{"id":5461,"date":"2024-10-23T19:26:30","date_gmt":"2024-10-23T19:26:30","guid":{"rendered":"https:\/\/www.cbhukuk.com\/?p=5461"},"modified":"2026-03-16T22:02:15","modified_gmt":"2026-03-16T22:02:15","slug":"tax-liability-responsibility-in-companies-in-turkey","status":"publish","type":"post","link":"https:\/\/www.cbhukuk.com\/en\/tax-liability-responsibility-in-companies-in-turkey\/","title":{"rendered":"Tax Liability in Companies in Turkey"},"content":{"rendered":"<section class=\"l-section wpb_row height_small\"><div class=\"l-section-h i-cf\"><div class=\"g-cols vc_row via_grid cols_1 laptops-cols_inherit tablets-cols_inherit mobiles-cols_1 valign_top type_default stacking_default\"><div class=\"wpb_column vc_column_container\"><div class=\"vc_column-inner\"><div class=\"w-image align_center\"><div class=\"w-image-h\"><img decoding=\"async\" width=\"800\" height=\"400\" src=\"https:\/\/www.cbhukuk.com\/wp-content\/uploads\/2024\/10\/tax-liability-in-comapnies-800x400.jpg\" class=\"attachment-us_800_400 size-us_800_400\" alt=\"tax liability responsibility in companies in Turkey\" srcset=\"https:\/\/www.cbhukuk.com\/wp-content\/uploads\/2024\/10\/tax-liability-in-comapnies-800x400.jpg 800w, https:\/\/www.cbhukuk.com\/wp-content\/uploads\/2024\/10\/tax-liability-in-comapnies-300x150.jpg 300w, https:\/\/www.cbhukuk.com\/wp-content\/uploads\/2024\/10\/tax-liability-in-comapnies-1024x512.jpg 1024w, https:\/\/www.cbhukuk.com\/wp-content\/uploads\/2024\/10\/tax-liability-in-comapnies-100x50.jpg 100w, https:\/\/www.cbhukuk.com\/wp-content\/uploads\/2024\/10\/tax-liability-in-comapnies-90x45.jpg 90w, https:\/\/www.cbhukuk.com\/wp-content\/uploads\/2024\/10\/tax-liability-in-comapnies-120x60.jpg 120w, https:\/\/www.cbhukuk.com\/wp-content\/uploads\/2024\/10\/tax-liability-in-comapnies-e1757069272959.jpg 1000w\" sizes=\"(max-width: 800px) 100vw, 800px\" \/><\/div><\/div><\/div><\/div><\/div><\/div><\/section><section class=\"l-section wpb_row height_auto\"><div class=\"l-section-h i-cf\"><div class=\"g-cols vc_row via_grid cols_1 laptops-cols_inherit tablets-cols_inherit mobiles-cols_1 valign_top type_default stacking_default\"><div class=\"wpb_column vc_column_container\"><div class=\"vc_column-inner\"><div class=\"wpb_text_column us_custom_275474cc has_text_color\"><div class=\"wpb_wrapper\"><div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Index<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.cbhukuk.com\/en\/tax-liability-responsibility-in-companies-in-turkey\/#TAX_RESPONSIBILITIES_OF_COMPANIES_IN_TURKEY\">TAX RESPONSIBILITIES OF COMPANIES IN TURKEY<\/a><ul class='ez-toc-list-level-2' ><li class='ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.cbhukuk.com\/en\/tax-liability-responsibility-in-companies-in-turkey\/#Who_is_a_Taxpayer_in_Turkey\">Who is a Taxpayer in Turkey?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.cbhukuk.com\/en\/tax-liability-responsibility-in-companies-in-turkey\/#Who_is_a_Tax_Responsible_Person_in_Turkey\">Who is a Tax Responsible Person in Turkey?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.cbhukuk.com\/en\/tax-liability-responsibility-in-companies-in-turkey\/#What_is_the_Scope_of_Tax_Responsibility_in_Turkey\">What is the Scope of Tax Responsibility in Turkey?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.cbhukuk.com\/en\/tax-liability-responsibility-in-companies-in-turkey\/#TAX_LIABILITY_OF_LEGAL_REPRESENTATIVES_OF_COMPANIES_IN_TURKEY\">TAX LIABILITY OF LEGAL REPRESENTATIVES OF COMPANIES IN TURKEY<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.cbhukuk.com\/en\/tax-liability-responsibility-in-companies-in-turkey\/#Tax_Liability_of_Joint_Stock_Companies_in_Turkey\">Tax Liability of Joint Stock Companies in Turkey<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.cbhukuk.com\/en\/tax-liability-responsibility-in-companies-in-turkey\/#a_Personal_Liability_of_Legal_Representatives_for_Tax_Debts_in_Joint_Stock_Companies_in_Turkey\">a) Personal Liability of Legal Representatives for Tax Debts in Joint Stock Companies in Turkey<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/www.cbhukuk.com\/en\/tax-liability-responsibility-in-companies-in-turkey\/#b_Liability_for_Social_Security_Debts_in_Joint_Stock_Companies\">b) Liability for Social Security Debts in Joint Stock Companies<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/www.cbhukuk.com\/en\/tax-liability-responsibility-in-companies-in-turkey\/#c_Joint_and_Several_Liability_for_Public_Receivables_in_Joint_Stock_Companies_in_Turkey\">c) Joint and Several Liability for Public Receivables in Joint Stock Companies in Turkey<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/www.cbhukuk.com\/en\/tax-liability-responsibility-in-companies-in-turkey\/#d_Liability_for_Tax_Debts_in_Liquidated_Joint_Stock_Companies_in_Turkey\">d) Liability for Tax Debts in Liquidated Joint Stock Companies in Turkey<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/www.cbhukuk.com\/en\/tax-liability-responsibility-in-companies-in-turkey\/#e_Liability_of_Board_Members_for_Tax_Debts_in_Joint_Stock_Companies_in_Turkey\">e) Liability of Board Members for Tax Debts in Joint Stock Companies in Turkey<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/www.cbhukuk.com\/en\/tax-liability-responsibility-in-companies-in-turkey\/#f_Liability_of_Shareholders_for_Tax_Debts_in_Joint_Stock_Companies_in_Turkey\">f) Liability of Shareholders for Tax Debts in Joint Stock Companies in Turkey<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/www.cbhukuk.com\/en\/tax-liability-responsibility-in-companies-in-turkey\/#g_Liability_of_Senior_Executives_and_Managers_for_Tax_Debts_in_Joint_Stock_Companies_in_Turkey\">g) Liability of Senior Executives and Managers for Tax Debts in Joint Stock Companies in Turkey<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/www.cbhukuk.com\/en\/tax-liability-responsibility-in-companies-in-turkey\/#Tax_Liability_in_Limited_Liability_Companies_LLCs_in_Turkey\">Tax Liability in Limited Liability Companies (LLCs) in Turkey<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/www.cbhukuk.com\/en\/tax-liability-responsibility-in-companies-in-turkey\/#a_From_Whom_and_How_Can_Tax_Debts_Be_Collected_in_Limited_Liability_Companies_in_Turkey\">a) From Whom and How Can Tax Debts Be Collected in Limited Liability Companies in Turkey?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/www.cbhukuk.com\/en\/tax-liability-responsibility-in-companies-in-turkey\/#b_Liability_of_Managers_and_Senior_Executives_for_Tax_Debts_in_Limited_Liability_Companies_LLCs_in_Turkey\">b) Liability of Managers and Senior Executives for Tax Debts in Limited Liability Companies (LLCs) in Turkey<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-17\" href=\"https:\/\/www.cbhukuk.com\/en\/tax-liability-responsibility-in-companies-in-turkey\/#c_Liability_of_Shareholders_for_Tax_Debts_in_Limited_Liability_Companies_in_Turkey\">c) Liability of Shareholders for Tax Debts in Limited Liability Companies in Turkey<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-18\" href=\"https:\/\/www.cbhukuk.com\/en\/tax-liability-responsibility-in-companies-in-turkey\/#d_Objective_and_Potentially_Unlimited_Liability_in_LLCs_for_Tax_Debts\">d) Objective and Potentially Unlimited Liability in LLCs for Tax Debts<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-19\" href=\"https:\/\/www.cbhukuk.com\/en\/tax-liability-responsibility-in-companies-in-turkey\/#e_Liability_of_Legal_Representatives_After_Term_of_Office_in_Limited_Liability_Companies_in_Turkey\">e) Liability of Legal Representatives After Term of Office in Limited Liability Companies in Turkey<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-20\" href=\"https:\/\/www.cbhukuk.com\/en\/tax-liability-responsibility-in-companies-in-turkey\/#f_Priority_in_Collection_of_Public_Debts_in_Turkey\">f) Priority in Collection of Public Debts in Turkey<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-21\" href=\"https:\/\/www.cbhukuk.com\/en\/tax-liability-responsibility-in-companies-in-turkey\/#g_Effect_of_Share_Transfer_on_Tax_Liability_in_Limited_Liability_Companies_LLCs_in_Turkey\">g) Effect of Share Transfer on Tax Liability in Limited Liability Companies (LLCs) in Turkey<\/a><ul class='ez-toc-list-level-5' ><li class='ez-toc-heading-level-5'><a class=\"ez-toc-link ez-toc-heading-22\" href=\"https:\/\/www.cbhukuk.com\/en\/tax-liability-responsibility-in-companies-in-turkey\/#1_Liability_for_Pre-Transfer_Tax_Debts_in_Turkey\">1) Liability for Pre-Transfer Tax Debts in Turkey<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-5'><a class=\"ez-toc-link ez-toc-heading-23\" href=\"https:\/\/www.cbhukuk.com\/en\/tax-liability-responsibility-in-companies-in-turkey\/#2_Liability_of_the_Company_Manager_for_Tax_Debts_in_Turkey\">2) Liability of the Company Manager for Tax Debts in Turkey<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-5'><a class=\"ez-toc-link ez-toc-heading-24\" href=\"https:\/\/www.cbhukuk.com\/en\/tax-liability-responsibility-in-companies-in-turkey\/#3_Liability_for_Post-Transfer_Tax_Debts_in_Turkey\">3) Liability for Post-Transfer Tax Debts in Turkey<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-25\" href=\"https:\/\/www.cbhukuk.com\/en\/tax-liability-responsibility-in-companies-in-turkey\/#DIFFERENCES_IN_LIABILITY_FOR_PUBLIC_DEBTS_IN_JOINT-STOCK_COMPANIES_AND_LIMITED_COMPANIES\">DIFFERENCES IN LIABILITY FOR PUBLIC DEBTS IN JOINT-STOCK COMPANIES AND LIMITED COMPANIES<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-26\" href=\"https:\/\/www.cbhukuk.com\/en\/tax-liability-responsibility-in-companies-in-turkey\/#WHAT_HAPPENS_IF_CORPORATE_TAX_DEBT_IS_NOT_PAID_IN_TURKEY\">WHAT HAPPENS IF CORPORATE TAX DEBT IS NOT PAID IN TURKEY?<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-27\" href=\"https:\/\/www.cbhukuk.com\/en\/tax-liability-responsibility-in-companies-in-turkey\/#1_Collection_from_the_Companys_Assets\">1. Collection from the Company\u2019s Assets<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-28\" href=\"https:\/\/www.cbhukuk.com\/en\/tax-liability-responsibility-in-companies-in-turkey\/#2_Liability_of_Legal_Representatives_Managers_and_Shareholders\">2. Liability of Legal Representatives, Managers, and Shareholders<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-29\" href=\"https:\/\/www.cbhukuk.com\/en\/tax-liability-responsibility-in-companies-in-turkey\/#3_Late_Payment_Penalties_and_Administrative_Sanctions\">3. Late Payment Penalties and Administrative Sanctions<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-30\" href=\"https:\/\/www.cbhukuk.com\/en\/tax-liability-responsibility-in-companies-in-turkey\/#4_Legal_Proceedings_and_Enforcement\">4. Legal Proceedings and Enforcement<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-31\" href=\"https:\/\/www.cbhukuk.com\/en\/tax-liability-responsibility-in-companies-in-turkey\/#5_Tax_Loss_Penalty\">5. Tax Loss Penalty<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-32\" href=\"https:\/\/www.cbhukuk.com\/en\/tax-liability-responsibility-in-companies-in-turkey\/#6_Criminal_Proceedings\">6. Criminal Proceedings<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-33\" href=\"https:\/\/www.cbhukuk.com\/en\/tax-liability-responsibility-in-companies-in-turkey\/#DO_LEGAL_REPRESENTATIVES_HAVE_THE_RIGHT_TO_OBJECT_TO_TAX_LIABILITY_IN_TURKEY\">DO LEGAL REPRESENTATIVES HAVE THE RIGHT TO OBJECT TO TAX LIABILITY IN TURKEY?