Turkey

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Overall Phase 2 Rating is Partially Compliant

Table of Determinations and Ratings of the Combined Review

Jurisdictions should ensure that ownership and identity information for all relevant entities and arrangements is available to their competent authorities. (ToR A.1)
Determination Factors Recommendations
The element is not in place.   Joint stock companies are allowed to issue bearer shares. The Central Registry Agency maintains information on all shares, including bearer shares, issued by publicly held joint stock companies whose shares are traded on the stock exchange. However, there are insufficient mechanisms in place that ensure the availability of information allowing for identification of owners of bearer shares issued by other joint stock companies.  Turkey should take necessary measure to ensure that appropriate mechanisms are in place to identify owners of bearer shares in all instances. 
Phase 2 Rating Factors Recommendations
Non-Compliant.     
Jurisdictions should ensure that reliable accounting records are kept for all relevant entities and arrangements. (ToR A.2)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Compliant.     
Banking information should be available for all account-holders. (ToR A.3)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Compliant.     
Competent authorities should have the power to obtain and provide information that is the subject of a request under an exchange of information arrangement from any person within their territorial jurisdiction who is in possession or control of such information (irrespective of any legal obligation on such person to maintain the secrecy of the information). (ToR B.1)
Determination Factors Recommendations
The element is in place, but certain aspects of the legal implementation of the element need improvement.   Legal provisions enabling tax authorities to gather information for exchange of information purposes are not clearly provided in Turkish Law  It is recommended that Turkey establishes clear legal mechanisms empowering its authorities to obtain information for EOI purposes. 
The scope of professional privilege in tax matters is broader and extends beyond that provided for in the international standards.  It is recommended that Turkey ensures that the scope of attorney-client privileges afforded to professionals in tax matters is consistent with the international standard. 
Phase 2 Rating Factors Recommendations
Partially Compliant.  In most of the cases, tax audits are conducted to obtain the required information to meet the information requests from the foreign competent authorities. Information is generally not provided until the tax audit is complete which on an average takes 12 months. Tax auditors do not give priority to EOI requests. This process unduly delays effective exchange of information.  The entire process of obtaining information for EOI purposes should be reviewed with a view to ensuring that it is compatible with the effective international exchange of information in tax matters. 
The rights and safeguards (e.g. notification, appeal rights) that apply to persons in the requested jurisdiction should be compatible with effective exchange of information. (ToR B.2)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Compliant.     
Exchange of information mechanisms should provide for effective exchange of information. (ToR C.1)
Determination Factors Recommendations
The element is in place, but certain aspects of the legal implementation of the element need improvement.   Legal provisions enabling tax authorities to gather information for exchange of information purposes are not clearly provided in Turkish Law.  It is recommended that Turkey clarify its laws to ensure that its competent authorities have the necessary powers to obtain information for EOI purposes. 
The ratification of EOI mechanisms takes on average about two years.  Turkey should ensure that it takes all internal steps to bring all its EOI mechanisms into force expeditiously. 
Phase 2 Rating Factors Recommendations
Largely Compliant.     
The jurisdictions' network of information exchange mechanisms should cover all relevant partners. (ToR C.2)
Determination Factors Recommendations
The element is in place.     Turkey should continue to develop its EOI network with all relevant partners. 
Phase 2 Rating Factors Recommendations
Compliant.     
The jurisdictions' mechanisms for exchange of information should have adequate provisions to ensure the confidentiality of information received. (ToR C.3)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Compliant.     
The exchange of information mechanisms should respect the rights and safeguards of taxpayers and third parties. (ToR C.4)
Determination Factors Recommendations
The element is in place, but certain aspects of the legal implementation of the element need improvement.   The scope of professional privilege in tax matters is broader and extends beyond that provided for in the international standards.  It is recommended that Turkey ensures that scope of attorney-client privileges afforded to professionals in tax matters is consistent with the international standard. 
Phase 2 Rating Factors Recommendations
Largely Compliant.     
The jurisdiction should provide information under its network of agreements in a timely manner. (ToR C.5)
Determination Factors Recommendations
The assessment team is not in a position to evaluate whether this element is in place, as it involves issues of practice that are dealt with in the Phase 2 review.      
Phase 2 Rating Factors Recommendations
Partially Compliant.  In most cases, Turkey is not able to respond within 90 days to international requests for information in tax matters and does not commonly provide requesting parties with status updates.  Turkey should ensure that its authorities establish appropriate internal procedures to be able to respond to EOI requests in a timely manner, by providing the information requested within 90 days of receipt of the request, or if it has been unable to do so, to provide a status update. 
In most cases, tax audits are conducted to obtain the information requested by foreign competent authorities, which takes about one year before it reaches the EOI Section.  Turkey should ensure that it finds appropriate mechanisms to obtain information from the information holder without procedural delays so it is able to respond to information requests in a timely manner. 

Earlier self-assessment based annual reports entitled Tax Co-operation 2010: Towards a Level Playing Field are also available.