Foreign trade and accounting in free zones

Our country encountered the free zones regime with the Free Zones Law No 3218 which came into effect in 1985. The Free Zones applications which is a result of the economical opening to the external world commencing after 1980 is an important economic and foreign trade tool. With respect to the operational results obtained from 1985 up to the present day, we can comment that the Free Zones have attained to the goals of their establishment. Notwithstanding some criticism, our free zone policy which can be evaluated as a successful policy has undergone a considerable change with the issuance of Law No 5084 ?Encouragement of investments and employment and amendment of certain acts? published on 06.02.2004. The Free Zones have been excluded from being tax free areas. The implementation of the tax regulation of free zones is a considerably important change. Although no change of any significance has been encountered in the volume of trade in the free zones with the abolishment of tax exemptions, the investment demand to these areas has decreased considerably. With the commencement of the application of tax liability in the Free Zones, the book keeping and documentation system, accounting and inspection of the transactions relevant to the companies operating in the free zones areas has acquired much more importance. In the free zones, uniform accounting plan is being implemented. There seems to be no difficulty with regards to the uniform accounting system. The provisions of the Tax Procedure Law is also valid fort he book keeping and documentation system of the Free Zones. The inspection mechanism applicable fort he companies outside the free zones is also valid fort he Free Zones. Furthermore, The General Management of Free Zones has authority relevant to inspection. Free Zones are quite important for our country and their regime must be protected. As our country is in the process of full membership of the EU, it shall be a mistake to expect the free zones to be completely tax free areas with regard to harmonization with the European Union applications. However, we believe that the reconsideration of the last tax arrangement shall prove to be beneficial. A Free Zone policy which shall be over political considerations, consistent with the realities of our Country and aiming at its goals must be determined with the participation of all the relevant parties to the Free Zones regime.