<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-34\" href=\"https:\/\/www.cbhukuk.com\/en\/tax-liability-responsibility-in-companies-in-turkey\/#1_Legal_Basis_for_Objection\">1. Legal Basis for Objection<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-35\" href=\"https:\/\/www.cbhukuk.com\/en\/tax-liability-responsibility-in-companies-in-turkey\/#2_Examination_of_Legal_Representative_Status\">2. Examination of Legal Representative Status<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-36\" href=\"https:\/\/www.cbhukuk.com\/en\/tax-liability-responsibility-in-companies-in-turkey\/#3_Consequences_of_Objecting_to_Tax_Liability\">3. Consequences of Objecting to Tax Liability<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n\n<h1><span class=\"ez-toc-section\" id=\"TAX_RESPONSIBILITIES_OF_COMPANIES_IN_TURKEY\"><\/span>TAX RESPONSIBILITIES OF COMPANIES IN TURKEY<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<p data-start=\"100\" data-end=\"727\">Before addressing <strong data-start=\"118\" data-end=\"158\">tax liability in companies in Turkey<\/strong>, it is necessary to correctly explain the <strong data-start=\"201\" data-end=\"239\">legal nature of the concept of tax<\/strong>. Tax is a monetary obligation that the <strong data-start=\"283\" data-end=\"322\">state, based on its sovereign power<\/strong>, imposes on individuals and legal entities without consideration, for the <strong data-start=\"397\" data-end=\"453\">financing of public services and public expenditures<\/strong>. This obligation is defined as a <strong data-start=\"487\" data-end=\"518\">bilateral debt relationship<\/strong> established between the <strong data-start=\"543\" data-end=\"573\">state (tax administration)<\/strong> and the <strong data-start=\"582\" data-end=\"594\">taxpayer<\/strong>, subject to <strong>the principles of public law<\/strong>. In this relationship, the <strong data-start=\"663\" data-end=\"688\">creditor is the state<\/strong>, and the <strong data-start=\"698\" data-end=\"724\">debtor is the taxpayer<\/strong>.<\/p>\n<p data-start=\"729\" data-end=\"1129\">In Turkey, with regard to <strong data-start=\"755\" data-end=\"780\">tax debt in companies<\/strong>, the <strong data-start=\"786\" data-end=\"798\">taxpayer<\/strong> is, as a rule, the <a href=\"https:\/\/www.cbhukuk.com\/en\/corporate-law-in-turkey\/\"><strong data-start=\"818\" data-end=\"834\">legal entity<\/strong><\/a> itself. However, in certain cases stipulated under <strong data-start=\"886\" data-end=\"905\">tax legislation<\/strong>, <strong data-start=\"907\" data-end=\"946\">company executives or third parties<\/strong> may also bear liability in the fulfillment of this debt. Therefore, <strong data-start=\"1015\" data-end=\"1103\">distinguishing between the concepts of taxpayer and tax responsible person in Turkey<\/strong> is of great importance.<\/p>\n<ul>\n<li data-start=\"1131\" data-end=\"1165\">\n<h2><span class=\"ez-toc-section\" id=\"Who_is_a_Taxpayer_in_Turkey\"><\/span>Who is a Taxpayer in Turkey?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<\/li>\n<\/ul>\n<p data-start=\"1166\" data-end=\"1416\">According to the <strong data-start=\"1183\" data-end=\"1212\">Turkish Tax Procedure Law<\/strong>, a <strong data-start=\"1216\" data-end=\"1228\">taxpayer<\/strong> is a <strong data-start=\"1234\" data-end=\"1261\">natural or legal person<\/strong> who is burdened with a tax debt in accordance with tax laws. For a person to <strong>be considered a taxpayer in Turkey<\/strong>, two fundamental conditions must be met:<\/p>\n<ol>\n<li data-start=\"1421\" data-end=\"1514\">The person must be <strong data-start=\"1440\" data-end=\"1479\">designated as liable to pay the tax<\/strong> under the relevant tax laws, and<\/li>\n<li data-start=\"1518\" data-end=\"1621\">The <strong data-start=\"1522\" data-end=\"1539\">taxable event<\/strong> must have occurred in connection with the person\u2019s activities or circumstances.<\/li>\n<\/ol>\n<p data-start=\"1623\" data-end=\"1766\">Accordingly, in companies, the <strong data-start=\"1654\" data-end=\"1693\">taxpayer is the legal entity itself<\/strong>, and the <strong data-start=\"1703\" data-end=\"1763\">tax debt is directly collected from the company\u2019s assets<\/strong>.<\/p>\n<ul>\n<li data-start=\"1768\" data-end=\"1816\">\n<h2><span class=\"ez-toc-section\" id=\"Who_is_a_Tax_Responsible_Person_in_Turkey\"><\/span>Who is a Tax Responsible Person in Turkey?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<\/li>\n<\/ul>\n<p data-start=\"1817\" data-end=\"2257\"><strong>A<\/strong> <strong data-start=\"1819\" data-end=\"1845\">tax responsible person in Turkey<\/strong> is the person who, in terms of <strong data-start=\"1887\" data-end=\"1905\">payment of tax<\/strong>, is <strong data-start=\"1910\" data-end=\"1960\">held accountable before the tax administration<\/strong> as the creditor. The important point here is that the <strong data-start=\"2015\" data-end=\"2131\">tax responsible person assumes this responsibility not on their own behalf, but on behalf of the actual taxpayer<\/strong>. In other words, the <strong data-start=\"2153\" data-end=\"2254\">tax responsible person is a third party who is held liable for the payment of the taxpayer\u2019s debt<\/strong>.<\/p>\n<ul>\n<li data-start=\"2259\" data-end=\"2315\">\n<h2><span class=\"ez-toc-section\" id=\"What_is_the_Scope_of_Tax_Responsibility_in_Turkey\"><\/span>What is the Scope of Tax Responsibility in Turkey?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<\/li>\n<\/ul>\n<p data-start=\"2316\" data-end=\"2511\">Under the <strong data-start=\"2326\" data-end=\"2355\">Turkish Tax Procedure Law<\/strong>, <strong data-start=\"2357\" data-end=\"2379\">tax responsibility<\/strong> arises in various situations and may apply to different persons. <strong>This responsibility can be examined under three main categories:<\/strong><\/p>\n<ol>\n<li data-start=\"2516\" data-end=\"2837\"><strong data-start=\"2516\" data-end=\"2579\">Tax Liability of Legal Representatives in Turkey:<\/strong> In companies, <strong data-start=\"2594\" data-end=\"2667\">members of the board of directors, managers, or legal representatives<\/strong> may be held <strong data-start=\"2680\" data-end=\"2723\">personally liable with their own assets<\/strong> for the company\u2019s unpaid tax debts. This regulation aims to <strong data-start=\"2784\" data-end=\"2834\">safeguard the collection of public receivables<\/strong>.<\/li>\n<li data-start=\"2842\" data-end=\"3357\"><strong data-start=\"2842\" data-end=\"2893\">Responsibility of Withholding Agents in Turkey:<\/strong> In certain taxes, such as <strong data-start=\"2920\" data-end=\"2934\">Income Tax<\/strong> and <a href=\"https:\/\/www.cbhukuk.com\/en\/vat-in-turkey\/\"><strong data-start=\"2939\" data-end=\"2958\">Value Added Tax<\/strong><\/a>, <strong data-start=\"2960\" data-end=\"2985\">withholding at source<\/strong> is prescribed (for example, in cases where <a href=\"https:\/\/www.cbhukuk.com\/en\/tax-on-foreign-income-in-turkey\/\"><strong data-start=\"3029\" data-end=\"3082\">wages are paid from abroad to employees in Turkey<\/strong><\/a>). In such cases, the <strong data-start=\"3104\" data-end=\"3167\">person or entity making the payment and withholding the tax<\/strong> is obliged to <strong data-start=\"3182\" data-end=\"3226\">remit the deducted tax to the tax office<\/strong> within the prescribed period. Those who fail to withhold or remit the tax are directly addressed as <strong data-start=\"3327\" data-end=\"3354\">tax responsible persons<\/strong>.<\/li>\n<li data-start=\"3362\" data-end=\"3830\"><strong data-start=\"3362\" data-end=\"3395\">Tax Liability of Heirs in Turkey:<\/strong> Upon the <strong data-start=\"3405\" data-end=\"3428\">death of a taxpayer<\/strong>, the <strong data-start=\"3434\" data-end=\"3480\">tax debt does not automatically extinguish<\/strong>. Under the <strong data-start=\"3492\" data-end=\"3518\">Turkish tax law system<\/strong>, <strong data-start=\"3520\" data-end=\"3602\">heirs are held liable for the deceased\u2019s tax debts in proportion to the estate<\/strong>, provided that <a href=\"https:\/\/www.cbhukuk.com\/en\/disclaimer-of-inheritance\/\"><strong>the inheritance is not renounced<\/strong><\/a>, in accordance with the provisions of <a href=\"https:\/\/www.cbhukuk.com\/en\/practice-areas\/inheritance-law-in-turkey\/\"><strong>Turkish<\/strong> <strong data-start=\"3689\" data-end=\"3708\">inheritance law<\/strong><\/a>. This regulation seeks to <strong data-start=\"3735\" data-end=\"3762\">protect public interest<\/strong> by preventing the <strong data-start=\"3781\" data-end=\"3827\">extinction of tax receivables due to death<\/strong>.<\/li>\n<\/ol>\n<\/div><\/div><\/div><\/div><\/div><\/div><\/section><section class=\"l-section wpb_row height_small\"><div class=\"l-section-h i-cf\"><div class=\"g-cols vc_row via_grid cols_1 laptops-cols_inherit tablets-cols_inherit mobiles-cols_1 valign_top type_default stacking_default\"><div class=\"wpb_column vc_column_container\"><div class=\"vc_column-inner\"><div class=\"w-iconbox us_custom_aea21514 iconpos_left style_default color_secondary align_center no_title\"><div class=\"w-iconbox-icon\" style=\"font-size:2rem;\"><i class=\"fas fa-gavel\"><\/i><\/div><div class=\"w-iconbox-meta\"><div class=\"w-iconbox-text\"><div class=\"flex-shrink-0 flex flex-col relative items-end\">\n<div>\n<div class=\"pt-0\">\n<div class=\"gizmo-bot-avatar flex h-8 w-8 items-center justify-center overflow-hidden rounded-full\">\n<div class=\"relative p-1 rounded-sm flex items-center justify-center bg-token-main-surface-primary text-token-text-primary h-8 w-8\"><strong><a href=\"https:\/\/www.mevzuat.gov.tr\/mevzuat?MevzuatNo=213&amp;MevzuatTur=1&amp;MevzuatTertip=4\" target=\"_blank\" rel=\"noopener\">TAX PROCEDURE LAW<\/a> Duties of Legal Representatives:<\/strong><\/div>\n<div><\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"group\/conversation-turn relative flex w-full min-w-0 flex-col agent-turn\">\n<div class=\"flex-col gap-1 md:gap-3\">\n<div class=\"flex max-w-full flex-col flex-grow\">\n<div class=\"min-h-8 text-message flex w-full flex-col items-end gap-2 whitespace-normal break-words &#091;.text-message+&amp;&#093;:mt-5\" dir=\"auto\" data-message-author-role=\"assistant\" data-message-id=\"20be9276-7071-4a1e-985f-96a6b7d9911f\" data-message-model-slug=\"gpt-4o\">\n<div class=\"flex w-full flex-col gap-1 empty:hidden first:pt-&#091;3px&#093;\">\n<div class=\"result-streaming markdown prose w-full break-words dark:prose-invert light\">\n<p><strong>Article 10<\/strong> \u2013 In cases where legal entities, minors, and restricted persons, as well as entities without legal personality such as foundations and communities, are taxpayers or tax responsible parties, the obligations incumbent on them are fulfilled by their legal representatives, the administrators of entities without legal personality, or their representatives, if any.<\/p>\n<p>The taxes and related receivables that cannot be fully or partially collected from the assets of the taxpayers or tax responsible parties due to the failure of those mentioned above to fulfill their obligations shall be collected from the assets of those who failed to fulfill these legal duties. This provision also applies to the representatives of taxpayers who are not present in Turkey.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div><\/div><\/div><\/div><\/div><\/div><\/div><\/section><section class=\"l-section wpb_row height_auto\"><div class=\"l-section-h i-cf\"><div class=\"g-cols vc_row via_grid cols_1 laptops-cols_inherit tablets-cols_inherit mobiles-cols_1 valign_top type_default stacking_default\"><div class=\"wpb_column vc_column_container\"><div class=\"vc_column-inner\"><div class=\"wpb_text_column us_custom_275474cc has_text_color\"><div class=\"wpb_wrapper\"><h2 data-start=\"123\" data-end=\"190\"><span class=\"ez-toc-section\" id=\"TAX_LIABILITY_OF_LEGAL_REPRESENTATIVES_OF_COMPANIES_IN_TURKEY\"><\/span><strong data-start=\"123\" data-end=\"188\">TAX LIABILITY OF LEGAL REPRESENTATIVES OF COMPANIES IN TURKEY<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p data-start=\"192\" data-end=\"581\"><strong>In Turkey, the<\/strong> <strong data-start=\"211\" data-end=\"289\">liability of a company\u2019s legal representatives for the company\u2019s tax debts<\/strong> is regulated under both the <strong data-start=\"318\" data-end=\"345\">Tax Procedure Law (VUK)<\/strong> and the <strong data-start=\"354\" data-end=\"420\">Law on the Collection Procedure of Public Receivables (AATUHK)<\/strong> within the framework of <strong data-start=\"445\" data-end=\"468\">Turkish Company Law<\/strong>. These provisions aim to secure the collection of public receivables and to determine the responsible parties.