Non-deductable expenses and it?s analysis on taxes on income

The aim of this thesis is, in scope of taxes on income in the Turkish tax law and by analyzing non-deductable expenses in determination of tax base, to identify problems encountered in this area and to propose solutions. The scope of this thesis is limited to non-deductable payments according to income tax and corporation tax. Although this thesis includes examples of non-deductable expenses valid in various countries, that information is restricted in order to get an idea on the compliance of the Turkish tax law with international practices. In this Thesis, non-deductable expenses according to income tax and corporation tax are discussed with all aspects. Tax base, which reflects ability to pay principle fully, depends on the accurate definition of non-deductable expenses. Having a wide definition of this concept in our country, encourages taxpayers to operate in the informal economy who, otherwise, want to pay their fare share of taxes. Adverse effect of this situation on recorded economy could be more than the amount of non-deductable expenses, which are designated not to erode the tax base. In this context, by deciding on the comprehensive definition of general expenses, deductable expenses for income and corporate taxpayers should be expanded and provisions related to non-deductable expenses should be reviewed.