The Turkish legal system is structured in a dual framework comprising private law and public law. While private law governs civil relations and criminal law between individuals, in administrative and tax law, one party in the dispute is the state or another public legal entity. Actions and operations carried out by the state or public institutions through the exercise of sovereign public power in relation to individuals are subject to the rules of administrative and tax law.

In Turkish law, administrative law has evolved through case law and has not been codified. Therefore, numerous laws, regulations, communiqués, and decrees are concurrently in effect. We are at your service with a qualified and experienced team that can provide the legal support you may need in areas such as:

• Annulment actions against administrative acts
• Compensation claims (full remedy actions) for material and moral damages arising from administrative acts or actions
• Procurement law
• Zoning law
• Tax law
• Customs law
• Concession contracts
• Competition law
• Privatization procedures

Our Services Include

• Legal disputes and litigation related to procurement law, including annulment, complaints, and objections related to tenders
• Privatization procedures
• Preparation and audit of documents concerning administrative acts
• Preparation and review of public procurement specifications
• Drafting, interpreting, and auditing administrative contracts
• Participation in public tenders
• Auditing companies in line with tax regulations and correcting any deficiencies
• Legal support and consultancy for submitting tax declarations and legitimate tax avoidance methods
• All types of tax disputes such as incorrect or incomplete income declarations, erroneous deductions, etc.
• Resolution of tax disputes through reconciliation at the administrative stage
• Tax loss, irregularity, and special irregularity disputes
• Reductions in tax penalties
• Explanation before assessment (“İzaha Davet” mechanism)
• Benefiting from remorse and correction mechanisms in tax penalties
• Consultancy on income tax, corporate tax, property tax, motor vehicle tax, banking and insurance transactions tax
• Legal consultancy regarding tax incentives, exemptions, and exceptions
• Filing necessary objections and executing legal procedures against zoning and occupancy procedures by municipalities
• Annulment lawsuits filed against administrative actions
• Compensation lawsuits arising from administrative actions and transactions
• Applications for stay of execution
• Compensation claims based on service faults, liability due to the principle of social risk, risk liability, and liability based on equality in the face of public burdens
• Compensation claims due to personal fault of public officials
• Disputes arising from concession agreements, imprevision, or “fait du prince”
• Lawsuits related to civil service personnel from appointment to their service records, ranking, and other employment rights
• Disciplinary law, disciplinary proceedings, and submission of defenses
• Annulment of expropriation procedures and compensation disputes seen in judicial courts
• Zoning law, urban transformation law, mass housing projects
• Implementation of the Law on Transformation of Areas Under Disaster Risk (Law No. 6306)

Frequently Asked Questions and Concepts in Administrative Law

Which Disputes Are of Administrative Nature but Fall Under Judicial Jurisdiction?

• Lawsuits concerning land registry
• Lawsuits arising from the implementation of the Cadastre Law
• Lawsuits arising from the implementation of the Forestry Law
• Private law disputes arising from expropriation
• Lawsuits related to civil registry records
• Compensation lawsuits due to faults of enforcement and bankruptcy officers
• Administrative sanction decisions
• Lawsuits concerning intellectual property rights
• Certain lawsuits related to social security and labor law
• Lawsuits arising from private law contracts of the administration
• Lawsuits arising from employment contracts
• Lawsuits arising from the private law operations of State Economic Enterprises (KİT)
• Lawsuits filed by the administration against individuals
• Lawsuits filed against public officials
• Lawsuits arising from traffic accidents involving vehicles owned by the administration
• Disputes arising from de facto roads

What Are the Types of Cases in Administrative Jurisdiction?

In administrative jurisdiction, there are two main types of lawsuits: annulment lawsuits and full remedy actions. In addition, Article 2 of the Administrative Procedure Law also mentions disputes arising from concession contracts and agreements that foresee arbitration.

Article 2 – Types of Administrative Lawsuits:

1. a) Annulment lawsuits filed by those whose interests are violated due to administrative acts that are unlawful in terms of competence, form, reason, subject, or purpose,
2. b) Full remedy actions filed by individuals whose personal rights have been directly violated by administrative acts and actions,
3. c) Lawsuits related to disputes arising from all kinds of administrative contracts made for the execution of public services, excluding those arising from concession contracts and agreements that foresee arbitration.

A – ANNULMENT LAWSUITS

What Are the Characteristics of Annulment Lawsuits in Administrative Jurisdiction?