<\/p>\n<p data-start=\"583\" data-end=\"651\"><strong data-start=\"583\" data-end=\"628\">Article 10 of the Tax Procedure Law (VUK)<\/strong> provides as follows:<\/p>\n<blockquote>\n<p data-start=\"653\" data-end=\"881\"><em data-start=\"653\" data-end=\"879\">Legal representatives are jointly and severally liable, without limitation, for the tax debts of legal entities, provided that such debts have arisen during the period in which they held the office of legal representative.<\/em><\/p>\n<\/blockquote>\n<p data-start=\"883\" data-end=\"1035\">This provision explicitly sets forth <strong data-start=\"920\" data-end=\"1032\">the circumstances under which legal representatives in Turkey may be held liable for the company\u2019s tax debts<\/strong>.<\/p>\n<p data-start=\"1037\" data-end=\"1113\">On the other hand, <strong data-start=\"1056\" data-end=\"1090\">Article 35 (bis) of the AATUHK<\/strong> provides as follows:<\/p>\n<blockquote>\n<p data-start=\"1115\" data-end=\"1290\"><em data-start=\"1115\" data-end=\"1288\">Legal representatives of legal entity debtors may be held jointly and severally liable, either with limited or unlimited liability, for tax and other public receivables.<\/em><\/p>\n<\/blockquote>\n<p data-start=\"1292\" data-end=\"1436\">This provision establishes the <strong data-start=\"1323\" data-end=\"1355\">general liability mechanisms<\/strong> to which the state may resort in the collection of <strong data-start=\"1407\" data-end=\"1433\">all public receivables<\/strong>.<\/p>\n<p data-start=\"1438\" data-end=\"1921\">In the Turkish legal system, <strong>the principle of<\/strong> <strong data-start=\"1484\" data-end=\"1523\">lex specialis derogat legi generali<\/strong> <strong>(special provisions prevail over general provisions)<\/strong> applies. In the context of <strong data-start=\"1604\" data-end=\"1631\">tax liability in Turkey<\/strong>, <strong data-start=\"1633\" data-end=\"1658\">Article 10 of the VUK<\/strong>, which regulates only tax receivables, constitutes a <strong data-start=\"1712\" data-end=\"1733\">special provision<\/strong> in comparison with <strong data-start=\"1753\" data-end=\"1787\">Article 35 (bis) of the AATUHK<\/strong>. Therefore, in theory, <strong data-start=\"1811\" data-end=\"1918\">the liability of a company\u2019s legal representative for tax debts should be assessed under VUK Article 10<\/strong>.<\/p>\n<p data-start=\"1923\" data-end=\"2243\">However, in practice, <strong data-start=\"1945\" data-end=\"2073\">tax offices in Turkey initiate enforcement proceedings against legal representatives based on Article 35 (bis) of the AATUHK<\/strong> in order to collect the company\u2019s tax debts. This approach is <strong data-start=\"2136\" data-end=\"2174\">contrary to the hierarchy of norms<\/strong> and conflicts with the <strong data-start=\"2198\" data-end=\"2231\">principles of the rule of law<\/strong>, because:<\/p>\n<ol>\n<li data-start=\"2247\" data-end=\"2321\"><strong data-start=\"2247\" data-end=\"2318\">A general provision is being applied instead of a special provision<\/strong>,<\/li>\n<li data-start=\"2324\" data-end=\"2361\"><strong data-start=\"2324\" data-end=\"2358\">This creates legal uncertainty<\/strong>,<\/li>\n<li data-start=\"2364\" data-end=\"2460\"><strong data-start=\"2364\" data-end=\"2457\">It broadens the scope of liability of legal representatives and restricts taxpayer rights<\/strong>.<\/li>\n<\/ol>\n<p data-start=\"2462\" data-end=\"2839\">For this reason, in disputes concerning <strong>the<\/strong> <strong data-start=\"2506\" data-end=\"2571\">tax liability of legal representatives of companies in Turkey<\/strong>, it is of great importance to seek the assistance of <a href=\"https:\/\/www.cbhukuk.com\/en\/legal-services\/tax-lawyer-in-turkey\/\"><strong>a specialized tax lawyer in Turkey<\/strong><\/a>. <strong data-start=\"2655\" data-end=\"2694\">Legal counsel plays a critical role<\/strong> both in ensuring the correct application of <strong data-start=\"2739\" data-end=\"2757\">VUK Article 10<\/strong> and in keeping the liability of legal representatives within the lawful limits.<\/p>\n<h3><a ref=\"magnificPopup\" href=\"https:\/\/www.cbhukuk.com\/wp-content\/uploads\/2024\/06\/yurtdisindan-maas-almanin-vergisel-boyutu-2-e1755608691768.jpg\"><img decoding=\"async\" class=\"aligncenter size-us_800_400 wp-image-5161\" src=\"https:\/\/www.cbhukuk.com\/wp-content\/uploads\/2024\/06\/yurtdisindan-maas-almanin-vergisel-boyutu-2-800x292.jpg\" alt=\"foreign income from abroad in Turkey\" width=\"800\" height=\"292\" \/><\/a><\/h3>\n<ul>\n<li>\n<h3><span class=\"ez-toc-section\" id=\"Tax_Liability_of_Joint_Stock_Companies_in_Turkey\"><\/span>Tax Liability of Joint Stock Companies in Turkey<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<\/li>\n<\/ul>\n<p data-start=\"187\" data-end=\"638\">In <strong data-start=\"190\" data-end=\"200\">Turkey<\/strong>, the <strong data-start=\"206\" data-end=\"223\">tax liability<\/strong> and other <strong data-start=\"234\" data-end=\"304\">obligations related to public receivables in joint stock companies<\/strong> are primarily fulfilled through the company\u2019s <strong data-start=\"351\" data-end=\"376\">legal representatives<\/strong> and <strong data-start=\"381\" data-end=\"418\">members of the board of directors<\/strong>. In cases of <strong data-start=\"432\" data-end=\"483\">neglect or non-fulfillment of these obligations<\/strong>, taxes and other public receivables that the state cannot collect <strong data-start=\"550\" data-end=\"635\">may be claimed against the personal assets of the legal representatives in Turkey<\/strong>.<\/p>\n<p data-start=\"640\" data-end=\"991\">This regulation aims both to <strong data-start=\"669\" data-end=\"727\">ensure that companies fulfill their public obligations<\/strong> and to <strong data-start=\"735\" data-end=\"808\">determine responsible parties in the collection of public receivables<\/strong>. Accordingly, in <strong data-start=\"826\" data-end=\"861\">joint stock companies in Turkey<\/strong>, <strong data-start=\"863\" data-end=\"906\">legal representatives and board members<\/strong> become <strong data-start=\"914\" data-end=\"947\">personally liable individuals<\/strong> if they <strong data-start=\"956\" data-end=\"988\">fail to perform their duties<\/strong>.<\/p>\n<h4 data-start=\"998\" data-end=\"1103\"><span class=\"ez-toc-section\" id=\"a_Personal_Liability_of_Legal_Representatives_for_Tax_Debts_in_Joint_Stock_Companies_in_Turkey\"><\/span>a) <strong data-start=\"1005\" data-end=\"1101\">Personal Liability of Legal Representatives for Tax Debts in Joint Stock Companies in Turkey<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p data-start=\"1105\" data-end=\"1429\">In <strong data-start=\"1108\" data-end=\"1118\">Turkey<\/strong>, <strong data-start=\"1120\" data-end=\"1162\">tax liability in joint stock companies<\/strong> is primarily fulfilled through <strong data-start=\"1194\" data-end=\"1219\">legal representatives<\/strong>. When <strong data-start=\"1226\" data-end=\"1259\">taxes and related receivables<\/strong> owed by the company <strong data-start=\"1280\" data-end=\"1348\">cannot be fully or partially collected from the company\u2019s assets<\/strong>, they are <strong data-start=\"1359\" data-end=\"1426\">collected from the personal assets of the legal representatives<\/strong>.<\/p>\n<p data-start=\"1431\" data-end=\"1764\">This regulation also applies to <strong data-start=\"1463\" data-end=\"1561\"><a href=\"https:\/\/www.cbhukuk.com\/en\/establishing-a-liaison-office-in-turkey\/\">liaison offices<\/a>, <a href=\"https:\/\/www.cbhukuk.com\/en\/establishing-a-foreign-company-branch-in-turkey\/\">branches of foreign companies in Turkey<\/a><\/strong>, thereby <strong data-start=\"1571\" data-end=\"1641\">extending the scope of legal liability to international operations<\/strong>. Moreover, <strong data-start=\"1653\" data-end=\"1725\">legal representatives have the right of recourse against the company<\/strong> for any public debts they have paid.<\/p>\n<p data-start=\"1766\" data-end=\"2014\">Thus, in <strong data-start=\"1775\" data-end=\"1810\">joint stock companies in Turkey<\/strong>, <strong data-start=\"1812\" data-end=\"1938\">legal representatives act not only on behalf of the company but also carry personal liability if public debts are not paid<\/strong>, which is <strong data-start=\"1949\" data-end=\"2011\">critical for securing the collection of public receivables<\/strong>.<\/p>\n<h4 data-start=\"2021\" data-end=\"2094\"><span class=\"ez-toc-section\" id=\"b_Liability_for_Social_Security_Debts_in_Joint_Stock_Companies\"><\/span>b) <strong data-start=\"2028\" data-end=\"2092\">Liability for Social Security Debts in Joint Stock Companies<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p data-start=\"2096\" data-end=\"2772\"><strong data-start=\"2096\" data-end=\"2136\">Unpaid social security contributions<\/strong> to the <strong data-start=\"2144\" data-end=\"2181\">Social Security Institution (SGK)<\/strong>, including <strong data-start=\"2193\" data-end=\"2362\">insurance premiums, general health insurance contributions, <a href=\"https:\/\/www.cbhukuk.com\/en\/employment-termination-codes\/\">unemployment insurance contributions<\/a>, administrative fines, late payment penalties, and other receivables<\/strong>, are <strong data-start=\"2368\" data-end=\"2478\">jointly and severally payable by the company\u2019s board members, senior executives, and legal representatives<\/strong>. <strong data-start=\"2480\" data-end=\"2544\">Tax debts that cannot be collected from the company\u2019s assets<\/strong> are satisfied from the <strong data-start=\"2568\" data-end=\"2634\">personal assets of legal representatives and senior executives<\/strong>. This regulation is of <strong data-start=\"2658\" data-end=\"2688\">great importance in Turkey<\/strong> for <strong data-start=\"2693\" data-end=\"2769\">securing the collection of public receivables and establishing liability<\/strong>.<\/p>\n<p data-start=\"2774\" data-end=\"3027\">It should be emphasized that <strong data-start=\"2803\" data-end=\"2953\">SGK-related contributions and debts are considered public receivables under Law No. 6183 on the Procedure for the Collection of Public Receivables<\/strong>, and therefore <strong data-start=\"2969\" data-end=\"3024\">senior executives have personal liability in Turkey<\/strong>.