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TAX LAW
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Rescission of Time Limitation in Investment Allowance by
the Constitutional Court
*
Investment allowance is enacted as an incentive of abatement of the
40% income tax which is earned by the depreciable economic funds which
are bought or manufactured to be used in operations by tax payers whose
agricultural or commercial earnings are detected on balance sheet basis.
But this tax rebate was repealed, beginning from 01 January 2006 by the
Law No.5479.
It qualified for the investment allowance for income generated in
2006, 2007 and 2008 under Temporary Article No.69 which was added
to the Revenue Code for tax payers who made invested but could not
benefit from the tax rebate because of the abrogation, as of 01.01.2006, of
provisions in Revenue Code concerning tax rebate.
The limitation on the investment allowance to three years meant
revoking the anticipated rights of the tax payers, who were making financial
feasibilities of their investments relying on the investment allowance
because of the late return on their large scale investments and the fact that
they did not earn any profit even until 2008.
This situation was against the “Rule of Law” and also “Certainty
and Predictability of the Law”, “Respect for the Acquired Rights” with
the “Non-retroactivity of the Law”. The new legal arrangement was also
contrary to “Equality before the Law” and “Tax Justice”.
The abovementioned provision, which provides for a transition
period because of abrogation of investment allowance, was subject to a
constitutional objection as consequence of its character revoking the
anticipated rights of tax payers and cancellation of Art. 3 of Law no. 5479
and the phrase “only for years 2006, 2007, 2008…” added to Art. 69 of
Revenue Code no. 193 was requested. The Constitutional Court, decided
to revoke the clause on October 15, 2009 with case no.2006/95 and to
entry into force of decision through its publication on the Official Gazette.
Consequently, the time limitation for investment allowance is no longer in
force.
Even though the decision of cancellation referred to the earlier
situation, new difficulties about tax calculations arose with the decision.
*
Mart 2010 tarihli Makale