NEWSLETTER-2017

364 NEWSLETTER 2017 essential elements of economic enterprises 12 . Therefore, an economic enterprise of a foundation, aiming to obtain an income is required to maintain its operations continuously and independently. Otherwise, it would not be possible to make reference to an economic enterprise that belongs to the foundation. The Legal Consequences of Operating Economic Enterprises by Foundations Merchant Status of the Foundations Pursuant to Art. 16 of the TCC the foundations that operate an economic enterprise in order to actualize their objectives are consid- ered as merchant. However, it is important to note that, as per the same provision, the foundation that uses more than half of its income to the tasks that are qualified as public service are not deemed as merchants whether they operate the enterprise directly or through a legal per- son who is operated and directed according to public law provisions. This issue is crucial as it constitutes a determinant point on deciding whether the legal consequences of being a merchant are applied to the foundations or not. Whereas foundations may be considered as merchant by way of operating economic enterprises that have legal personality; they can also be a shareholder in a corporation and gener- ate income for their objectives 13 . The Economic Enterprises of Foundations’ Being Subject to Corporation Tax As per Art. 1 of the Corporation Tax Law No. 5520, the economic enterprises of foundations are specified as the institutions being sub- ject to corporation tax as well. In this respect, it is beneficial to note that it is the economic enterprise which is the tax payer and not the foundation. Accordingly, the legislator has prevented foundations to generate income without paying any taxes and the tax equity has been ensured with regard to other enterprises. This issue has also been elaborated considering the status of the associations that manage eco- 12 Aydın, Erkan, p. 37-41. 13 Aydın, Erkan, p. 45.