<\/p>\n<p data-start=\"3029\" data-end=\"3518\">In contrast, <strong data-start=\"3042\" data-end=\"3100\">employment-related claims arising from labor contracts<\/strong> under <a href=\"https:\/\/www.cbhukuk.com\/en\/practice-areas\/labor-law-in-turkey\/\"><strong>Turkish Labor Law<\/strong><\/a> (such as <strong data-start=\"3110\" data-end=\"3249\"><a href=\"https:\/\/www.cbhukuk.com\/en\/severance-pay-calculation\/\">severance pay<\/a>, <a href=\"https:\/\/www.cbhukuk.com\/en\/worker-compensation-rights-in-turkey\/\">dismissal compensation<\/a>, <a href=\"https:\/\/www.cbhukuk.com\/en\/notice-pay-in-turkey\/\">notice pay<\/a>, <a href=\"https:\/\/www.cbhukuk.com\/en\/overtime-work-in-turkey\/\">overtime claims<\/a>, <a href=\"https:\/\/www.cbhukuk.com\/en\/annual-leave-calculation\/\">annual leave remuneration<\/a>, <a href=\"https:\/\/www.cbhukuk.com\/en\/reinstatement-lawsuit\/\">reinstatement claims<\/a>, salaries, and other labor claims<\/strong>) <strong data-start=\"3251\" data-end=\"3284\">do not fall within this scope<\/strong>. <strong data-start=\"3286\" data-end=\"3357\">Liability for such claims rests solely with the legal entity itself<\/strong>. It is <strong data-start=\"3365\" data-end=\"3436\">not possible to pursue the personal assets of legal representatives<\/strong> for debts arising from <strong data-start=\"3460\" data-end=\"3515\"><a href=\"https:\/\/www.cbhukuk.com\/en\/types-of-employment-contracts\/\">termination of employment contracts<\/a> or <a href=\"https:\/\/www.cbhukuk.com\/en\/wrongful-termination\/\">wrongful termination in Turkey<\/a><\/strong>.<\/p>\n<h4 data-start=\"107\" data-end=\"205\"><span class=\"ez-toc-section\" id=\"c_Joint_and_Several_Liability_for_Public_Receivables_in_Joint_Stock_Companies_in_Turkey\"><\/span>c) <strong data-start=\"114\" data-end=\"203\">Joint and Several Liability for Public Receivables in Joint Stock Companies in Turkey<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p data-start=\"207\" data-end=\"465\">When the <strong data-start=\"216\" data-end=\"278\">legal representative, board members, and senior executives<\/strong> are different individuals at the time a <strong data-start=\"319\" data-end=\"358\">public receivable arises and is due<\/strong>, these persons are <strong data-start=\"378\" data-end=\"462\">jointly and severally liable for public debts in joint stock companies in Turkey<\/strong>.<\/p>\n<p data-start=\"467\" data-end=\"651\">Accordingly, <strong data-start=\"480\" data-end=\"566\">board members are only liable for public debts arising during their term of office<\/strong>; they <strong data-start=\"573\" data-end=\"648\">bear no responsibility for debts incurred after leaving their positions<\/strong>.<\/p>\n<h4 data-start=\"658\" data-end=\"740\"><span class=\"ez-toc-section\" id=\"d_Liability_for_Tax_Debts_in_Liquidated_Joint_Stock_Companies_in_Turkey\"><\/span>d) <strong data-start=\"665\" data-end=\"738\">Liability for Tax Debts in Liquidated Joint Stock Companies in Turkey<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p data-start=\"742\" data-end=\"973\">Even if a <strong data-start=\"752\" data-end=\"822\">joint stock company in Turkey has entered or completed liquidation<\/strong>, the <strong data-start=\"828\" data-end=\"970\">legal representative\u2019s liability for tax debts arising from public receivables incurred prior to the commencement of liquidation continues<\/strong>.<\/p>\n<p data-start=\"975\" data-end=\"1253\">This provision <strong data-start=\"990\" data-end=\"1069\">ensures the protection of public receivables during the liquidation process<\/strong> and <strong data-start=\"1074\" data-end=\"1250\">explicitly establishes that legal representatives of joint stock companies continue to carry personal liability for debts that cannot be collected from the company\u2019s assets<\/strong>.<\/p>\n<h4 data-start=\"95\" data-end=\"183\"><span class=\"ez-toc-section\" id=\"e_Liability_of_Board_Members_for_Tax_Debts_in_Joint_Stock_Companies_in_Turkey\"><\/span>e) <strong data-start=\"102\" data-end=\"181\">Liability of Board Members for Tax Debts in Joint Stock Companies in Turkey<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p data-start=\"185\" data-end=\"691\">In <strong data-start=\"188\" data-end=\"198\">Turkey<\/strong>, <strong data-start=\"200\" data-end=\"268\">management and representation authority in joint stock companies<\/strong> is exercised by the <strong data-start=\"289\" data-end=\"311\">board of directors<\/strong> pursuant to <strong data-start=\"324\" data-end=\"376\">Article 365 of the Turkish Commercial Code (TCC)<\/strong>. The <strong data-start=\"382\" data-end=\"404\">board of directors<\/strong> is the <strong data-start=\"412\" data-end=\"475\">highest body authorized to manage and represent the company<\/strong> and, under <strong data-start=\"487\" data-end=\"508\">Article 367\/1 TCC<\/strong>, may <strong data-start=\"514\" data-end=\"558\">partially or fully delegate these powers<\/strong> to one or more board members or third parties through <strong><a href=\"https:\/\/www.cbhukuk.com\/en\/practice-areas\/contract-law-in-turkey\/\">a provision in the articles<\/a> of association<\/strong> or an <strong data-start=\"666\" data-end=\"688\">internal directive<\/strong>.<\/p>\n<p data-start=\"693\" data-end=\"855\">However, if such delegation is not made, <strong data-start=\"734\" data-end=\"802\">board members in Turkey hold the status of legal representatives<\/strong> and are <strong data-start=\"811\" data-end=\"852\">liable for the company\u2019s public debts<\/strong>.<\/p>\n<p data-start=\"857\" data-end=\"1139\"><strong data-start=\"857\" data-end=\"980\">Board members of joint stock companies in Turkey are personally liable for all public debts arising during their tenure<\/strong>. This liability <strong data-start=\"997\" data-end=\"1042\">does not continue after they leave office<\/strong>, but they are <strong data-start=\"1057\" data-end=\"1136\">responsible with their personal assets for debts incurred during their term<\/strong>.<\/p>\n<h4 data-start=\"1146\" data-end=\"1233\"><span class=\"ez-toc-section\" id=\"f_Liability_of_Shareholders_for_Tax_Debts_in_Joint_Stock_Companies_in_Turkey\"><\/span>f) <strong data-start=\"1153\" data-end=\"1231\">Liability of Shareholders for Tax Debts in Joint Stock Companies in Turkey<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p data-start=\"1235\" data-end=\"1467\"><strong data-start=\"1235\" data-end=\"1278\">Shareholders who are also board members<\/strong> are liable for the company\u2019s <strong data-start=\"1308\" data-end=\"1334\">public debts in Turkey<\/strong>, <strong data-start=\"1336\" data-end=\"1384\">regardless of the size of their shareholding<\/strong>. However, this <strong data-start=\"1400\" data-end=\"1464\">liability arises solely from their position as board members<\/strong>.<\/p>\n<p data-start=\"1469\" data-end=\"1659\">On the other hand, <strong data-start=\"1488\" data-end=\"1585\">shareholders who are not board members and hold no administrative or representation authority<\/strong> <strong data-start=\"1586\" data-end=\"1615\">do not bear any liability<\/strong> for the company\u2019s public debts in Turkey.<\/p>\n<p data-start=\"1469\" data-end=\"1659\">In <strong data-start=\"1688\" data-end=\"1723\">joint stock companies in Turkey<\/strong>, in cases of <strong data-start=\"1737\" data-end=\"1768\">non-payment of public debts<\/strong>, liability is <strong data-start=\"1783\" data-end=\"1867\">primarily imposed on legal representatives, board members, and senior executives<\/strong>. These individuals are <strong data-start=\"1891\" data-end=\"1959\">obliged to pay public debts from their personal assets in Turkey<\/strong> and have the <strong data-start=\"1973\" data-end=\"2014\">right of recourse against the company<\/strong> for amounts paid.<\/p>\n<h4 data-start=\"107\" data-end=\"212\"><a ref=\"magnificPopup\" href=\"https:\/\/www.cbhukuk.com\/wp-content\/uploads\/2024\/10\/kanuni-temsilcinin-vergi-borcundan-sorumlulugu.jpg\"><img decoding=\"async\" class=\"aligncenter size-us_800_400 wp-image-5451\" src=\"https:\/\/www.cbhukuk.com\/wp-content\/uploads\/2024\/10\/kanuni-temsilcinin-vergi-borcundan-sorumlulugu-800x219.jpg\" alt=\"Liability of Legal Representatives for Tax Debts in Turkey\" width=\"800\" height=\"219\" srcset=\"https:\/\/www.cbhukuk.com\/wp-content\/uploads\/2024\/10\/kanuni-temsilcinin-vergi-borcundan-sorumlulugu-800x219.jpg 800w, https:\/\/www.cbhukuk.com\/wp-content\/uploads\/2024\/10\/kanuni-temsilcinin-vergi-borcundan-sorumlulugu-300x82.jpg 300w, https:\/\/www.cbhukuk.com\/wp-content\/uploads\/2024\/10\/kanuni-temsilcinin-vergi-borcundan-sorumlulugu-1024x280.jpg 1024w, https:\/\/www.cbhukuk.com\/wp-content\/uploads\/2024\/10\/kanuni-temsilcinin-vergi-borcundan-sorumlulugu-100x27.jpg 100w, https:\/\/www.cbhukuk.com\/wp-content\/uploads\/2024\/10\/kanuni-temsilcinin-vergi-borcundan-sorumlulugu-90x25.jpg 90w, https:\/\/www.cbhukuk.com\/wp-content\/uploads\/2024\/10\/kanuni-temsilcinin-vergi-borcundan-sorumlulugu.jpg 1500w\" sizes=\"(max-width: 800px) 100vw, 800px\" \/><\/a><\/h4>\n<h4 data-start=\"107\" data-end=\"212\"><span class=\"ez-toc-section\" id=\"g_Liability_of_Senior_Executives_and_Managers_for_Tax_Debts_in_Joint_Stock_Companies_in_Turkey\"><\/span>g) <strong data-start=\"114\" data-end=\"210\">Liability of Senior Executives and Managers for Tax Debts in Joint Stock Companies in Turkey<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p data-start=\"214\" data-end=\"690\">Pursuant to <strong data-start=\"226\" data-end=\"322\">Article 35 (bis) of the Law on the Collection Procedure of Public Receivables (Law No. 6183)<\/strong>, in <strong data-start=\"327\" data-end=\"362\">joint stock companies in Turkey<\/strong>, <strong data-start=\"364\" data-end=\"434\">tax liability can be personally enforced against senior executives<\/strong> if it <strong data-start=\"441\" data-end=\"481\">cannot be collected from the company<\/strong>. In Turkey, the <strong data-start=\"498\" data-end=\"563\">liability of legal representatives and managers for tax debts<\/strong> is evaluated based on their authority under the <strong data-start=\"612\" data-end=\"645\">Turkish Commercial Code (TCC)<\/strong> to <strong data-start=\"649\" data-end=\"687\">manage the company and incur debts<\/strong>.<\/p>\n<p data-start=\"692\" data-end=\"1096\"><strong data-start=\"692\" data-end=\"778\">Decisions of the Court of Cassation (Yarg\u0131tay) and the Council of State (Dan\u0131\u015ftay)<\/strong> emphasize that, to be <strong data-start=\"801\" data-end=\"843\">held liable for tax debts in companies<\/strong>, a person must have <strong data-start=\"864\" data-end=\"911\">authority to represent and bind the company<\/strong>. In this context, <strong data-start=\"930\" data-end=\"970\">board members retain their liability<\/strong> unless they <strong data-start=\"983\" data-end=\"1065\">delegate their representation powers to managing members or managing directors<\/strong> under <strong data-start=\"1072\" data-end=\"1093\">Article 370\/2 TCC<\/strong>.<\/p>\n<p data-start=\"1098\" data-end=\"1280\">For <strong data-start=\"1102\" data-end=\"1115\">tax debts<\/strong>, <strong data-start=\"1117\" data-end=\"1162\">Article 10 of the Tax Procedure Law (VUK)<\/strong> applies. Accordingly, <strong data-start=\"1185\" data-end=\"1277\">tax liability in companies arises for persons holding the status of legal representative<\/strong>.<\/p>\n<p data-start=\"1282\" data-end=\"1720\">However, <strong data-start=\"1291\" data-end=\"1333\">jurisprudence of Yarg\u0131tay and Dan\u0131\u015ftay<\/strong> clarifies that <strong data-start=\"1349\" data-end=\"1423\">merely granting a person limited signature authority is not sufficient<\/strong> for that person to be held <strong data-start=\"1451\" data-end=\"1497\">liable as a legal representative in Turkey<\/strong>. For example, in a decision of the <strong data-start=\"1533\" data-end=\"1586\">Council of State General Assembly of Tax Chambers<\/strong>, it was held that <strong data-start=\"1605\" data-end=\"1717\">a person with second-degree and second-group signature authority cannot be considered a legal representative<\/strong>.<\/p>\n<p data-start=\"1722\" data-end=\"1845\">Such jurisprudence demonstrates that <strong data-start=\"1759\" data-end=\"1842\">tax debt liability under VUK parallels the liability provisions of Law No. 6183<\/strong>.