An annulment lawsuit is defined as a lawsuit filed by those whose rights have been violated due to an administrative act that is unlawful in terms of competence, form, reason, subject, or purpose. The subject of the annulment lawsuit is the administrative act. To file a lawsuit against an administrative act, the act must be unilateral and enforceable. In other words, administrative acts that are not enforceable, such as opinions or advisory administrative acts, cannot be the subject of an annulment lawsuit.

An annulment lawsuit evaluates the legality of the act. The conclusion drawn from this is that administrative jurisdiction cannot perform a review of expediency. Only the annulment of the act can be requested through an annulment lawsuit; compensation for damage resulting from the administrative act cannot be claimed. It is accepted that the violation of a right is sufficient to file an annulment lawsuit.

What Does It Mean for the Act to Be Final in an Annulment Lawsuit?

For an administrative act to be subject to a lawsuit, it must be final and ready for implementation. An annulment lawsuit cannot be filed against a non-final decision. The completion of an administrative act occurs through the declaration of the administrative authority in simple administrative acts or through the sequential and consistent expression of will by multiple authorities or organs in complex acts. In collective acts, the administrative act becomes final through simultaneous and consistent expressions of will by multiple authorities for the same purpose.

Finality is achieved through announcement or notification, depending on the nature of the administrative act. The time limit for filing an annulment lawsuit is calculated by considering the date of such announcement or notification.

What Does It Mean for an Administrative Act to Be Enforceable (Executable)?

In addition to finality, an administrative act must be enforceable to be the subject of an annulment lawsuit. If the unilateral administrative decision is of a declarative, preparatory, or internal regulatory nature, it cannot be considered enforceable and thus cannot be subject to an annulment lawsuit.

What Does It Mean for the Act to Be Severable in an Annulment Lawsuit?

Before the final and enforceable decision, the administration may make a series of decisions, often referred to as chain decisions. If these chain decisions can be divided into final and enforceable parts, they may be individually subject to an annulment lawsuit. However, if the earlier decisions are preparatory and indivisible in nature, only the final decision can be challenged. The assessment must be made based on the nature of the administrative act.

What Does It Mean for the Administrative Act to Become Moot?

If, after the annulment lawsuit is filed, the administrative act is withdrawn by the issuing authority or a higher authority, the lawsuit becomes moot. On the other hand, if the administrative act is revoked with prospective effect, the existing annulment lawsuit does not become moot.

What Is a Null and Void Administrative Act?

Null administrative acts appear materially as administrative acts but are considered legally nonexistent due to fundamental legal defects. Such decisions can be withdrawn by the administration at any time without time limitation. Individuals, the administration, or third parties are not obligated to comply with such decisions. However, if the administration insists on enforcing a null act, a declaration of nullity must be obtained. Since declaratory lawsuits are not available in administrative jurisdiction, the nullity must be asserted through an annulment lawsuit.

What Does It Mean for the Plaintiff to Have a Legitimate Interest in Annulment Lawsuits?

To be a plaintiff, a person must have the legal capacity to be a party and to initiate a lawsuit, referred to as objective eligibility. However, this alone is not sufficient. In annulment lawsuits, the plaintiff must also have a legitimate interest in filing the lawsuit. Interest is defined as a legitimate, current, and personal concern between the plaintiff and the defendant. A legitimate interest means it is protected or should be protected by law. A current interest means the decision subject to the annulment lawsuit must still be in effect. A lawsuit cannot be filed for an interest that has not yet arisen or is merely potential. Moreover, the interest must be personal, directly or indirectly affecting the plaintiff. This rule also applies to legal entities.

Why Are Time Limits Important in Administrative Jurisdiction?

There are specific time limits for filing lawsuits in administrative jurisdiction. Annulment lawsuits must be filed within these statutory periods. As time limits pertain to public order, judges must consider them ex officio. Except in special cases provided by law, the time limit for filing lawsuits is 60 days in the Council of State and Administrative Courts, and 30 days in Tax Courts.

SUBSTANTIVE CONDITIONS FOR ANNULMENT LAWSUITS (Competence, Form, Reason, Subject, and Purpose)

Once the preliminary conditions are met, the annulment lawsuit is evaluated on its merits. The substantive review involves legal criteria defined as grounds for annulment. According to Article 2 of the Administrative Procedure Law, administrative acts are evaluated in terms of competence, form, reason, subject, and purpose. Any violation of at least one of these elements results in the annulment of the act.

