Tax Treaty Case Law around the Globe 2018
1. Aufl. 2019
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S. 147Chapter 15 Turkey: Taxation of CFC Earnings Before and After the Distribution of Dividends
Cihat Öner
15.1. Introduction
Tax avoidance does not exist as a concept in Turkish tax legislation, thus there is no legal definition of the term in tax legislation. There are other concepts, however, that allow reference to tax avoidance, such as tax veiling, the precedence of substance over form, abuse of rights, escaping from tax and tax circumvention.
The prevention of tax avoidance is addressed through domestic tax law. Article 3(b) of the Tax Procedural Law (TPL) regulates the general anti-abuse provision via the rules on the burden of proof. Accordingly, the real substance of the taxable event and the transactions related to this event are what prevail. If the situation of a case that comes to court is unusual or out of the ordinary and does not follow prevailing economic, technical and commercial requirements, the burden of proof rests on the taxpayer.
S. 148However, no general anti-avoidance rule (GAAR) exists in the context of Turkey’s tax treaty network. The treaty-related measures addressing tax avoidance are of two types. First, the concept of beneficial ownership is included in all treatie...