Hybrid mismatch arrangements in tax law

The use of tax avoidance strategies is on the rise globally as a result of the dynamic nature of taxpayers' business and transactions and their inclusion as participants in a world economy that is increasingly interconnected. Hybrid mismatch arrangements are one of the issues mentioned in the BEPS Project, which was created by the OECD and the G20 and outlines the countermeasures that countries can implement. Aggressive tax planning is exemplified by hybrid mismatch arrangements which represent the effort to reach double non-taxation by taking advantage of differences between relevant legislations of countries about business types and financial sources of the corporations. Due to this strategy, the tax bases of countries are significantly eroded by multinational corporations, which has a negative impact on both competition and taxation principles like ability to pay, fairness, and equality. With the BEPS Action 2, twelve rule recommendations were made against hybrid mismatch arrangements in an effort to prevent these consequences, and it is now evident that countries are inclined to evolve their legal systems in this manner. The idea of hybrid non-compliance legislation appears to constitute a concern for Turkey as well, especially in light of its rising economy and capital market. In this regard, it is crucial to look at the OECD's recommendations. From this point of view, in this thesis, the twelve recommedations provided out by the OECD and the forms of hybrid mismatches described by naming within these recommendations are explored along with the conceptual framework of hybrid mismatch arrangements and its background. Based on this review, this thesis bases its evaluation of the effectiveness of the current rules in Turkish tax law against hybrid mismatch arrangements, identifying areas where there are rule gaps and formulating policy recommendations for the growth of the law based on these areas.