1- UNLAWFULNESS IN TERMS OF COMPETENCE AS A GROUND FOR ANNULMENT

Authority refers to the power and competence used by public officials acting on behalf of the administration by virtue of their positions. Authority can also be described as a unilateral administrative act carried out by the administration through public power. The issue of competence is among the first aspects to be examined, as a defect in this area may render an administrative act null and void. In contrast, defects in form, reason, subject, and purpose typically result in the annulment, not nullity, of an act. Thus, competence is the most critical element in determining the legal validity of administrative power. Violations related to competence cannot be rectified later by approval or authorization and cannot be made legally valid.

Competence in terms of persons: This refers to whether the administrative authority or public official has the authority to make declarations of will and decisions within the scope of the administration’s duties. From the adoption to the declaration of an administrative decision, it must be carried out by the competent person. Otherwise, the decision may be considered a usurpation of authority and thus null and void.

Competence in terms of subject matter: This refers to the administrative body or public official authorized to make a decision on a specific subject. If one administrative body takes action on a subject falling under another body’s jurisdiction, it constitutes incompetence in terms of subject, and the act may be annulled for exceeding authority. This commonly occurs between hierarchical bodies but can also arise between independent authorities. Incompetence in subject matter can be either positive or negative.

Competence in terms of location: This refers to the geographical area within which public officials may exercise their authority. Since the administration’s powers are geographically limited, public officials may only act within the boundaries of their designated regions.

Competence in terms of time: This relates to the time frame in which administrative authorities may exercise their powers, which spans from the commencement to the end of their term. Authority can only be exercised if both appointment and assumption of office have occurred, and the action must be within the designated time period.

Usurpation of function: When an administrative authority takes action on a matter beyond its functional jurisdiction, it is considered a usurpation of function, rendering the act null and void. For example, if a district governor issues a divorce decree, such an act is legally null.

Delegation of authority and signature authority: Delegation of authority involves transferring part of the authority of a higher authority to a subordinate, provided it is legally permitted and formally approved. Delegation occurs between offices, not individuals, so even if the person changes, the authority remains with the office. Signature authority, on the other hand, involves delegating only the signing and documentation authority while retaining decision-making authority.

Principle of parallelism in competence: Unless otherwise stipulated, the authority that performs an administrative act also has the authority to amend, withdraw, or annul it.

2- UNLAWFULNESS IN TERMS OF FORM AND PROCEDURE

For an administrative act to produce legal effects and consequences, certain procedures must be followed. This begins with the administrative authority expressing its intent concerning the administrative act. The manifestation of this intent is called form, while the set of rules ensuring proper implementation of the administrative act is referred to as procedure.

Written form rule: While administrative acts are generally required to be in writing, exceptions exist. The most notable exception is implied acts. These occur when the administration remains silent and inactive in response to an application. Depending on the context, this may constitute implied approval or rejection. For example, under the Zoning Law, if a use permit is not responded to within 30 days, it is deemed approved.

Reasoning requirement: This entails including the material and legal grounds for the decision within the decision text. While not all administrative decisions must be reasoned, in certain laws where justification is required, the absence of such reasoning may be grounds for annulment.

Right to defense: Before taking an administrative action concerning an individual, that person must be given an opportunity to present their defense.

Form and procedure in collective and composite acts: Collective acts are created by the simultaneous and consistent expression of will by multiple parties. In decisions that must be made by a board, failure to follow this procedure constitutes grounds for annulment. Composite acts arise from the sequential and aligned declarations of intent by multiple parties aimed at the same objective.

Principle of procedural parallelism: This principle states that, unless otherwise stipulated by law, the procedures and forms applied when establishing an act must also be followed when withdrawing, amending, or annulling that act.

3- UNLAWFULNESS IN TERMS OF REASON

The reason refers to the motive that leads to the adoption of an administrative act. When evaluating the legality of an act, it must be assessed in conjunction with the reason it is based on. The reason for the administrative act must be genuine. In some cases, the legal grounds for the reason are explicitly regulated in the law. For example, Article 125 of Law No. 657 stipulates that if a civil servant is absent from work for one or two days without a valid excuse, the penalty of deduction from salary shall be applied. In addition, the reason may be indicated in the law through vague concepts such as public order, national security, or public interest.

