The effect of peaceful resolution of tax disputes on tax compliance in Turkey

The vital importance of taxes in public revenues necessitates an effective tax system. In order to be able to talk about an effective tax system, tax disputes should be resolved as soon as possible and tax receivables should be transferred to the treasury. Since judicial remedies cause additional costs such as time and material costs, various solutions other than judicial remedies are sought by almost every country that wants to obtain maximum benefit from the tax system. One of these solutions is peaceful settlements. Although the names and methods of peaceful remedies vary from country to country, it is seen that they serve the same purpose. The ultimate goal of peaceful remedies is to achieve tax harmonisation. Accordingly, in Turkey, as in other countries, many methods are used to resolve tax disputes. These methods include correction of tax errors, regret and amendment, reconciliation, reduction in penalties, invitation for explanation, waiver of legal remedies, restructuring of public receivables and tax amnesties. The common feature of these practices is that they end disputes peacefully and ensure tax compliance. The purpose of this study is to examine the impact of peaceful settlements on tax compliance in Turkey. Since there are no restrictions on the use of peaceful settlements, taxpayers may see peaceful settlements as an opportunity for tax compliance or as a means of abuse. The study seeks answers to these and similar questions, such as whether peaceful resolution of tax disputes increases tax compliance or encourages non-compliance. In this context, the survey data obtained from 398 accounting professionals in Istanbul were analysed by exploratory factor analysis and multivariate statistical tests. As a result of the study, it is seen that taxpayers have a positive perspective on peaceful means and peaceful means are effective in ensuring tax compliance. Although peaceful means have negative effects according to the principle of equality and justice, it is concluded that these practices are necessary to ensure tax compliance until a certain tax morality and tax awareness is formed in the society and it is not sufficient to expect taxpayers to fulfil their tax obligations in order to ensure tax compliance. Therefore, it is concluded that some facilities should be provided and some dispute resolution mechanisms should be established to encourage taxpayers to pay taxes. Keywords: Tax Compliance, Tax Disputes, Peaceful Settlements, Tax Peace.