Month: November 2019

According to the Turkish Commercial Code, it is mandatory that each establishment has a center. The headquarters of the business enterprise refers to the place where the business’s administrative, legal and commercial activities are collected and carried out. This location may be different from where the technical activities of the entity are carried out.

As the scope of their activities increases, commercial enterprises operating in Turkey and abroad prefer to manage their business through the semi-independent units they will establish, ie branches, instead of managing them centrally. Branches are as follows;

• Branch and headquarters must belong to the same real or legal person.

• Field of activity similarity: The field of activity of the branch and headquarters should be similar or the same.

• Headquarters and branches should be in separate places. As a rule, the branch should operate in a separate place from the center. However, the distance limit does not matter. For example, while the upper floor of a building is the headquarters of the company, the lower floor can also function as a branch.

• The branch has to use the trade name of the center by adding a branch attachment.

• Branches must be registered and announced in the trade registry of their location.

• Branches must register to the chamber of commerce and industry of their location separately from the center and pay dues.

• Branches are connected to the center. The profit, loss, rights and debts provided by the Branch are deemed to belong to the center. The branch does not have any assets apart from the center, only a certain asset is allocated to the branch by the center. Therefore, branches cannot be considered as an independent commercial enterprise.

In accordance with the loyalty relationship, the branches may operate only in matters that fall within the field of activity of the center based on the authority they have received from the center.

Branches are also attached to the center in terms of operational policy. The business policy is the personnel, price, management, etc. that an enterprise follows during the activity. refers to policies. In accordance with the loyalty relationship, the branches must comply with this operating policy determined by the center.

The organization of the branches is subject to the center. For example, the recruitment or promotion of the branch personnel is done from the center. However, if the branch has been authorized by the center in this regard, it will be able to use this authority.

• Separation of management: Since it is authorized to conduct branch transactions alone, it must have a separate accounting from the headquarters. Therefore, it is necessary to keep the commercial books separate from the center. However, it is considered possible that the records related to the branch can be passed by the center provided that a separate book is kept.

• Branches are independent in external relations: The Branch is authorized to carry out all transactions that the head office is authorized to perform with third parties. The independence of the branch in external relations is limited by the authority given to it by the center. If the branch exceeds the authority limit given by the center, the center shall be responsible to third parties against the transactions performed by the branch.

In the light of these features, it is seen that the branch has absolute independence in the external relationship, whereas in the internal relationship it is seen that there is a complete commitment to the center.

a duly authorized attorney in the first place of residence in Turkey to open a branch in Turkey foreign companies are required to appoint. After this proxy is appointed, all necessary documents and the Ministry of Industry and Trade, General Directorate of Internal Trade should be applied.

documents to be submitted to the Ministry of Industry and Trade of the foreign companies to open branches in Turkey include:

1. Petition written by the company or its representative. This petition; company name, company history, company nationality, capital of the company, the name of a duly authorized proxy surname in Turkey, attorney’s commitment to comply with the laws and legislation in the transactions to be made within the borders of Turkey, branch address, branch of activity and branch capital information is required the presence of.

2. Original and translation of the decision to open branches of the authorized bodies of the company (establishment notification form)

3. Original and translation of the Articles of Association

4. Establishment documents showing where, when and under which state laws the company was established and the activity certificate of the company that is still operating. These documents are required to be translated as well as the originals.

5. Translation of the original power of attorney and proxy of Turkey. This power of attorney should include the following issues in addition to the issues needed;

– Performing the transactions indicated in the articles of association and representing the company,

– To represent the company in all courts as plaintiff, defendant and third party in cases arising from transactions on behalf of the Company,

To appoint an attorney instead of the powers which it has in the case of temporary separation for in Turkey

OlmaTo be authorized to assign proxy to the secondary branches to be established under the central branch.

Translations of documents required to be translated in the list shall be certified in one of the following ways;

– By the Turkish consulate in the country to which the Company is subject,

– Turkey by the Ministry of Foreign Affairs

– According to the provisions of the “Convention on the Elimination of the Obligation of Approval of Foreign Official Documents çevresinde prepared around the Hague Conference on Private Law.

After obtaining the permission to open a branch from the Ministry of Industry and Trade, it is necessary to apply to the Trade Registry Office with the following documents and to register the branch:

1. Permission of the Ministry of Industry and Trade,

2. The petition signed by the company official,

3. Notarized power of attorney,

4. Auction declaration and announcement approved by the Ministry of Industry and Trade,

5. Trade room registration form,

6. Signature circular of the branch representative,

7. Commitment in accordance with Article 29 of the Company’s registration regulation,

8. If the representative of the branch is Turkish, a notarized identification card and if a foreigner, a notarized passport copy.

 

Direct and Indirect Taxes in Turkey
Turkey, with the aim of public services to meet the people of the state and the institutions, which have collected way we mean by law as the definition of tax money. In the Turkish Tax System, taxes are classified under two main headings as indirect taxes and direct taxes. Basically, taxes on income and wealth are called direct taxes, and taxes on expenditures are called indirect taxes.

   
Income tax
Revenues and income are as follows:

1. Commercial earnings
2. Agricultural earnings
3. Fees
4. Profession earnings
5. Real estate capital income
6. Securities income
7. Other earnings and revenues

   
Full Liability
Below listed natural persons in Turkey and are taxed on all income and gains they have achieved the outside:

1. Those settled in Turkey
2. (202 of Law No. I varying with Article 1) is connected to official departments and institutions or headquarters entities and enterprises in Turkey said circle, institutions, entities and enterprises of the residents in foreign countries with their work on due to Turkish citizens (of these, such as in the country they are located Those who have been subject to Income Tax or similar tax due to their earnings and revenues are not taxed separately on the mentioned earnings and revenues.)