Substitution of reason: During litigation, changing the erroneous and unlawful reason on which an administrative act is based is referred to as substitution of reason. In this approach, although the reason initially provided is unlawful, if the administration later puts forward a valid reason or if the court identifies a lawful reason ex officio, the administrative act may be deemed lawful.

4- UNLAWFULNESS IN TERMS OF SUBJECT MATTER

Administrative acts are established to produce legal consequences, and every act has a resulting outcome, which constitutes its subject matter. In other words, the subject matter of a legal act is the legal result or change it creates in the legal order. For an administrative act to be recognized by law, the expected legal consequence must be possible and legitimate. If the result of an act is impossible or illegitimate, then the act is unlawful in terms of subject matter. For example, appointing a deceased person as a civil servant would be such a case. Additionally, there must be a causal link between the reason and the outcome of the administrative act. Another principle is that administrative acts should not have retroactive effects. While the general rule is non-retroactivity, there are exceptions, such as judicial decisions, which may have retrospective impacts through annulment rulings.

5- UNLAWFULNESS IN TERMS OF PURPOSE

Administrative acts are intended to fulfill administrative functions, ensure better delivery of public services, and serve the public interest. Thus, the ultimate aim of all administrative acts must be public benefit. Cases of unlawfulness in terms of purpose include acting with personal motives, political intentions, or with the aim of protecting third parties.

CONSEQUENCES OF ANNULMENT ACTIONS

Rejection of annulment action: The case may be rejected due to failure to meet preliminary conditions or on substantive grounds. If preliminary conditions are lacking, the same case may be refiled, unless the rejection was due to a lapse of time, in which case it cannot be refiled. If rejected on the merits, it means the administrative act is deemed lawful and remains in effect.

Acceptance of annulment action: In this case, the administrative act is found unlawful in terms of authority, reason, subject, or purpose, and it is annulled. An administrative act may be annulled entirely or partially. Therefore, different consequences may arise depending on whether the act is individual or regulatory. If an individual act is annulled, the decision only affects the plaintiff. If it is a regulatory act, third parties may also be affected by the annulment.

B- FULL REMEDY ACTIONS

Full remedy actions are lawsuits filed by individuals whose personal rights have been violated by administrative actions, seeking compensation for the damages they have suffered. In such cases, if the plaintiff can prove their claim, the administration is obliged to provide compensation. In contrast, annulment actions only concern the legality of administrative acts and do not deal with issues such as compensation or performance. Given their scope, full remedy actions are considered a type of compensation claim and may also be filed for restitution. This involves the return of assets or rights that have unlawfully passed into the possession of the administration. Additionally, full remedy actions may arise from administrative contracts.

The subject matter of full remedy actions includes administrative acts and administrative contracts. A full remedy action may be filed directly based on an administrative act or in conjunction with an annulment action. Alternatively, a full remedy action may be filed after the result of an annulment action. If the subject of the full remedy action is an administrative action, then the administration must be notified before filing the lawsuit. In this context, the limitation periods are one and five years from the date of learning of the damage. If the claim arises from an administrative contract, the damage must have occurred after the conclusion of the contract.

The time limit for filing full remedy actions is 60 days, as in annulment actions.

Elements of Liability in Full Remedy Actions

1- Service Fault Service fault occurs when the administration fails to perform its duty at all or performs it inadequately due to its own fault. To claim that a service was not provided, it must first be determined whether the administration had an obligation to provide that service. If the administration fails to fulfill a duty it is legally required to perform, it is considered to be at fault. Sometimes, service fault and personal fault may intertwine. The administration cannot be held liable for purely personal faults of public officials. However, if the public official’s actions involve misconduct, malicious intent, or disobedience of judicial decisions, and these intersect with a service fault, then the administration may be held liable through a full remedy action. If the fault is purely personal, a tort action can be brought against the public official in civil court.

2- Strict Liability In some cases, the administration may be held liable for damages regardless of fault. This is known as strict liability, which may arise from risk-based responsibility. Examples include hazardous activities, dangerous methods or situations, where the administration’s fault is not a prerequisite for liability. Moreover, if part of society benefits from a public action while others bear the burden, the principle of balancing the burden applies, and compensation must be provided. This is often seen in public works and housing projects, such as road or bridge construction, where some benefit while others suffer losses.

