Nov 07 2017

Tax havens are Turkey's hell - Toker

All that Turkey needs was a list of countries that would be considered "tax havens" so that the money transfers of Turkish citizens and companies to those offshore accounts could be taxed by 30 percent.

Cumhuriyet columnist Çiğdem Toker said Turkey had passed a new Corporate Tax Law in 2006 that defined what is known as a "tax haven" — a country or a jurisdiction which offers favourable tax conditions to individuals and companies to attract them register their businesses.

But the Turkish governments has not issued a list of countries, practically making the 'tax haven' clause unenforceable.

In the case of Malta, the favourable conditions play out as tax refunds: While all companies are taxed at 35 percent of their money transfers to accounts in Malta, when their shareholders do not reside in the island country, or do business outside of the Mediterranean islands, they can demand up to 80 percent tax refunds, making the actual tax paid as low as 5 percent. In other countries they do business in, such as Turkey or Sweden, the companies declare the 35 percent and not the refunds, enjoying protections against double taxation.

Toker said it is now impossible to know the amount of tax evaded by Turkish companies via transactions over offshore accounts for the last 12 years. But by not declaring the list of tax havens, Turkish government has chosen its rich business allies over the people, she said.

It is all the much more striking that the Turkish Parliament is due to pass a law to increase taxes over domestic consumption, today.

Read Çiğdem Toker's column in Turkish here: