Analysis of tax exemptions and exceptions in Turkish tax system for capital market

Capital markets are of great importance in countries' economic development and growth. To convert domestic savings into investment and, in addition, to attract foreign funds, the development of capital markets and institutions must be encouraged. Taxes, tax exemptions and exceptions in particular, have an important place in incentive mechanisms.In order to attract foreign funds, countries apply tax exemption and exception arrangements nowadays. With the impact of global competition, tax regulations of similar or opponent countries are taken into account when making tax arrangement for capital markets.With this study; tax exemptions and exceptions valid for the capital market institutions and instruments, objectives of these arrangements, historical process and the problems encountered in the application of these arrangements have been discussed and suggestions related to solve these problems have been made.We are in believe that to encourage openness to Public, to syn-chronize tax burden on the public debt securities and private bonds, the tax exemptions and exceptions regulations, which will be covering the new de-veloping capital market instruments and institutions, will lead savers to the capital markets.In addition, law arrangement which will ensure that privilege from dis-tress will be applied without violating to fulfillment of judicial decisions and implementation of property rights would be useful.There is no need to issue a new law to solve the problems related to applicability of property tax exemption for the institutions whose property re-garded as Public Property and might be solved through administrative and judicial methods.It is essential to have laws for application zero tax rate, for the case of whether dividend payment will be made to the audit members who is not shareholder, and for the conditions of tax exemption of real estate investment trust.To solve the current problems related to applications of exemptions and exceptions will develop capital markets and tax payment capacity will increase.