<\/p>\n<p data-start=\"1847\" data-end=\"2199\"><strong data-start=\"1847\" data-end=\"1996\">Yarg\u0131tay and Dan\u0131\u015ftay require that persons liable as legal representatives for public debts must have authority to represent and bind the company<\/strong>. <strong data-start=\"1998\" data-end=\"2089\">Board members and senior executives are held liable unless they delegate this authority<\/strong>. Nevertheless, <strong data-start=\"2105\" data-end=\"2196\">liability may continue for debts arising during the period when authority was delegated<\/strong>.<\/p>\n<blockquote>\n<p data-start=\"2201\" data-end=\"2642\"><strong data-start=\"2201\" data-end=\"2231\">Example Judicial Decision:<\/strong><br data-start=\"2231\" data-end=\"2234\" \/>The <strong data-start=\"2238\" data-end=\"2291\">Council of State General Assembly of Tax Chambers<\/strong>, in its decision dated <strong data-start=\"2315\" data-end=\"2329\">13.11.2013<\/strong>, held that <strong data-start=\"2341\" data-end=\"2457\">a deputy general manager with second-degree signature authority does not hold the status of legal representative<\/strong> and therefore <strong data-start=\"2472\" data-end=\"2514\">cannot be held liable for public debts<\/strong>. This decision highlights the need to <strong data-start=\"2553\" data-end=\"2639\">carefully examine the period and individuals to whom public debts are attributable<\/strong>.<\/p>\n<\/blockquote>\n<ul>\n<li>\n<h3 data-start=\"107\" data-end=\"178\"><span class=\"ez-toc-section\" id=\"Tax_Liability_in_Limited_Liability_Companies_LLCs_in_Turkey\"><\/span><strong data-start=\"111\" data-end=\"176\">Tax Liability in Limited Liability Companies (LLCs) in Turkey<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<\/li>\n<\/ul>\n<p data-start=\"107\" data-end=\"178\"><span style=\"font-family: inherit; font-size: 16px;\">In <\/span><strong style=\"font-family: inherit; font-size: 16px;\" data-start=\"183\" data-end=\"193\">Turkey<\/strong><span style=\"font-family: inherit; font-size: 16px;\">, the <\/span><strong style=\"font-family: inherit; font-size: 16px;\" data-start=\"199\" data-end=\"278\">tax liability and collection of taxes in limited liability companies (LLCs)<\/strong><span style=\"font-family: inherit; font-size: 16px;\"> is one of the areas where <\/span><strong style=\"font-family: inherit; font-size: 16px;\" data-start=\"305\" data-end=\"369\">legal disputes regarding public receivables frequently arise<\/strong><span style=\"font-family: inherit; font-size: 16px;\">. One of the <\/span><strong style=\"font-family: inherit; font-size: 16px;\" data-start=\"382\" data-end=\"414\">fundamental features of LLCs<\/strong><span style=\"font-family: inherit; font-size: 16px;\"> is that <\/span><strong style=\"font-family: inherit; font-size: 16px;\" data-start=\"423\" data-end=\"483\">shareholders are not personally liable for company debts<\/strong><span style=\"font-family: inherit; font-size: 16px;\">. Accordingly, the <\/span><strong style=\"font-family: inherit; font-size: 16px;\" data-start=\"502\" data-end=\"527\">LLC as a legal entity<\/strong><span style=\"font-family: inherit; font-size: 16px;\"> is <\/span><strong style=\"font-family: inherit; font-size: 16px;\" data-start=\"531\" data-end=\"584\">generally responsible for its own debts in Turkey<\/strong><span style=\"font-family: inherit; font-size: 16px;\">.<\/span><\/p>\n<p data-start=\"107\" data-end=\"178\">However, in practice, <strong data-start=\"611\" data-end=\"700\">various legal issues and uncertainties arise in the collection of tax debts in Turkey<\/strong>, particularly when the <strong data-start=\"724\" data-end=\"782\">company\u2019s assets are insufficient to cover liabilities<\/strong> and <strong data-start=\"787\" data-end=\"866\">tax authorities seek recourse against legal representatives or shareholders<\/strong>.<\/p>\n<h4 data-start=\"876\" data-end=\"975\"><span class=\"ez-toc-section\" id=\"a_From_Whom_and_How_Can_Tax_Debts_Be_Collected_in_Limited_Liability_Companies_in_Turkey\"><\/span>a) <strong data-start=\"883\" data-end=\"973\">From Whom and How Can Tax Debts Be Collected in Limited Liability Companies in Turkey?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p data-start=\"977\" data-end=\"1238\">The legislation governing <strong data-start=\"1003\" data-end=\"1021\">tax collection<\/strong> does not provide <strong data-start=\"1039\" data-end=\"1129\">clear rules on the order and persons against whom collection should be pursued in LLCs<\/strong>, leading to <strong data-start=\"1142\" data-end=\"1166\">practical challenges<\/strong>. These uncertainties are particularly evident in the following areas:<\/p>\n<ul>\n<li data-start=\"1242\" data-end=\"1309\"><strong data-start=\"1242\" data-end=\"1306\">The order in which tax debts are collected in LLCs in Turkey<\/strong>,<\/li>\n<li data-start=\"1312\" data-end=\"1350\"><strong data-start=\"1312\" data-end=\"1347\">Which persons may be approached<\/strong>,<\/li>\n<li data-start=\"1353\" data-end=\"1508\"><strong data-start=\"1353\" data-end=\"1505\">Whether to apply Article 10 of the Tax Procedure Law (VUK) or Article 35 (bis) of the Law on the Collection Procedure of Public Receivables (AATUHK)<\/strong>.<\/li>\n<\/ul>\n<p data-start=\"1510\" data-end=\"1667\">Within the framework of <strong data-start=\"1534\" data-end=\"1569\">tax liability in LLCs in Turkey<\/strong>, the persons from whom <strong data-start=\"1593\" data-end=\"1623\">tax debts may be collected<\/strong> are regulated under different provisions:<\/p>\n<ol>\n<li data-start=\"1672\" data-end=\"1812\"><strong data-start=\"1672\" data-end=\"1737\">According to Article 573 of the Turkish Commercial Code (TCC)<\/strong>, <strong data-start=\"1739\" data-end=\"1809\">the legal entity of the LLC is primarily responsible for tax debts<\/strong>.<\/li>\n<li data-start=\"1816\" data-end=\"2020\"><strong data-start=\"1816\" data-end=\"1902\">If the debt cannot be fully or partially collected from the legal entity in Turkey<\/strong>, recourse may be sought <strong data-start=\"1927\" data-end=\"1989\">against shareholders in proportion to their capital shares<\/strong> under <strong data-start=\"1996\" data-end=\"2017\">Article 35 AATUHK<\/strong>.<\/li>\n<li data-start=\"2024\" data-end=\"2247\">For <strong data-start=\"2028\" data-end=\"2092\">tax debts that cannot be collected from the company\u2019s assets<\/strong>, recourse may also be taken <strong data-start=\"2121\" data-end=\"2191\">against the personal assets of the company\u2019s legal representatives<\/strong> under <strong data-start=\"2198\" data-end=\"2244\">Article 10 VUK and Article 35 (bis) AATUHK<\/strong>.<\/li>\n<\/ol>\n<p data-start=\"2249\" data-end=\"2520\">The <strong data-start=\"2253\" data-end=\"2375\">Decision of the Council of State Joint Chambers of Case Law dated 20.06.2019<\/strong> provides a <strong data-start=\"2387\" data-end=\"2517\">practical approach to address uncertainties regarding the order and persons to be pursued for tax debt collection in companies<\/strong>.<\/p>\n<p data-start=\"2522\" data-end=\"2802\">The Council <strong data-start=\"2534\" data-end=\"2629\">ruled that it is not mandatory to follow a strict order when collecting tax debts in Turkey<\/strong>, providing <strong data-start=\"2641\" data-end=\"2685\">tax authorities with greater flexibility<\/strong> and <strong data-start=\"2690\" data-end=\"2799\">reducing disputes regarding the priority of collection from the legal entity or its legal representatives<\/strong>.<\/p>\n<h4 data-start=\"108\" data-end=\"226\"><span class=\"ez-toc-section\" id=\"b_Liability_of_Managers_and_Senior_Executives_for_Tax_Debts_in_Limited_Liability_Companies_LLCs_in_Turkey\"><\/span>b) <strong data-start=\"115\" data-end=\"224\">Liability of Managers and Senior Executives for Tax Debts in Limited Liability Companies (LLCs) in Turkey<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p data-start=\"228\" data-end=\"435\">In <strong data-start=\"231\" data-end=\"241\">Turkey<\/strong>, <strong data-start=\"243\" data-end=\"308\">managers and senior executives of limited liability companies<\/strong> are <strong data-start=\"313\" data-end=\"354\">liable for the company\u2019s public debts<\/strong>. This <strong data-start=\"361\" data-end=\"432\">liability applies only to debts arising during their term of office<\/strong>.<\/p>\n<p data-start=\"437\" data-end=\"733\">Accordingly, even if the <strong data-start=\"462\" data-end=\"503\">tenure of managers or executives ends<\/strong>, their <strong data-start=\"511\" data-end=\"601\">liability for public debts incurred during their period of service continues in Turkey<\/strong>. This provision is <strong data-start=\"621\" data-end=\"730\">important for securing the collection of public receivables and clearly defining the periods of liability<\/strong>.<\/p>\n<h4 data-start=\"740\" data-end=\"833\"><span class=\"ez-toc-section\" id=\"c_Liability_of_Shareholders_for_Tax_Debts_in_Limited_Liability_Companies_in_Turkey\"><\/span>c) <strong data-start=\"747\" data-end=\"831\">Liability of Shareholders for Tax Debts in Limited Liability Companies in Turkey<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p data-start=\"835\" data-end=\"1033\"><strong data-start=\"835\" data-end=\"892\">Shareholders of limited liability companies in Turkey<\/strong> are <strong data-start=\"897\" data-end=\"1030\">liable for public receivables that cannot be fully or partially collected from the company, in proportion to their capital shares<\/strong>.<\/p>\n<p data-start=\"1035\" data-end=\"1227\">The <strong data-start=\"1039\" data-end=\"1113\">sole condition for holding shareholders liable for tax debts in Turkey<\/strong> is that <strong data-start=\"1122\" data-end=\"1224\">the debt cannot be collected from the company, or it is understood that collection is not possible<\/strong>.<\/p>\n<p data-start=\"1229\" data-end=\"1570\">Following amendments under <strong data-start=\"1256\" data-end=\"1272\">Law No. 5766<\/strong>, once it is <strong data-start=\"1285\" data-end=\"1346\">proven that the debt cannot be collected from the company<\/strong>, <strong data-start=\"1348\" data-end=\"1399\">personal assets of shareholders may be targeted<\/strong>. In other words, when it is <strong data-start=\"1428\" data-end=\"1504\">apparent that the public receivable cannot be collected from the company<\/strong>, <strong data-start=\"1506\" data-end=\"1567\">action may be taken against the shareholders and managers<\/strong>.<\/p>\n<h4 data-start=\"1577\" data-end=\"1657\"><a ref=\"magnificPopup\" href=\"https:\/\/www.cbhukuk.com\/wp-content\/uploads\/2024\/08\/fictitious-transaction-of-the-testator-in-turkey.jpg\"><img decoding=\"async\" class=\"aligncenter size-us_800_400 wp-image-7503\" src=\"https:\/\/www.cbhukuk.com\/wp-content\/uploads\/2024\/08\/fictitious-transaction-of-the-testator-in-turkey-800x223.jpg\" alt=\"Corporate Tax Liability in Turkey\" width=\"800\" height=\"223\" srcset=\"https:\/\/www.cbhukuk.com\/wp-content\/uploads\/2024\/08\/fictitious-transaction-of-the-testator-in-turkey-800x223.jpg 800w, https:\/\/www.cbhukuk.com\/wp-content\/uploads\/2024\/08\/fictitious-transaction-of-the-testator-in-turkey-300x84.jpg 300w, https:\/\/www.cbhukuk.com\/wp-content\/uploads\/2024\/08\/fictitious-transaction-of-the-testator-in-turkey-1024x286.jpg 1024w, https:\/\/www.cbhukuk.com\/wp-content\/uploads\/2024\/08\/fictitious-transaction-of-the-testator-in-turkey-100x28.jpg 100w, https:\/\/www.cbhukuk.com\/wp-content\/uploads\/2024\/08\/fictitious-transaction-of-the-testator-in-turkey-90x25.jpg 90w, https:\/\/www.cbhukuk.com\/wp-content\/uploads\/2024\/08\/fictitious-transaction-of-the-testator-in-turkey-120x33.jpg 120w, https:\/\/www.cbhukuk.com\/wp-content\/uploads\/2024\/08\/fictitious-transaction-of-the-testator-in-turkey.jpg 1800w\" sizes=\"(max-width: 800px) 100vw, 800px\" \/><\/a><\/h4>\n<h4 data-start=\"1577\" data-end=\"1657\"><span class=\"ez-toc-section\" id=\"d_Objective_and_Potentially_Unlimited_Liability_in_LLCs_for_Tax_Debts\"><\/span>d) <strong data-start=\"1584\" data-end=\"1655\">Objective and Potentially Unlimited Liability in LLCs for Tax Debts<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p data-start=\"1659\" data-end=\"1964\"><strong data-start=\"1659\" data-end=\"1706\">Shareholders and managing directors in LLCs<\/strong> are <strong data-start=\"1711\" data-end=\"1773\">liable for tax debts in proportion to their capital shares<\/strong> under <a href=\"https:\/\/www.cbhukuk.com\/en\/practice-areas\/business-law-in-turkey\/\"><strong data-start=\"1780\" data-end=\"1806\">Turkish Commercial Law<\/strong><\/a>. However, this arrangement <strong data-start=\"1834\" data-end=\"1883\">contradicts the fundamental principle of LLCs<\/strong>, since <strong data-start=\"1891\" data-end=\"1961\">shareholders are generally not personally liable for company debts<\/strong>.