Analysis and evaluation of individual pension system in terms of taxation

In our era, Individual Retirement System constitutes one of the most significant steps of the social security systems and has become an effective actor of social security and financial systems mainly in the United States, European Union, and in most of the countries of the world. By recognizing the positive donations of the system to the social and economical life such as its positive effects on deployment and investment, developed and developing countries have sought after to increase these contributions via various tax encouragements.The process of the Individual Retirement System that has started to be implemented formally in Turkey since 2001 via the code no 4632, has executed a rapid development with its contractors and foundations undertaking the function of supervision. The system that has become to be a noteworthy sector has given the signals of providing the social security system with essential evolutions.In Turkey, the potentials included by this system have brought some encouragements comprising the employers, employees, and insurance companies. Via the code no 4697 that is regarding to make changes in some codes, tax encouragements have been brought heading for mensal and lump sums that will be paid to the employees and employers paying premium and subscription, taxpayers giving the annual tax returns, and the ones attained the retirement warrant.The improvement of the system and its being widespread to a greater extent as it is in the applications of the developed countries will be able to be possible by reorganizing the scope of tax encouragements and redefinition of some concepts. Since the socio-economic benefits of the system are great, they require considering the essentiality of encouraging both individual donors and companies.