Practice of imputed value in Turkish Tax Law

The concept of imputed value was first introduced into Turkish Tax System in 1930s. Practices linked to the imputed value continued to be found in both adjective law and material law at an increasing intensity from 1930s to the present day. Imputed value is a tax security measure aimed at assessing the monetary values based on the tax base of an economic relations with respect to the market price of that asset. Application of imputed value shall maintain its position and importance as long as the declaration based taxation system continues. Because taxpayer's declarations are compared with the imputed values and tax bases are calculated or corrected accordingly. Through the use of imputed value it is being intervened to the acquiring and disposal value of the economic relations in the name of taxation. İmputed value can be considered as intervention to the freedom of contract and property right in private law. Therefore, it is necessary to implement the measure of imputed value fairly within the framework of objective and concrete criteria. To not impair the right of ownership by using imputed value, it is essential that the legally measured imputed value should grasp the market price and real value. It has been understood from the study that a significant part of the imputed value-based taxation arrangements has been erroneous and imperfect, therefore led some practices injure the rights of both taxpayers and the state. As a result of the study, it has been concluded that the concept and understanding of the existing imputed value in Turkish Tax Law should be redefined in accordance with the current needs and objectives and also implementation change should be made. In this way, the important variables and elements outside the application can be taken under the imputed value practices, resulting in a more just, realistic and objective taxation system.