<\/p>\n<p data-start=\"1966\" data-end=\"2128\">Nevertheless, the <strong data-start=\"1984\" data-end=\"2064\">legislator has imposed this liability under Article 35 (bis) of Law No. 6183<\/strong> to <strong data-start=\"2068\" data-end=\"2125\">ensure the collection of public receivables in Turkey<\/strong>.<\/p>\n<p data-start=\"2130\" data-end=\"2418\">Within this framework, <strong data-start=\"2153\" data-end=\"2282\">the liability of LLC shareholders and managers for tax debts in Turkey is considered \u201cobjective liability\u201d (strict liability)<\/strong>. That is, <strong data-start=\"2293\" data-end=\"2415\">they are held responsible for the debt proportionally to their capital shares without any fault or personal wrongdoing<\/strong>.<\/p>\n<p data-start=\"2420\" data-end=\"2697\">However, <strong data-start=\"2429\" data-end=\"2468\">depending on the amount of the debt<\/strong>, this liability <strong data-start=\"2485\" data-end=\"2565\">may exceed the proportion of capital shares and effectively become unlimited<\/strong>. While this <strong data-start=\"2578\" data-end=\"2626\">secures the collection of public receivables<\/strong>, it also <strong data-start=\"2636\" data-end=\"2694\">poses a significant risk for shareholders and managers<\/strong>.<\/p>\n<h4 data-start=\"107\" data-end=\"216\"><span class=\"ez-toc-section\" id=\"e_Liability_of_Legal_Representatives_After_Term_of_Office_in_Limited_Liability_Companies_in_Turkey\"><\/span>e) <strong data-start=\"114\" data-end=\"214\">Liability of Legal Representatives After Term of Office in Limited Liability Companies in Turkey<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p data-start=\"218\" data-end=\"522\">In <strong data-start=\"221\" data-end=\"231\">Turkey<\/strong>, <strong data-start=\"233\" data-end=\"311\">legal representatives and senior executives of limited liability companies<\/strong> <strong data-start=\"312\" data-end=\"390\">continue to be liable for public debts arising during their term of office<\/strong>. <strong data-start=\"392\" data-end=\"519\">Stepping down from office does not relieve a manager or executive from liability for tax debts incurred during their tenure<\/strong>.<\/p>\n<p data-start=\"524\" data-end=\"749\">Therefore, even if their <strong data-start=\"549\" data-end=\"591\">managerial or executive role has ended<\/strong>, these individuals <strong data-start=\"611\" data-end=\"700\">remain legally responsible for public debts that arose during their period of service<\/strong>, including <strong data-start=\"712\" data-end=\"746\">tax liabilities of the company<\/strong>.<\/p>\n<h4 data-start=\"756\" data-end=\"817\"><span class=\"ez-toc-section\" id=\"f_Priority_in_Collection_of_Public_Debts_in_Turkey\"><\/span>f) <strong data-start=\"763\" data-end=\"815\">Priority in Collection of Public Debts in Turkey<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p data-start=\"819\" data-end=\"1205\">As emphasized by the <strong data-start=\"840\" data-end=\"871\">Council of State (Dan\u0131\u015ftay)<\/strong>, if <strong data-start=\"876\" data-end=\"928\">collection from the legal entity is not possible<\/strong>, the <strong data-start=\"934\" data-end=\"1041\">personal assets of managers, legal representatives, senior executives, and shareholders may be targeted<\/strong>. Although there is <strong data-start=\"1061\" data-end=\"1106\">no strict rule on the order of collection<\/strong>, the <strong data-start=\"1112\" data-end=\"1202\">legislator aims to enhance the effectiveness of public receivable collection in Turkey<\/strong>.<\/p>\n<p data-start=\"1207\" data-end=\"1653\">Under <strong data-start=\"1213\" data-end=\"1255\">tax liability rules for LLCs in Turkey<\/strong>, <strong data-start=\"1257\" data-end=\"1341\">shareholders and managers bear significant legal responsibility for public debts<\/strong>. <strong data-start=\"1343\" data-end=\"1413\">Managers are liable for debts incurred during their term of office<\/strong>, while <strong data-start=\"1421\" data-end=\"1486\">shareholders are liable in proportion to their capital shares<\/strong>. However, <strong data-start=\"1497\" data-end=\"1573\">depending on the amount of the debt, this liability can become unlimited<\/strong>, and <strong data-start=\"1579\" data-end=\"1650\">personal assets of shareholders may be used to satisfy public debts<\/strong>.<\/p>\n<p data-start=\"1655\" data-end=\"2088\">In the <strong data-start=\"1662\" data-end=\"1699\">collection of tax debts in Turkey<\/strong>, <strong data-start=\"1701\" data-end=\"1760\">collection must primarily be made from the legal entity<\/strong>. However, <strong data-start=\"1771\" data-end=\"1889\">debts that cannot be recovered from the company may also be pursued against shareholders and legal representatives<\/strong>. The <strong data-start=\"1895\" data-end=\"1933\">liability of legal representatives<\/strong>, pursuant to <strong data-start=\"1947\" data-end=\"1993\">Article 35 (bis) AATUHK and Article 10 VUK<\/strong>, <strong data-start=\"1995\" data-end=\"2027\">contains certain ambiguities<\/strong>, which have led to <strong data-start=\"2047\" data-end=\"2085\">various legal disputes in practice<\/strong>.<\/p>\n<h4 data-start=\"107\" data-end=\"209\"><span class=\"ez-toc-section\" id=\"g_Effect_of_Share_Transfer_on_Tax_Liability_in_Limited_Liability_Companies_LLCs_in_Turkey\"><\/span>g) <strong data-start=\"114\" data-end=\"207\">Effect of Share Transfer on Tax Liability in Limited Liability Companies (LLCs) in Turkey<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p data-start=\"211\" data-end=\"356\">In <strong data-start=\"214\" data-end=\"224\">Turkey<\/strong>, the <strong data-start=\"230\" data-end=\"275\">transfer of a partnership share in an LLC<\/strong> is regulated as a <strong data-start=\"294\" data-end=\"353\">legal act that directly affects liability for tax debts<\/strong>.<\/p>\n<p data-start=\"358\" data-end=\"630\">Pursuant to <strong data-start=\"370\" data-end=\"456\">Article 35\/2 of the Law on the Collection Procedure of Public Receivables (AATUHK)<\/strong> and <strong data-start=\"461\" data-end=\"506\">Article 10 of the Tax Procedure Law (VUK)<\/strong>, <strong data-start=\"508\" data-end=\"627\">both the transferor and the transferee shareholders are liable for the company\u2019s public debts from previous periods<\/strong>.<\/p>\n<p data-start=\"632\" data-end=\"808\">This regulation <strong data-start=\"648\" data-end=\"696\">ensures the collection of public receivables<\/strong> and <strong data-start=\"701\" data-end=\"805\">clearly establishes that the transfer of shares does not eliminate liability for tax debts in Turkey<\/strong>.<\/p>\n<h5 data-start=\"815\" data-end=\"865\"><span class=\"ez-toc-section\" id=\"1_Liability_for_Pre-Transfer_Tax_Debts_in_Turkey\"><\/span>1) <strong data-start=\"823\" data-end=\"863\">Liability for Pre-Transfer Tax Debts in Turkey<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h5>\n<p data-start=\"867\" data-end=\"1056\">Under <strong data-start=\"873\" data-end=\"896\">AATUHK Article 35\/2<\/strong>, <strong data-start=\"898\" data-end=\"1053\">both the transferor and transferee are jointly and severally liable for public debts arising before the transfer, in proportion to their capital shares<\/strong>.<\/p>\n<p data-start=\"1058\" data-end=\"1216\">Accordingly, <strong data-start=\"1071\" data-end=\"1130\">even if the transferor has completed the share transfer<\/strong>, they <strong data-start=\"1137\" data-end=\"1213\">remain liable in Turkey for tax debts arising prior to the transfer date<\/strong>.<\/p>\n<p data-start=\"1218\" data-end=\"1393\">This provision <strong data-start=\"1233\" data-end=\"1337\">clearly confirms that share transfers do not relieve parties of liability for prior-period tax debts<\/strong> and <strong data-start=\"1342\" data-end=\"1390\">ensures the collection of public receivables<\/strong>.<\/p>\n<h5 data-start=\"1400\" data-end=\"1460\"><span class=\"ez-toc-section\" id=\"2_Liability_of_the_Company_Manager_for_Tax_Debts_in_Turkey\"><\/span>2) <strong data-start=\"1408\" data-end=\"1458\">Liability of the Company Manager for Tax Debts in Turkey<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h5>\n<p data-start=\"1462\" data-end=\"1737\">Persons <strong data-start=\"1470\" data-end=\"1494\">liable for tax debts<\/strong> include not only the <strong data-start=\"1516\" data-end=\"1542\">transferor shareholder<\/strong> but also the <strong data-start=\"1556\" data-end=\"1575\">company manager<\/strong>. The <strong data-start=\"1581\" data-end=\"1607\">manager holding shares<\/strong> is subject to <strong data-start=\"1622\" data-end=\"1685\">both strict (objective) liability and fault-based liability<\/strong> under <strong data-start=\"1692\" data-end=\"1734\">AATUHK Article 35\/2 and VUK Article 10<\/strong>.<\/p>\n<ul>\n<li data-start=\"1741\" data-end=\"1898\"><strong data-start=\"1741\" data-end=\"1764\">AATUHK Article 35\/2<\/strong>: The <strong data-start=\"1770\" data-end=\"1801\">manager transferring shares<\/strong> is <strong data-start=\"1805\" data-end=\"1895\">strictly liable in proportion to the transferred share for debts related to that share<\/strong>.<\/li>\n<li data-start=\"1901\" data-end=\"2039\"><strong data-start=\"1901\" data-end=\"1919\">VUK Article 10<\/strong>: As <strong data-start=\"1924\" data-end=\"1943\">company manager<\/strong>, the individual bears <strong data-start=\"1966\" data-end=\"1991\">fault-based liability<\/strong> for <strong data-start=\"1996\" data-end=\"2036\">unpaid tax debts during their tenure<\/strong>.<\/li>\n<\/ul>\n<p data-start=\"2041\" data-end=\"2208\">This provision <strong data-start=\"2056\" data-end=\"2205\">makes it clear that a manager transferring shares is responsible for both pre-transfer debts and any liability arising from their managerial term<\/strong>.<\/p>\n<h5 data-start=\"2215\" data-end=\"2266\"><span class=\"ez-toc-section\" id=\"3_Liability_for_Post-Transfer_Tax_Debts_in_Turkey\"><\/span>3) <strong data-start=\"2223\" data-end=\"2264\">Liability for Post-Transfer Tax Debts in Turkey<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h5>\n<p data-start=\"2268\" data-end=\"2472\">For <strong data-start=\"2272\" data-end=\"2317\">tax debts arising after the transfer date<\/strong>, the <strong data-start=\"2323\" data-end=\"2354\">new shareholder and manager<\/strong> also <strong data-start=\"2360\" data-end=\"2385\">assume responsibility<\/strong>. This liability <strong data-start=\"2402\" data-end=\"2469\">continues under both AATUHK Article 35 (bis) and VUK Article 10<\/strong>.