The institution of conciliation in the settlement of tax disputes: A case study in Bolu province

Tax is the economic source of income that is received from citizens as gratuitous, legal, and compulsory, according to their financial strength for the financing of public expenditures based on the state's sanction power. The tax dispute is the conflict between administration and the taxpayer. Administrative and judicial remedies are applied to resolve the tax dispute. In the settlement of the tax dispute, applying administrative remedies (error correction, attrition and correction, reduction in penalties, reconciliation, and invitation to explanation) ensures the agreement of the taxpayers and the administration and the parties to trust each other. In the settlement of tax disputes, the reconciliation institution has an important place in administrative solutions. Reconciliation prevents the accumulation of tax dispute files in the courts. Although the state has to give up a part of the tax, the tax is collected more quickly thanks to the reconciliation. Because of these and similar benefits, the presence and implementation of the reconciliation institution are considered important in the states. The reconciliation institution also has been established by law in Turkey, and implementations of this institution has been made so far, and shows its benefits throughout the country. In this study, the implementation of the reconciliation institution, which is one of the key points to solve the tax dispute, has been assessed in Turkey and Bolu basis. As a result of the research, it has been concluded that there has been too many applications to the reconciliation institution, the files applied for reconciliation were largely compromised, there has been established a high level of agreement on the tax amounts subject to settlement, and on the amount of penalties subject to reconciliation, the result was much lower throughout Turkey and Bolu. Accordingly, the administration waives a large part of the tax penalties.