3- Conditions for Administrative Liability For the administration to be held liable, whether based on fault or strict liability, there must be an administrative act or omission. This conduct must result in material or moral damage. To be subject to litigation, the damage must be quantifiable in monetary terms. When evaluating the case, the causal link between the administrative act and the damage is one of the most critical elements in determining the administration’s liability.

4- Factors Reducing or Eliminating Administrative Liability In some situations, the causal link between the administrative action and the damage may be weakened, thereby reducing or eliminating the administration’s liability. These factors include force majeure, unforeseen circumstances, the conduct of the injured party, or the actions of a third party.

5- Factors Determining Compensation In full remedy actions, the court is bound by the claimant’s request and cannot award more than what is claimed.

Taxation Process and Assessment Stages

The taxation process comprises essential steps that ensure the collection of taxes from taxpayers. The assessment stage includes determining the amount of tax liability and plays a critical role in identifying how much tax is owed. Various methods and procedures in the assessment stage contribute significantly to ensuring a fair and accurate taxation system.

1. Assessment Based on Declaration (Self-assessment)

Self-assessment refers to a system in which the taxpayer submits a tax return to the tax authority, declaring their income, assets, or other taxable elements. Based on this return, the tax liability is determined.

• Tax Return: The taxpayer files an annual return indicating their income or profit. This return serves as the primary document for tax assessment.
• Review by Tax Office: The tax authority examines the declared information. If the declaration is correct and complete, the tax is accrued.
• Taxpayer Responsibility: It is the taxpayer’s obligation to submit an accurate and timely return. Inaccurate declarations may lead to additional taxes and penalties.

2. Supplementary Tax Assessment (Ikmalen Tarh)

Supplementary tax assessment is conducted when the tax authority detects that the taxpayer has under-declared or failed to declare taxable income or assets and completes the missing tax accordingly.

• Incomplete Declarations: If a taxpayer under-declares part of their annual income, the tax office identifies and collects the omitted tax.
• Intervention by Tax Office: The tax authority calculates and recovers the undeclared tax.
• Penalties: The taxpayer may be subjected to penalties due to under-reporting.

3. Ex Officio Tax Assessment (Re’sen Tarh)

Ex officio assessment applies when no tax return is submitted, or the return is found to be insufficient. In such cases, the tax office assesses the tax liability at its discretion.

• No Declaration Submitted: If the taxpayer fails to file a tax return, the authority will assess the liability itself.
• Determination of Tax Base: The tax office evaluates the taxpayer’s income and assets to determine the tax base and accrues the tax accordingly.
• Penalties and Interest: Ex officio assessments typically involve additional fines and interest charges.

4. Administrative Tax Assessment

Administrative tax assessment refers to a determination of tax liability conducted by the state through audits and inspections, apart from regular declarations made by taxpayers.

• Tax Audit: The tax authority examines the taxpayer’s declarations to verify their accuracy.
• Legal Procedure: If any unlawful or irregular practices are identified, legal actions may be initiated.

• Legal Procedures: During the assessment process, compliance with tax laws must be ensured. If the tax office encounters any unlawful situation, legal action may be initiated.

5. Preparatory Procedures for Tax Assessment

To ensure a sound and accurate tax assessment, the tax authority must conduct certain preparatory actions. These procedures are crucial for accurately determining the tax liability.

1. a) On-Site Inspection (Yoklama)
   On-site inspections are a form of examination carried out by the tax authority at the taxpayer’s premises to verify the taxpayer’s tax-related circumstances.

• Field Audit: The tax office may visit the taxpayer’s workplace to inspect the movement of goods and services.
• Purposeful Outcome: The inspection aims to determine whether any tax evasion has occurred. The findings can directly impact the tax assessment.

1. b) Examination (İnceleme)
   This refers to a detailed review conducted by the tax authority over the taxpayer’s declarations, ledgers, and financial records.

• Books and Records: The taxpayer’s books, documents, and financial status are reviewed.
• Detection of Tax Evasion: If tax evasion or misstatements are detected during the examination, the tax liability may be recalculated and penalties imposed.

1. c) Search (Arama)
   A more in-depth inspection that may be conducted at the taxpayer’s business or residence.

• Hidden Information: Confidential documents or undeclared income may be discovered.
• Legal Procedures: Searches are usually conducted under suspicion of serious tax offenses and may reveal comprehensive financial data, including assets and income.

