Evaluation of tax security measure covered capital application in terms of Corporate Tax Law No. 5520

Implicit capital occurs when the shareholders lend to the entity the values that they have to put as capital in order to obtain tax benefits. The fact that the borrowing is made from the partners or other related persons, the amount of the debt exceeding the rates mentioned in the law and that the borrowing is absolutely spent for the enterprise constitutes the compulsory elements of the covered capital. The definition of the persons related to Article 12 of the Corporate Tax Law No. 5520 has been dealt with in detail and in a way that does not allow much interpretation. The regulation facilitated the implicit capital institution in favor of the taxpayer; clarified the judicial disputes by eliminating uncertainties. Inthisstudy, the capitalization application is examined in terms of the Corporation Tax Law No. 5520.