Below listed are considered one settled in Turkey:

1. Residential, located in Turkey (Residential, which are written in place of the 19th and subsequent articles of the Civil Code)
2. (Law No. 202 paragraph by changing Article 2) more than six months in Turkey is constantly sitting in a calendar year (Temporary separations does not interrupt the residence time in Turkey.)

even if they’re in the country more than six months following written foreigners, settled in Turkey not include:

1. Certain tasks and temporary work or coming to Turkey for work, scholars and scientists, experts, officials, media and press correspondents and situations from the other person charged with or similar to their treatment or rest or travel purposes
2. Arrest, detention in Turkey has not achieved for reasons such as illness or conviction or those who have stayed

   
Corporation tax
Subject of Tax:

The earnings of the following institutions are subject to corporate tax:

a) Capital companies
b) Cooperatives
c) Economic public institutions
ç) Economic enterprises belonging to associations or foundations
d) Business partnerships
The income of the corporation consists of the income elements that are subject to income tax.

   
liability
Capital companies:

Established in accordance with the provisions of the Turkish Commercial Code no. In the implementation of this Law, funds subject to the regulation and supervision of the Capital Markets Board and foreign funds similar to these funds shall be considered as capital companies.

Cooperatives:

Refers to cooperatives established in accordance with the Law on Cooperatives dated 11/24/1969 and numbered 1163 or special laws and foreign cooperatives of similar quality.

Public economic institutions:

Commercial, industrial and agricultural enterprises, which are owned or affiliated to the state, special provincial administrations, municipalities, other public administrations and institutions and whose activities are continuous and other than the first and second paragraphs, are economic public institutions.
Commercial, industrial and agricultural enterprises, which are owned or affiliated to foreign states, foreign public administrations and organizations and which fall outside the first and second paragraphs of this article, are considered as economic public institutions.

Economic enterprises of associations or foundations:

Commercial, industrial and agricultural enterprises belonging to or affiliated with associations or foundations, whose activities are continuous and other than the first and second paragraphs of this article, and similar foreign enterprises are the economic enterprises of associations or foundations. In the implementation of this Law, trade unions; congregations are considered foundations. The fact that the economic enterprises belonging to economic public institutions and associations or foundations are not aimed for earnings, their activities are among the duties assigned by law, the absence of legal entities, the absence of independent accounts and their own capital or workplaces shall not affect their obligations. The fact that the cost of goods or services is only sufficient to cover the cost, not making a profit or allocating the profit for the purposes of establishment does not change their economic quality.

Business partnerships:

It is the business partnerships that the corporations written in the above paragraphs, among themselves or with individual persons or with real persons, demand that such partnerships be established in order to undertake the joint work of a certain business jointly and to share their earnings. Their lack of legal personality does not affect their obligations.

Full and Narrow Liability
Full liability:

Law of the few institutions in the legal or business center located in Turkey Article 1, both are taxed on all income derived outside of Turkey and Turkey.

Narrow liability:

both the legal and business centers of the few institutions in Article 1 of the Law are not in Turkey, they are taxed only on the income that you obtained in Turkey. In narrow liability, corporate income consists of the following earnings and revenues:

a) 04/01/1961 213 dated Tax Law according to which work in Turkey or permanent representative possession of these places by foreign institutions or commercial profits derived from the work done by these representatives (These conditions cause any are to be exported, even institutions they take goods purchased in Turkey, earnings arising from referring to without selling the foreign countries in Turkey, does not count obtained in Turkey. in order to sell in Turkey, the buyer or seller or both, or if the contract of sale in Turkey are made in Turkey.)
b) gains derived from agricultural businesses in Turkey
c) the self-employment income obtained in Turkey
d) The rights to movable and immovable are foreclosed obtained letting in Turkey
d) The capital gains obtained in Turkey
e) Other income and revenues obtained in Turkey

Obtaining in Turkey of this article shall be dealt with as income or gain possession of the subject and permanent representative in Turkey, No. 193, dated 31/12/1960 and the relevant provisions of the Income Tax Act applies.

Legal center:

It is the center shown in the presidential decrees, statutes, main statutes or conventions in the establishment laws of taxable institutions (Article added to article 173 of Decree Law No. 700; Effective: 09.07.2018).

Business center:

It is the center where transactions are de facto collected and managed in terms of business.

When establishing a company with foreign partners, you must apply for a work permit for foreign partners and foreign managers of the company. The company must meet the following conditions in order to obtain a work permit.

According to the new law, joint stock companies and limited liability companies not domiciled in Turkey and their foreign partners eliminates the requirement of a work permit if there is no authority in these companies.

Foreigners may establish a company in Turkey, or over 100% shareholder can or not less than 40% (for a work permit), can any company’s partner.

The Company’s paid-in capital must be at least 100,000 TL or its gross sales amount should be at least 800,000 TL or the export amount of the last year must be at least 250,000 USD.

At least 5 (five) Turkish nationals must be employed for each foreign partner in the company requesting work permit. For foreign company partners requesting a work permit, it is required that there will be five Turkish employees in the last six months of the 1st year of the work permit. If more than one foreigner is required to work in the same company, 5 (five) Turkish Citizens must be employed for each foreigner after the first foreign employee who has obtained the work permit.

Work permits are not required for foreign partners during the establishment of the company and can be applied later.