1. d) Information Gathering (Bilgi Toplama)
   The process of collecting data from various sources regarding the taxpayer.

• Other Institutions and Banks: The tax authority may request information from public institutions, financial organizations, or third parties.
• Declarations and Supporting Documents: The taxpayer may be asked to provide additional documentation to verify the accuracy of their tax return.

6. Notification (Tebliğ) Notification refers to the official communication of the assessed tax liability to the taxpayer. Once the tax assessment is formally delivered, the obligation to pay arises.

• Official Correspondence: The tax office sends a written notification to the taxpayer.
• Notification Period: The taxpayer becomes legally responsible for payment after receiving the notice within the specified timeframe.

TIME LIMITS IN TAX LAW

In tax law, time limits represent a critical element that defines both the authority of the tax administration to act and the rights and obligations of taxpayers. These timeframes govern not only the accrual of tax liabilities but also their collection. Furthermore, the application of penalties and statute of limitations processes are directly tied to these periods.

1. Statute of Limitations for Assessment (Tarh Zamanaşımı)
   The statute of limitations for assessment refers to the time period within which the tax administration has the authority to determine (assess) a tax liability. It means that a tax must be assessed within a certain period after it becomes due.
2. a) Start Date and Duration
   The statute of limitations for assessment begins on the first day of the calendar year following the year in which the taxable event occurred. This period is defined as five years.

• Example: If a taxable event (e.g., income earned) occurred in 2020, the statute of limitations begins on January 1, 2021, and expires at the end of 2025.

1. b) Events that Suspend the Statute of Limitations
   Certain legal situations can suspend the statute of limitations period.

• Force Majeure: If the tax office cannot operate due to natural disasters or similar force majeure events affecting the taxpayer’s location, the limitation period is suspended.
• Valuation Commission: If the taxpayer or tax administration applies for a valuation commission to determine the tax base, this also suspends the limitation period.

1. c) Events that Interrupt the Statute of Limitations
   Some events completely reset the statute of limitations, starting the period anew.

• Notice of Tax Loss Penalty: If a tax loss penalty is issued to the taxpayer, this interrupts the statute of limitations. Once the penalty notice is served to the taxpayer, the limitation period restarts.
• Tax Audit: If the tax office initiates an audit on the taxpayer, this action interrupts the period and starts a new one.

1. d) Special Circumstances
   In certain special situations, the statute of limitations may be extended or recalculated.

• Liability of Public Officials: If a public official deliberately or knowingly causes tax evasion against the taxpayer, such fraudulent actions may impact the statute of limitations.

• Liability of Public Officials: If a public official intentionally or knowingly causes tax evasion to the detriment of the taxpayer, such fraudulent conduct may affect the statute of limitations for assessment.

 

2. Statute of Limitations for Collection

The statute of limitations for collection refers to the time period during which a tax liability can be legally collected. After this period, the tax authority loses the right to enforce collection.

1. a) Start Date and Duration
   The statute of limitations for collection begins after the expiration of the assessment period. That is, once the tax is assessed, the tax office has five years to collect the debt.

• Example: If a tax debt is assessed in 2020, the statute of limitations for collection ends at the close of 2025.

1. b) Events that Suspend the Collection Period
   Certain situations can suspend the collection period when enforcement is not possible.

• Seizure Proceedings: If the tax office initiates a seizure process against the taxpayer, the collection period is suspended. After the seizure ends, the limitation period resumes.
• Payment Plan: If the taxpayer enters into a structured payment agreement, the collection period is also suspended.

1. c) Events that Interrupt the Collection Period
   Some events reset the limitation period, starting it anew.

• Payment: If the taxpayer makes any payment toward the tax debt, it interrupts the collection limitation period.
• Seizure and Bankruptcy Proceedings: The initiation of a seizure or filing for bankruptcy interrupts and restarts the collection period.

 

3. Statute of Limitations for Tax Penalties

Tax penalties are imposed when taxpayers violate tax regulations. The statute of limitations for penalties varies based on the type of penalty.

1. a) Tax Loss Penalty (Vergi Ziyaı Cezası)
   This penalty is imposed for tax evasion. The limitation period for this penalty parallels the assessment limitation.

• Duration: Five years, starting from the beginning of the year following the end of the assessment period.

1. b) Procedural Penalty (Usulsüzlük Cezası)
   These penalties apply to failures such as late or incomplete filing of tax returns.

