Turkish tax system and the Financial Reporting Standards of Turkey for the purpose of valuation of securities

As opposed to the Accounting Standards and the Financial Standards of Turkey which aim at the accuracy and verity of the financial tables of businesses, the Tax Procedure Law no. 213, with a perspective endeavouring to prevent tax base erosion, regulates valuation rules that taxpayers have to follow. Businesses intend to generate income and maximise their profits by investing their idle funds in various financial instruments. The measurement of values of financial instruments and the determination of derived incomes as of valuation day are of great importance in terms of both the accuracy and the verity of financial tables. Securities, which are among financial instruments, and the valuation of securities differ under the Tax Procedure Law, the Accounting Standards of Turkey and the Financial Standards of Turkey practices. The Tax Procedure Law defines the valuation rules of securities that have to be followed with a perspective trying to impede tax base erosion without any initiative provided for businesses. The valuation criteria existing under the Accounting Standards of Turkey and the Financial Standards of Turkey, however, allow businesses to reflect their financial conditions most realistically. The implementation differences between the current regulations, i.e., tax laws, the Accounting Standards of Turkey and the Financial Standards of Turkey, the effects of such implementations on financial tables of businesses, and the accounting practices as to the adjustment of such effects are of great significance. In our opinion, we will be able to catch international valuation standarts with harmonisation of legal regulations which suits Tax Procedure Law harmonisation with the Accounting Standards of Turkey and the Financial Standards of Turkey. Moreover; corporations, create their financial reports with reference to international standarts without any transformation of their book of accounts.Thereby, corporations will be able to make financial statement which provide correct, objective, reliable information subsequently this, financial reports can serve main purposes just like scaling and briefing.