348 NEWSLETTER 2021 The Council of State’s Decision on Notice Payments Under a Mutual Rescission Agreement* Sevgi Ünsal Özden Introduction The decision of the Council of State Board of Tax Law Chambers, dated 27.01.2021 and numbered 2020/17 E. 2021/2 K. (“Decision”) given upon the request to resolve the conflict between different Regional Administrative Courts was published in the Official Gazette dated 09.09.2021 and numbered 31593. In this article, the legal context of the Decision, the court’s reasoning, and its assessments will be analyzed. Request to Resolve a Conflict Between Regional Administrative Courts The board of Presidents of the Ankara Regional Administrative Court through its decision dated 10.07.2020 and numbered 2020/63 E. 2020/63 K., approved the claim of the applicant and the request to resolve the disagreement between decisions of Regional Administrative Courts of different jurisdiction areas regarding the issue “whether the payment in lieu of notice made to the employee under a mutual rescission agreement will be considered as a salary and thus, will be subjected to the income tax.” Going through the relevant statutory provisions may be helpful before proceeding with the analysis of the facts and reasoning of the Decision. Applicable Legislation As defined in Article 32 of the Labor Law numbered 4857 (“Labor Law”) a salary is the amount of money to be paid in cash by an employer or a third party to a person in return for a service. Article 17 contains rules and regulations with regard to the payment in lieu of * Article of September, 2021
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