• Duration: Two years, starting from the beginning of the year following the procedural violation.

1. c) Special Procedural Penalty
   Special procedural penalties are imposed in cases where tax returns are not filed or payment obligations are not fulfilled.

• Duration: The statute of limitations for these penalties is also 2 years and may be applied repeatedly for each year.

1. d) Limitation Period and Interruption for Penalties
   The limitation period for tax penalties begins upon notification. Penalties must be enforced within 2 or 5 years from the date of notification, depending on the nature of the penalty and relevant legal provisions.

 

4. Corrections and Limitation Periods

Taxpayers have the right to correct erroneous tax declarations. According to the Tax Procedure Law, corrections made within the limitation period may result in a recalculation of the tax liability.

1. a) Right to Correction
   If a taxpayer has made a mistake in a tax return, they may file a correction request within the limitation period. Requests submitted after the limitation period will not be accepted.

• Timeframe: Corrections must generally be made before the end of both the assessment and collection periods.

1. b) Expired Corrections
   Correction requests submitted after the expiration of the limitation period will be rejected by the tax administration, and the taxpayer will remain liable for the original tax obligation.

 

Other Causes for Termination of Tax Liabilities

1. Statute of Limitations (Zamanaşımı)
   In tax law, the statute of limitations refers to the state’s loss of the right to collect tax if it is not enforced within a specific period. The limitation period for collection is typically 5 years but may extend to 10 years under certain circumstances. For instance, if enforcement measures like seizure have been initiated, or if the taxpayer has fled abroad, different rules may apply.
   Once the limitation period ends, the tax debt is legally terminated, although disputes often arise in practice.
2. Write-Off (Terkin)
   Write-off refers to the partial or total cancellation of tax debts by the administration. Write-offs may be applied in the following cases:

• Incorrect or duplicate tax assessments,
• Taxpayer’s inability to pay,

• Force Majeure Events: Natural disasters and similar uncontrollable circumstances.
• Implementation of Court Decisions: If a court decision requires the cancellation of a tax debt, it must be enforced.
  For example, the cancellation of tax debts for taxpayers in earthquake-affected areas is a commonly applied measure.

 

3. Cancellation by Court Decision
   A taxpayer may file a lawsuit in tax court against an unjust tax assessment.
   If the court determines that the tax was unlawful, the assessment is nullified, and the tax debt is terminated. Such decisions are binding on the administration and must be executed.
4. Settlement (Uzlaşma)
   According to the Tax Procedure Law, taxpayers and the tax administration may resolve disputes through settlement. If a settlement is reached, the parties agree on a specified amount, and the remaining debt is canceled.The resulting settlement report becomes final, and no further legal action can be taken regarding the matter.

 

5. Inability to Collect (Insolvency)
   In some cases, forced collection of tax debt is not feasible.
   For instance, if the debtor has no assets or a known address, the tax office may issue a certificate of insolvency (“aciz vesikası”).
   In such cases, the debt is not legally terminated but is considered effectively uncollectible. If the debtor later acquires means, collection may resume.

 

6. Amnesty Laws and Restructuring Programs
   Due to social and economic conditions, the state may enact tax amnesty or restructuring laws.
   Such regulations may include full or partial cancellation of tax debts, installment payment plans, or removal of penalties and interest.

 

7. Death of the Taxpayer
   In the event of the death of an individual taxpayer, the tax debt does not automatically terminate but is transferred to the heirs.
   If the heirs renounce the inheritance, the debt is also terminated.
   In cases where the inheritance is accepted, the tax debt must be paid by the heirs in proportion to their share of the estate. This situation blends tax law with inheritance law.

 

8. Liquidation and Dissolution of Legal Entities
   When legal entities such as companies or associations are dissolved, any outstanding debts are evaluated during the liquidation process.If collection is not possible during this phase, the debts become practically uncollectible.
   In certain cases, directors or shareholders may be held personally liable for these debts.

 

9. The Role of the Explanation Invitation (İzaha Davet)
   The explanation invitation process may prevent a tax debt from arising altogether.

• If the taxpayer’s explanation is found satisfactory, there is no tax loss.
• Consequently, no tax is assessed and no debt is created.
• No penalties are imposed, and no dispute arises with the tax authority.
  This makes the explanation invitation an effective administrative tool to resolve issues before a tax debt materializes—particularly in cases involving technical discrepancies in documents or records, often benefiting the taxpayer.