In value added tax allowance mechanism

Value Added Tax (VAT) is currently accepted as the most contemporary taxation system in the world. The most important properties of VAT is that it contains an allowance mechanism.In this our work, it was considered process of reduction mechanizm that is most important component of Turkish Value Tax and problems of being the cause of that process. It was mentioned in attraction in the wold and, shortly considered historical process in puting in the practise in turkey The special subjects in Turkis Value Tax werw pointed out one by one in order to be assistant for being understood the callege. Then the process in Turkey of reduction practise was considered broadly.On the other handA, allowance mechanism should be well performing in order to obtain the expected functions of VAT. Otherwise, there occur some significant problems in the fiscal area. Some undesirable effects, like double taxation or illegal tax allowance, might evoke the unfair competition. In such a case, not only the main aim of the taxation is diverged, but also the principles of the taxation are damaged.For these reasons, the problems derived from the regulations and resolutions are elaborately examined considering the antecedents and outcomes of the issue in order to provide the unity in implementation of the allowance. Based on this review, some reasonable solutions are revealed by considering the tax regulations, VAT theory, decisions of the fiscal authority and sentences.