Analaysis of transition from financial profit to commercial profit in terms of tax laws and accounting practices: Sample practices

In the Turkish Tax System, the accounting records made by the enterprises in accordance with the general practices of accounting at the end of the period is commercial profit. Tax base (financial profit) is accounted by making some additions and subtractions to commercial profit. In other words, financial profit is calculated as a result of adding expenses which are deducted by tax payers but not accepted by tax laws, and removing income items that are exempt from tax or which are not subject to the subject of tax. Economic reflections of such additions and removals are shown in off-balance sheet accounts and necessary adjustments are made at the end of period for corporate taxpayers on corporate tax return and for income taxpayers holding balance sheet method by using "notification" that is stated in the appendix of General Practice of Accounting No.4. In this study, it has been tried to reveal method of calculating financial profit from commercial profit for the corporate taxpayers and the income taxpayers who keep the balance sheet method of accounting from the perspective of tax laws and accounting practices as a whole. In this context, firstly, commercial profit and financial profit concepts are discussed theoretically and then related legislation is given, the issues that cause commercial profit-financial profit differences such as non-tax-deductible expenses, exceptions are emphasized. Each of these issues, together with sub-headings, is handled separately by case study, legislative disclosure and accounting record respectively according to corporate tax return logic. Afterwards, the topics which are described in a piece-by-piece manner are presented in harmony with the sample applications and the declarations are arranged. In addition, our solution suggestions regarding the difficulties encountered in the transition from commercial profit to financial profit are given in the conclusion section of the thesis.