Turkey's leading trade, tax and international law academics and business people came together at the opening conference of Başaran Law Firm & Business Consultancy's Istanbul Office. While discussing how companies will survive in times of crisis, the methods of combating the negative effects of high inflation on institutions were evaluated at the conference. Başaran Law Firm & Business Consultancy Founder Prof. Dr. Funda Başaran Yavaşlar stated that companies announced high profits due to inflation, but this also means high taxes. Even with inflation adjustment, it doesn't work. Companies should take precautions against inflation.' said
Başaran Law Firm & Business Consultancy Istanbul Office started its activities with the 'Advice to businesses in times of crisis' conference, where the business and academic worlds come together.
The conference was attended by Prof. Basaran Law Firm & Business Consultancy. Dr. Funda Basaran Yavaşlar, Prof. Dr. Murat Topuz, Prof. Dr. Veliye Yanli, Prof. Dr. Hatice Ozdemir Kocasakal, Prof. Dr. Timur Demirbas Dr. Aytac Ozelci, Dr. Sedef Koç, Erhan Coşkun, Turgut Candan, Ahmet Özgan and many business people attended.
Delivering the opening speech of the conference, Prof. Dr. Funda Başaran Yavaşlar stated that the successive developments such as pandemics, wars, inflation and earthquakes have left businesses facing many problems and weakened their financial structures, and stated that managers should take all kinds of measures to survive in this process. Stating that even if companies can make inflation adjustments, it may not work, Yavaşlar said: “If inflation (PPI) exceeds 3 percent in the last 100 accounting periods and 10 percent in the current year, inflation adjustment should be applied. In 2022, these conditions actually came true. However, just when this was to be implemented, a regulation was issued in 2022 and inflation correction was prevented, he said. The only thing you can do this year is revaluation, you can only adjust for inflation at the end of 2023. On the other hand, even if inflation correction is made, this does not make much sense for our system. Because our inflation correction does not serve to completely remove inflation. It's just a little make up. The revaluation is just a little bit more of a micro dimension. This leads to the taxation of unreal fictitious profits. In fact, you did not make a profit when you adjusted for inflation, but because this is not done, the profits seem high and you pay higher taxes.''
Türkiye is the 7th country where it is most difficult to do business
Expressing that the pressure of the economic crisis on companies is increasing day by day, Prof. Dr. Funda Başaran Yavaşlar stated that the frequent changes in legislation also put pressure on companies. Yavaşlar '' According to the 2022 Global Business Complexity Index prepared by TMF Group based on taxation, Turkey is the seventh most difficult country to do business among 77 countries. As a reason; It is shown that 'the legislation is constantly changing, the time given to taxpayers to adapt to the changes is short, the changes are put into practice with minimum information and guidance'. Whether Turkey deserves the seventh place is a separate issue, but I think that the number of taxpayer companies that will not agree with these criticisms will not be low.
10 tips for businesses in times of crisis
1. The debtor entity may request that the contract be adapted to current conditions, and if this is not possible, its termination.
2. If there is a loss of capital and insolvency, the board of directors should call the general assembly for a meeting to take action.
3. Businesses that are creditors during periods of high inflation may demand compensation for excess losses exceeding the legal default interest (additional) in case their receivables are paid late.
4. When making a contract on international trade, the method of settlement of disputes and the law to be applied to the dispute must be determined in the contract.
5. Employers who are affected by the crisis and cannot continue their business relationship have the opportunity to terminate the business with the requirements of the business.
6. Turkey's graylisting by the International Financial Action Task Force (FATF) for its deficiencies in the fight against money laundering and terrorist financing causes Turkish businesses to be more careful in their foreign currency movements.
7. Businesses can write additional depreciation expense by making use of revaluation applications, take into account the high cost value in the sale of economic assets, reduce the amount of legally unacceptable expense (KKEG) by increasing the amount of equity (equity) taken into account in financing expense restrictions and implicit capital practices, Capital They can provide advantages in Loss and Insolvency calculations, increase their credibility with financial institutions by approximating balance sheets to real value, and contribute to the credibility of their financial capabilities before third parties.
8. While reviewing the intra-group function and risk distribution due to inflation, deviations in the transfer pricing method used should be determined, and the tax administration should be applied for an update.
9. Since the customs value of the goods in the taxes collected at the customs has the importance of the tax base for the domestic taxes, it should be determined and declared correctly. Otherwise, it may be inevitable that the importer will be deprived of the opportunity to reflect and encounter an additional financial burden and sanction.”
10. Enterprises that have an "investment place allocation" support element in their investment incentive certificates will thus have the opportunity to reduce their costs, increase their profitability, and reduce possible risks in terms of investment if their financial resources are insufficient.