tax rate for resident companies: 20%
Tax rate on long-term capital gains: Long term capital gains are taxed in Turkey at the normal IS rate.
System governing groups of companies and dividends paid by subsidiaries to their parent companies: There is no withholding tax for dividends.
Tax rate on branches: Branches and subsidiaries are taxed in the same way as resident companies. A fully foreign-owned subsidiary will be liable for tax on its worldwide income whereas a branch will be liable for tax on its income derived in Turkey only, unless otherwise specified in a treaty.

Tax rate
Allowable deductions and tax credit: The set annual deduction must not go over 35% of the salary. There are other deductions which depend on each person's status (marriage, dependent children, etc.).

Countries with whom a double taxation treaty have been signed: Worldwide Tax .

Tax Authorities: For further information, you can consult the files concerning the Turkish tax system offered by PriceWaterHouseCoopers Turkey.

Tax year: The tax year begins on 1 January and finishes on 31 December of the same year.
Accounting standards: CONSOLIDATED BALANCE SHEET
ASSETS
FLOATING ASSETS
- liquid assets
- Treasury bonds
- short term investments
- receivables
- stocks
- other floating assets
TOTAL FLOATING ASSETS (I)
FIXED ASSETS
- commercial receivables
Accounting reports: The balance sheet and the profit and loss account must be expressed in Turkish currency and drawn up in a clear, complete and easily understandable way quarterly and annually (annual accounting balance sheet).
Accountancy profession: Professionals and organizations authorized to control and then certify company accounts must be subject to Law n°3568.
Certification and auditing: Audit companies:
- Mazars Denge
- Pricewaterhouse Coopers