317 TAX LAW The View of The Ministry of Treasury and Finance Within the scope of recently increased tax inspections, in cases where the capital commitment payable is not fulfilled by the shareholders, the following criticisms are often made by tax inspectors: (i) companies provide financial services to the shareholders by making use of its resources, (ii) shareholders use the company’s money without interest, (iii) the company’s earnings are fully or partially transferred through transfer pricing and (iv) although interest income should be calculated in return for the financing service regarding the unpaid capital amount, this is not done. Within the scope of these criticisms; The Ministry of Treasury and Finance accepts that the shareholders of the company, who do not fulfill their capital commitment payable within the legal period, are using borrowed money from the company. The Ministry has requested that interest should be calculated with the adat method, and temporary tax and corporate tax must be paid on this interest amount. In addition, an 18% value added tax must also be calculated by the company in addition to the calculated interest. Finally, companies are also faced with a special irregularity penalty if they do not issue an invoice for the adat interest. On the other hand; since the companies are deemed to have distributed dividends as of the last day of the year in which the disguised profit distribution is accepted, a 15% withholding tax and tax loss penalty (for shareholders who are not subject to exemption within the scope of Article 5-1/a of the CTL) are requested on this dividend by the Ministry of Treasury and Finance. In addition, if half of the profit assumed to be distributed exceeds the limits specified in the law, a declaration obligation arises for the real person shareholders. Related Judicial Decisions Unlike the Ministry of Treasury and Finance, the judiciary does not consider the shareholder’s failure to fulfill its capital commitment payable as the shareholder’s use of debt from the company and does not evaluate the situation within the scope of transfer pricing. In summary, the following matters are emphasized in the judicial decisions on the subject:
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