Taxation of participation banking and services

Participation banks, which reinforce their positions in terms of the increasing numbers and services provided within the Turkish Banking System, are expected to have a say in the future as being among the most important actors of the financial sector. The taxation of the participation banks was taxed with the laws and administrative regulations covered by the taxes on income and expenditure, especially the regulations issued under the name of Private Finance Institutions in the years when they started to be established. However, these regulations caused some problems and limitations due to the fact that institutions operate their activities according to the principle of freeness of interest. With the increasing economic structure of our country and the increase in the number of Participation Banks, these institutions have been subject to law number 5411 in order to keep them apart from other banks and to prevent taxation problems arising from their own operations. In addition, the problems experienced in taxation with the changes made in corporate tax, income tax, bank and insurance turn-over taxes and other related tax laws have been tried to be solved. As of today, participation banks are subject to all legal and administrative regulations, as other banks are subject to, regardless of any difference. In the current study, the taxation of the participation banks and the taxes they are subject to as both responsible and obliged are examined. In addition, some current issues related to the noninterest-bearing note instrument specific to the participation banks and other issues related to taxation are explained in detail.