<\/p>\n<p data-start=\"2474\" data-end=\"2757\">Thus, the <strong data-start=\"2484\" data-end=\"2515\">new shareholder and manager<\/strong> are <strong data-start=\"2520\" data-end=\"2584\">subject to both strict (objective) and fault-based liability<\/strong> for debts associated with the shares they acquired. This regulation <strong data-start=\"2653\" data-end=\"2754\">ensures the collection of public receivables for debts arising after the share transfer in Turkey<\/strong>.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"DIFFERENCES_IN_LIABILITY_FOR_PUBLIC_DEBTS_IN_JOINT-STOCK_COMPANIES_AND_LIMITED_COMPANIES\"><\/span><strong>DIFFERENCES IN LIABILITY FOR PUBLIC DEBTS IN JOINT-STOCK COMPANIES AND LIMITED COMPANIES<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><strong>There is no difference in the liability of the directors for public debts in joint-stock and limited companies in Turkey<\/strong>. Directors are jointly and severally liable with the company for its public debts.<\/p>\n<table>\n<thead>\n<tr>\n<td><strong>Criteria<\/strong><\/td>\n<td><strong>Limited Company<\/strong><\/td>\n<td><strong>Joint-Stock Company<\/strong><\/td>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td><strong>Representation Body<\/strong><\/td>\n<td>Company Managers<\/td>\n<td>Board of Directors<\/td>\n<\/tr>\n<tr>\n<td><strong>Company\u2019s Liability<\/strong><\/td>\n<td>With all its assets<\/td>\n<td>With all its assets<\/td>\n<\/tr>\n<tr>\n<td><strong>Shareholders&#8217; Liability<\/strong><\/td>\n<td>\u2013 Shareholders&#8217; liability to third parties is limited to their subscribed capital.<br \/>\n\u2013 Other than public debts, shareholders are not liable for the company&#8217;s debts or creditors.<br \/>\n\u2013 At least one shareholder must be an unlimited authorized manager.<\/td>\n<td>\u2013 Shareholders are only liable to the company to the extent of their subscribed capital.<br \/>\n\u2013 Shareholders who are members of the Board of Directors (BoD) are liable for all public debts regardless of their shareholding.<br \/>\n\u2013 Shareholders who are not BoD members are not liable for public debts.<\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: left;\"><strong>Liability of Board Members\/Company Managers (According to Turkish Commercial Code)<\/strong><\/td>\n<td>\u2013 Managers are liable for damages caused to the company, shareholders, and creditors when they violate legal or contractual obligations.<\/td>\n<td>\u2013 Board members are liable for damages caused to the company, shareholders, and creditors when they violate legal or contractual obligations.<\/td>\n<\/tr>\n<tr>\n<td><strong>Public Debts Liability<\/strong><\/td>\n<td>\u2013 Public debts that cannot be collected from the company\u2019s assets are subject to the personal liability of the managers.<br \/>\n\u2013 If public debts cannot be collected, shareholders are directly liable in proportion to their capital shares.<\/td>\n<td>\u2013 Public debts that cannot be collected from the company\u2019s assets are subject to the personal liability of the legal representatives.<br \/>\n\u2013 BoD members and top executives are jointly and severally liable for public debts.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<h2 data-start=\"116\" data-end=\"183\"><a ref=\"magnificPopup\" href=\"https:\/\/www.cbhukuk.com\/wp-content\/uploads\/2024\/10\/sirketlerde-kanuni-temsilcinin-vergi-borcundan-sorumlulugu.jpg\"><img decoding=\"async\" class=\"aligncenter wp-image-7524 size-us_800_400\" src=\"https:\/\/www.cbhukuk.com\/wp-content\/uploads\/2024\/10\/sirketlerde-kanuni-temsilcinin-vergi-borcundan-sorumlulugu-800x248.jpg\" alt=\"the tax liability of managers of companies in Turkey\" width=\"800\" height=\"248\" srcset=\"https:\/\/www.cbhukuk.com\/wp-content\/uploads\/2024\/10\/sirketlerde-kanuni-temsilcinin-vergi-borcundan-sorumlulugu-800x248.jpg 800w, https:\/\/www.cbhukuk.com\/wp-content\/uploads\/2024\/10\/sirketlerde-kanuni-temsilcinin-vergi-borcundan-sorumlulugu-300x93.jpg 300w, https:\/\/www.cbhukuk.com\/wp-content\/uploads\/2024\/10\/sirketlerde-kanuni-temsilcinin-vergi-borcundan-sorumlulugu-1024x317.jpg 1024w, https:\/\/www.cbhukuk.com\/wp-content\/uploads\/2024\/10\/sirketlerde-kanuni-temsilcinin-vergi-borcundan-sorumlulugu-100x31.jpg 100w, https:\/\/www.cbhukuk.com\/wp-content\/uploads\/2024\/10\/sirketlerde-kanuni-temsilcinin-vergi-borcundan-sorumlulugu-90x28.jpg 90w, https:\/\/www.cbhukuk.com\/wp-content\/uploads\/2024\/10\/sirketlerde-kanuni-temsilcinin-vergi-borcundan-sorumlulugu-120x37.jpg 120w, https:\/\/www.cbhukuk.com\/wp-content\/uploads\/2024\/10\/sirketlerde-kanuni-temsilcinin-vergi-borcundan-sorumlulugu.jpg 1800w\" sizes=\"(max-width: 800px) 100vw, 800px\" \/><\/a><\/h2>\n<h2 data-start=\"116\" data-end=\"183\"><span class=\"ez-toc-section\" id=\"WHAT_HAPPENS_IF_CORPORATE_TAX_DEBT_IS_NOT_PAID_IN_TURKEY\"><\/span>WHAT HAPPENS IF CORPORATE TAX DEBT IS NOT PAID IN TURKEY?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p data-start=\"185\" data-end=\"619\">In <strong data-start=\"188\" data-end=\"198\">Turkey<\/strong>, the <strong data-start=\"204\" data-end=\"240\">failure to pay tax debts on time<\/strong> by <strong data-start=\"244\" data-end=\"308\">limited liability companies (LLCs) and joint-stock companies<\/strong> exposes <strong data-start=\"317\" data-end=\"404\">not only the company but also its legal representatives, managers, and shareholders<\/strong> to <strong data-start=\"408\" data-end=\"451\">serious financial and legal liabilities<\/strong>. This situation is based on the principles of <strong data-start=\"498\" data-end=\"529\">joint and several liability<\/strong> and <strong data-start=\"534\" data-end=\"554\">strict liability<\/strong> under both <strong data-start=\"566\" data-end=\"593\">AATUHK Article 35 (bis)<\/strong> and <strong data-start=\"598\" data-end=\"616\">VUK Article 10<\/strong>.<\/p>\n<h3 data-start=\"626\" data-end=\"676\"><span class=\"ez-toc-section\" id=\"1_Collection_from_the_Companys_Assets\"><\/span><strong data-start=\"631\" data-end=\"674\">1. Collection from the Company\u2019s Assets<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p data-start=\"678\" data-end=\"764\"><strong data-start=\"66\" data-end=\"140\">Tax offices primarily resort to the company\u2019s assets for unpaid debts.<\/strong> In this context, the collection of the debt is carried out through <strong data-start=\"208\" data-end=\"287\">the company\u2019s bank accounts, real estate, movable property, and receivables<\/strong>. <a href=\"https:\/\/www.cbhukuk.com\/en\/foreigners-buying-property-in-turkey\/\"><strong data-start=\"289\" data-end=\"342\">Real estate located in Turkey owned by foreigners<\/strong><\/a> is also included in this process. However, <strong data-start=\"386\" data-end=\"556\">if the company\u2019s assets are insufficient to cover the entire debt, collection is directed to the personal assets of legal representatives, managers, and shareholders.<\/strong><\/p>\n<h3 data-start=\"1111\" data-end=\"1187\"><span class=\"ez-toc-section\" id=\"2_Liability_of_Legal_Representatives_Managers_and_Shareholders\"><\/span><strong data-start=\"1116\" data-end=\"1185\">2. Liability of Legal Representatives, Managers, and Shareholders<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p data-start=\"1189\" data-end=\"1280\">Unpaid tax debts give rise to <strong data-start=\"1219\" data-end=\"1250\">joint and several liability<\/strong> of the responsible persons:<\/p>\n<ul>\n<li data-start=\"1284\" data-end=\"1407\"><strong data-start=\"1284\" data-end=\"1322\">Legal representatives and managers<\/strong> are <strong data-start=\"1327\" data-end=\"1404\">liable for debts incurred during their tenure under fault-based liability<\/strong>;<\/li>\n<li data-start=\"1410\" data-end=\"1486\"><strong data-start=\"1410\" data-end=\"1426\">Shareholders<\/strong> are <strong data-start=\"1431\" data-end=\"1483\">strictly liable according to their capital share<\/strong>.<\/li>\n<\/ul>\n<p data-start=\"1488\" data-end=\"1626\">This means that <strong data-start=\"1504\" data-end=\"1556\">if the debt cannot be collected from the company<\/strong>, <strong data-start=\"1558\" data-end=\"1623\">personal assets of the responsible individuals may be pursued<\/strong>.<\/p>\n<h3 data-start=\"1633\" data-end=\"1698\"><span class=\"ez-toc-section\" id=\"3_Late_Payment_Penalties_and_Administrative_Sanctions\"><\/span><strong data-start=\"1638\" data-end=\"1696\">3. Late Payment Penalties and Administrative Sanctions<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p data-start=\"1700\" data-end=\"1742\"><strong data-start=\"63\" data-end=\"186\">In Turkey, if the tax debt is not paid, late interest, delay penalties, and administrative fines are added to the debt.<\/strong> This situation causes the debt to <strong data-start=\"221\" data-end=\"257\">increase exponentially over time<\/strong> and makes its collection more difficult. In addition, <strong data-start=\"312\" data-end=\"378\">administrative sanctions that may be imposed by the tax office<\/strong> can directly affect the company\u2019s operations.<\/p>\n<h3 data-start=\"1990\" data-end=\"2037\"><span class=\"ez-toc-section\" id=\"4_Legal_Proceedings_and_Enforcement\"><\/span><strong data-start=\"1995\" data-end=\"2035\">4. Legal Proceedings and Enforcement<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p data-start=\"2039\" data-end=\"2122\">For unpaid debts, <strong data-start=\"2057\" data-end=\"2108\">tax offices may initiate <a href=\"https:\/\/www.cbhukuk.com\/en\/practice-areas\/debt-enforcement-in-turkey\/\">enforcement procedures in Turkey<\/a><\/strong>, including:<\/p>\n<ul>\n<li data-start=\"2126\" data-end=\"2162\"><strong data-start=\"2126\" data-end=\"2160\">Freezing company bank accounts<\/strong><\/li>\n<li data-start=\"2165\" data-end=\"2209\"><strong data-start=\"2165\" data-end=\"2207\">Seizing <a href=\"https:\/\/www.cbhukuk.com\/en\/practice-areas\/real-estate-law-in-turkey\/\">real estate<\/a> and movable assets<\/strong><\/li>\n<li data-start=\"2212\" data-end=\"2308\"><strong data-start=\"2212\" data-end=\"2306\">Extending collection to personal assets of legal representatives and managers if necessary<\/strong><\/li>\n<\/ul>\n<h3 data-start=\"2315\" data-end=\"2345\"><span class=\"ez-toc-section\" id=\"5_Tax_Loss_Penalty\"><\/span><strong data-start=\"2320\" data-end=\"2343\">5. Tax Loss Penalty<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p data-start=\"2347\" data-end=\"2585\">Under <strong data-start=\"2353\" data-end=\"2387\">VUK Articles 359 and following<\/strong>, if <strong data-start=\"2392\" data-end=\"2443\">taxes are underreported or incorrectly declared<\/strong>, a <strong data-start=\"2447\" data-end=\"2467\">tax loss penalty<\/strong> applies <strong data-start=\"2476\" data-end=\"2500\">on the unpaid amount<\/strong>. This penalty <strong data-start=\"2515\" data-end=\"2582\">affects both the company and its legal representatives\/managers<\/strong>.<\/p>\n<h3 data-start=\"2592\" data-end=\"2626\"><span class=\"ez-toc-section\" id=\"6_Criminal_Proceedings\"><\/span><strong data-start=\"2597\" data-end=\"2624\">6. Criminal Proceedings<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p data-start=\"91\" data-end=\"449\"><strong data-start=\"91\" data-end=\"194\">Due to tax evasion or other tax offenses, the tax authority may initiate a criminal case in Turkey.<\/strong> These cases are conducted before the <strong data-start=\"232\" data-end=\"274\">tax courts or the high criminal courts<\/strong> and determine criminal liability. <strong data-start=\"309\" data-end=\"447\">Legal representatives and managers bear individual criminal responsibility for tax offenses that occurred during their term of office.<\/strong><\/p>\n<p data-start=\"451\" data-end=\"819\"><strong data-start=\"451\" data-end=\"622\">Non-payment of tax debt in Turkey exposes not only the company but also its legal representatives, managers, and shareholders to significant financial and legal risks.