Taxation of corporate groups in comparative perspective and solutions for Turkish tax system

The group of companies provides high efficiency and advantages in the management of large-scale businesses and international economic activities. In this recpect, this business concentration type is highly preferred for many enterprises. Corporate groups consist of legally separate but economically controlled and dependent companies. The dual characteristic of the corporate groups challenging the classical legal systems based on the seperate entity approach. Every country has been struggling to find efficient solutions for the problems derived from the group structure. In this compelling context, the solution is a new approach which is suitable for the economic character of the group of companies by leaving the existing legal rules around the legal entity. The complex and multi-layered structure of groups of companies is makes it difficult to correctly determine their ability to pay tax. The taxation of profits derived from large and mostly international commercial activities carried out under the umbrella of a group of companies is a problem that classical tax law rules are insufficient to respond. Determining the content of corporate group taxation rules is an actual issue that lawmakers should solve by taking into account international cooperation and harmony. The base erosion and profit shifting practises has become widespread in the internationalized and digitalized economy. Therefore, the taxation problems of corporate groups are no longer negligible. In this study, corporate group taxation rules around the world are examined in detail. It has been concluded that adopting a applicable corporate group taxation model for Turkey would be appropriate for both tax administration and companies.