The taxation of financial derivate instruments and Turkey example

There were a lot of economical ewents have been lived after the second World war. One and most of these economical event is the finishing of Bretton Woods system. This system was a riskless system. After the Bretton Woods system had being lived a lot of and new rate and financial risks. These risks had created a lot of risk management systems and enstrumants. Since the beginning of the 1980's economic agents, firms and markets have faced a lot of financial risks more than ever due to highly volatılıtıe interest and exchange rates caused by certain factors such as liberalisation and deregulation activities undertaken by different government and also by the external economic shocks (like the oil crisis). Thats way the development of financial instruments to enable market participants to hedge against these risks was an unescapable necessity. These enstruments are generally known as financial derivatives and used for risk management obtaining finance and lower costs and/or receiving higher financial returns on inwestment. Financial forward, future, option and swap contracts are the four major instruments utilised in this respect. The Turkish tax law and general law system doesn't provide a detailed regulation for financial derivative securities. Though these instruments are well known in terms of their economic functions in the relevant literature in Turkish this not the case for the legal field in Turkey. Thus this study attempts yo investigate the derivatives reparding their legal aspects particularly in the connext of taxation within Turkish tax law and general law system. Turkish code of obligations provides the freedom of being a party of any contract there fore it can be suggested that there is also no legal limitation for derivative contracts. İn this respect the general provisions of the Code of obligations and commercial code can also be applicable on these types of contracts in addition some provisions of this legislation for foreign Exchange banking and capital markets caan be deemed within the scope of relevant regulation. Forward and future contracts are the similar to sales contracts and there fore both parties obliged to fulfill their respective obligations to the other party. A swap contract is a mixed contract and resembles barter or loan agrrements.