<\/strong> Therefore, obtaining <strong data-start=\"644\" data-end=\"760\">detailed <a href=\"https:\/\/www.cbhukuk.com\/en\/online-legal-services\/\">legal counsel in Turkey<\/a> regarding the company\u2019s tax debt liability, collection mechanisms, and legal consequences<\/strong> is <strong data-start=\"764\" data-end=\"817\">critically important to minimize potential risks.<\/strong><\/p>\n<h2 data-start=\"2903\" data-end=\"2990\"><span class=\"ez-toc-section\" id=\"DO_LEGAL_REPRESENTATIVES_HAVE_THE_RIGHT_TO_OBJECT_TO_TAX_LIABILITY_IN_TURKEY\"><\/span>DO LEGAL REPRESENTATIVES HAVE THE RIGHT TO OBJECT TO TAX LIABILITY IN TURKEY?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p data-start=\"2992\" data-end=\"3199\"><strong>For<\/strong> <a href=\"https:\/\/www.cbhukuk.com\/en\/company-types-in-turkey\/\"><strong data-start=\"2996\" data-end=\"3022\">corporations in Turkey<\/strong><\/a>, <strong data-start=\"3024\" data-end=\"3079\">tax debts that cannot be collected from the company<\/strong> may be <strong data-start=\"3087\" data-end=\"3196\">directed to the personal assets of legal representatives under AATUHK Article 35 (bis) and VUK Article 10<\/strong>.<\/p>\n<p data-start=\"3201\" data-end=\"3303\">However, <strong data-start=\"3210\" data-end=\"3300\">this does not eliminate the legal representatives\u2019 right to object to such liabilities<\/strong>.<\/p>\n<h3 data-start=\"3310\" data-end=\"3349\"><span class=\"ez-toc-section\" id=\"1_Legal_Basis_for_Objection\"><\/span><strong data-start=\"3315\" data-end=\"3347\">1. Legal Basis for Objection<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p data-start=\"59\" data-end=\"446\"><strong data-start=\"59\" data-end=\"155\">Legal representatives may file an objection in Turkey against payment orders issued to them.<\/strong> It should be emphasized that <strong data-start=\"185\" data-end=\"283\">objections to payment orders directed at legal representatives are not made to the tax office.<\/strong> For the objection to be legally valid, <strong data-start=\"323\" data-end=\"444\">a lawsuit must be filed at the relevant tax court in Turkey within 7 days from the notification of the payment order.<\/strong><\/p>\n<p data-start=\"448\" data-end=\"664\"><strong data-start=\"448\" data-end=\"552\">Applications, objections, or petitions submitted to the tax office in Turkey have no legal validity.<\/strong> Therefore, <strong data-start=\"564\" data-end=\"662\">to preserve the right to object, it is mandatory to <a href=\"https:\/\/www.cbhukuk.com\/en\/practice-areas\/file-a-lawsuit-in-turkey\/\">file a lawsuit<\/a> in the tax court in Turkey.<\/strong><\/p>\n<p data-start=\"3591\" data-end=\"3633\"><strong data-start=\"3591\" data-end=\"3631\">Valid grounds for objection include:<\/strong><\/p>\n<ul>\n<li data-start=\"3637\" data-end=\"3691\">The <strong data-start=\"3641\" data-end=\"3689\">debt does not exist or has already been paid<\/strong><\/li>\n<li data-start=\"3694\" data-end=\"3723\">The <strong data-start=\"3698\" data-end=\"3721\">debt is time-barred<\/strong><\/li>\n<li data-start=\"3726\" data-end=\"3849\">The individual <strong data-start=\"3741\" data-end=\"3795\">does not hold the position of legal representative<\/strong> or <strong data-start=\"3799\" data-end=\"3847\">was not in office during the relevant period<\/strong><\/li>\n<li data-start=\"3852\" data-end=\"3941\"><strong data-start=\"3852\" data-end=\"3878\">No negligence or fault<\/strong> of the legal representative or senior manager in non-payment<\/li>\n<\/ul>\n<h3 data-start=\"3948\" data-end=\"4004\"><span class=\"ez-toc-section\" id=\"2_Examination_of_Legal_Representative_Status\"><\/span><strong data-start=\"3953\" data-end=\"4002\">2. Examination of Legal Representative Status<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p data-start=\"4006\" data-end=\"4173\">According to <strong data-start=\"4019\" data-end=\"4089\">Supreme Court (Yarg\u0131tay) and Council of State (Dan\u0131\u015ftay) decisions<\/strong>, <strong data-start=\"4091\" data-end=\"4170\">liability requires that the person has representation and binding authority<\/strong>. For example, <strong data-start=\"4188\" data-end=\"4290\">an individual with only secondary signature authority may not be considered a legal representative<\/strong>. Furthermore, liability arises <strong data-start=\"4325\" data-end=\"4377\">only if non-payment involves negligence or fault<\/strong>; <strong data-start=\"4379\" data-end=\"4427\">mere holding of the position is insufficient<\/strong>. In the event of a potential dispute, obtaining the support of <a href=\"https:\/\/www.cbhukuk.com\/en\/commercial-lawyer-in-turkey\/\"><strong>a commercial law attorney in Turkey<\/strong><\/a> to clearly define the duties of the statutory representative would be beneficial.<\/p>\n<h3 data-start=\"4437\" data-end=\"4493\"><span class=\"ez-toc-section\" id=\"3_Consequences_of_Objecting_to_Tax_Liability\"><\/span><strong data-start=\"4442\" data-end=\"4491\">3. Consequences of Objecting to Tax Liability<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p data-start=\"4495\" data-end=\"4553\">Objections filed by legal representatives can result in:<\/p>\n<ul>\n<li data-start=\"4557\" data-end=\"4633\"><strong data-start=\"4557\" data-end=\"4585\">Suspension of collection<\/strong> (if the court grants a precautionary measure)<\/li>\n<li data-start=\"4636\" data-end=\"4770\"><strong data-start=\"4636\" data-end=\"4651\">Exoneration<\/strong>, if it is proven that the debt does not pertain to the company\/period or that the representative acted without fault<\/li>\n<\/ul>\n<p data-start=\"4772\" data-end=\"4917\">The <strong data-start=\"4776\" data-end=\"4851\">right of objection protects the legal representatives\u2019 right to defense<\/strong> and <strong data-start=\"4856\" data-end=\"4914\">prevents arbitrary application of tax authority powers<\/strong>. In particular, the requirement of <strong data-start=\"4953\" data-end=\"4976\">fault or negligence<\/strong> ensures that <strong data-start=\"4990\" data-end=\"5093\">legal representatives are not automatically held personally liable solely by virtue of their office<\/strong>.<\/p>\n<\/div><\/div><\/div><\/div><\/div><\/div><\/section><section class=\"l-section wpb_row height_auto\"><div class=\"l-section-h i-cf\"><div class=\"g-cols vc_row via_grid cols_1 laptops-cols_inherit tablets-cols_inherit mobiles-cols_1 valign_top type_default stacking_default\"><div class=\"wpb_column vc_column_container\"><div class=\"vc_column-inner\"><div class=\"w-html\"><div class=\"cb-legal-box\">\n    <div class=\"cb-legal-inner\">\n        <p class=\"cb-legal-text\">\n            You can explore our other <a href=\"https:\/\/www.cbhukuk.com\/en\/blog\/\" class=\"cb-legal-link\">articles<\/a> or contact us for your legal support inquiries.\n        <\/p>\n        <div class=\"cb-legal-action\">\n            <a href=\"https:\/\/www.cbhukuk.com\/en\/contact-us\/\" class=\"cb-legal-btn\">Contact Us<\/a>\n        <\/div>\n    <\/div>\n<\/div>\n\n<style>\n.cb-legal-box {\n    background: #ffffff;\n    border: 2px solid #8b3516; \n    border-radius: 8px;\n    padding: 30px;\n    margin: 30px auto;\n    width: 100%;\n    box-sizing: border-box;\n    font-family: Arial, Helvetica, sans-serif;\n    box-shadow: 0 4px 15px rgba(0, 0, 0, 0.05);\n}\n\n.cb-legal-inner {\n    display: flex;\n    align-items: center;\n    justify-content: space-between;\n    gap: 30px;\n}\n\n.cb-legal-text {\n    margin: 0;\n    font-size: 19px;\n    color: #333333;\n    line-height: 1.5;\n    flex: 2;\n}\n\n.cb-legal-link {\n    color: #8b3516;\n    text-decoration: underline;\n    font-weight: bold;\n}\n\n.cb-legal-action {\n    flex: 1;\n    text-align: right;\n}\n\n.cb-legal-btn {\n    display: inline-block;\n    background-color: #8b3516;\n    color: #ffffff !important;\n    padding: 14px 28px;\n    border-radius: 5px;\n    text-decoration: none !important;\n    font-weight: bold;\n    font-size: 16px;\n    transition: all 0.3s ease;\n    border: 2px solid #8b3516;\n    white-space: nowrap;\n}\n\n.cb-legal-btn:hover {\n    background-color: #000000;\n    border-color: #000000;\n}\n\n\/* MOB\u0130LDEK\u0130 G\u00d6R\u00dcNT\u00dcY\u00dc D\u00dcZELTEN KISIM *\/\n@media (max-width: 768px) {\n    .cb-legal-box {\n        padding: 20px 15px; \/* Yan bo\u015fluklar\u0131 azaltt\u0131k *\/\n        margin: 20px 0;\n        width: 100% !important;\n    }\n    \n    .cb-legal-inner {\n        flex-direction: column !important;\n        gap: 15px; \/* Yaz\u0131 ve buton aras\u0131ndaki bo\u015flu\u011fu daraltt\u0131k *\/\n    }\n    \n    .cb-legal-text {\n        font-size: 16px; \/* Yaz\u0131y\u0131 mobilde bir t\u0131k k\u00fc\u00e7\u00fcltt\u00fck ki s\u0131\u011fs\u0131n *\/\n        text-align: center !important;\n        width: 100%;\n    }\n    \n    .cb-legal-action {\n        width: 100%;\n        text-align: center !important;\n    }\n    \n    .cb-legal-btn {\n        width: 80%; \/* Butonun ekran\u0131 komple bo\u011fmas\u0131n\u0131 engellemek i\u00e7in %80 yapt\u0131k *\/\n        padding: 12px 20px;\n        font-size: 15px;\n        display: inline-block; \/* Block yerine inline-block + %80 daha zarif durur *\/\n    }\n}\n<\/style><\/div><\/div><\/div><\/div><\/div><\/section><section class=\"l-section wpb_row us_custom_0a0f4a9a height_auto\"><div class=\"l-section-h i-cf\"><div class=\"g-cols vc_row via_grid cols_1 laptops-cols_inherit tablets-cols_inherit mobiles-cols_1 valign_top type_default stacking_default\"><div class=\"wpb_column vc_column_container\"><div class=\"vc_column-inner\"><div class=\"wpb_text_column us_custom_275474cc has_text_color\"><div class=\"wpb_wrapper\"><p><strong>LEGAL DISCLAIMER:<\/strong> The copyright of the articles and content on our website belongs to Av. Orbay \u00c7okg\u00f6r, and all articles are published with electronically signed time stamps to establish ownership. If any articles on our website are copied or summarized without providing a source link and published on other websites, legal and criminal proceedings will be initiated.<\/p>\n<\/div><\/div><\/div><\/div><\/div><\/div><\/section>\n","protected":false},"excerpt":{"rendered":"Index Toggle TAX RESPONSIBILITIES OF COMPANIES IN TURKEYWho is a Taxpayer in Turkey?Who is a Tax Responsible Person in Turkey?What is the Scope of Tax Responsibility in Turkey?TAX LIABILITY OF LEGAL REPRESENTATIVES OF COMPANIES IN TURKEYTax Liability of Joint Stock Companies in Turkeya) Personal Liability of Legal Representatives for Tax Debts in Joint Stock Companies...","protected":false},"author":1,"featured_media":5457,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_joinchat":[],"footnotes":""},"categories":[85],"tags":[],"class_list":["post-5461","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog"],"_links":{"self":[{"href":"https:\/\/www.cbhukuk.com\/en\/wp-json\/wp\/v2\/posts\/5461","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.cbhukuk.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.cbhukuk.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.cbhukuk.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.cbhukuk.com\/en\/wp-json\/wp\/v2\/comments?post=5461"}],"version-history":[{"count":0,"href":"https:\/\/www.cbhukuk.com\/en\/wp-json\/wp\/v2\/posts\/5461\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.cbhukuk.com\/en\/wp-json\/wp\/v2\/media\/5457"}],"wp:attachment":[{"href":"https:\/\/www.cbhukuk.com\/en\/wp-json\/wp\/v2\/media?parent=5461"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.cbhukuk.com\/en\/wp-json\/wp\/v2\/categories?post=5461"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.cbhukuk.com\/en\/wp-json\/wp\/v2\/tags?post=5461"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}