T.C.
Council
4. Department

Principal No: 2013/1150
Decision No: 2013/9562
Decision Date: 9.12.2013

Summary: it is necessary to acknowledge that the amount reached when the base is calculated on the basis of the sector’s profitability ratio in construction and contracting works reflects the taxable income of the enterprise and that all expenses incurred during the construction of the business are taken into account in this way.

Appellant: … Directorate Of The Tax Office
Counterparty: … Forestry Electric Construction Contracting Industry Trade
Company Limited
Istemin_ specification: in 2004, a lawsuit was filed on behalf of the plaintiff company with the request to abolish the corporate tax and the tax loss penalty for 2004 on the basis of the determination that the cost of the work completed by committing to the official institutions could not be determined due to invoices that do not reflect the fact that In accordance with the decision of the Council of state to dissolve, Sivas Tax Court dated 18/10/2012 and E:2012/348, K:2012/339 by numbered decision; since it is determined that the 20% pure profitability ratio accepted for construction contracting works is misleading in terms of the content of some expense documents of the claimant company, the inflation difference expense and financing expenses that are not subject to criticism by the reviewer should also be taken into account in the calculation of the tax base by applying a 20% pure profitability ratio based on the, accordingly, it was decided by the courts to dismiss the related part of the case on the grounds that there was no illegality in the tax and penalty imposed on the base reached as a result of the inclusion of these expenses in the calculation, and to abolish the assessment and penalty related to the excess. The respondent administration requests that the acceptance portion of the decision be overturned by claiming that the consideration of the inflation difference expense and financing expenses declared by the plaintiff in the relevant year in determining the basis is contrary to the settled case law of the Council of state.
Summary of defense: no defense was given.
Examination Judge Melek Karali Saunders ‘ opinion: as the issues put forward in the appeal petition do not have the nature to overturn the court decision subject to appeal, it is thought that the appeal request should be rejected.

ON BEHALF OF THE TURKISH NATION
The fourth Office of the Council of State, which has ruled, has been discussed as a matter of necessity.:
In 2004, a paste, a fake invoice with belgelendirdig officially released plaintiff alleged on behalf of the company to corporate tax and penalty tax to demand the abolition of the filed of waste, partly agree, partly related to the adoption of the portion of the Tax Court decision of denial was appealed.
The 13th article of corporate tax law No. 5422 on corporate tax, Article 1, written in the taxpayers gross income obtained during an accounting period is to be calculated on gross income in the determination of income tax shall apply the provisions of the act regarding financial gain has decreed that, and in Article 2 of income tax law 193 have been given to the principle that real income will be taxed.
According to the Income Statement attached to the corporate tax return in 2004, the plaintiff company’s net sales were 81,173, 79 TL and reflected in its records and declarations in the same year…. machinery, … oil, … construction materials, … consultancy., … Since it is accepted that 20% of the proceeds from construction and contracting works, in which the actual expenses and costs are not determined in accordance with the decisions of the Resident Council of State, are pure profit, the corporate tax amount to be paid is 1,638. 96 as a result of the deduction of TL 3,718. 50 of the net sales amount paid in the prior period over TL 16,324. 75,which; In the decision made in accordance with the court of State annulment decision, it is understood that the Tax Court decided to remove the portion of the assessment and the penalty exceeding this amount by reducing the tax base of TL 16,324.75 calculated on the pure profit by the reviewer,as well as the inflation difference expense of TL 1,848. 52 declared by the plaintiff and the financing expense of TL 3,838. 31
In the case of a lawsuit where it is necessary to determine the period basis by acknowledging that 20% of the sales revenue made up of the claims is pure profit according to the established Council of State case law, it is necessary to acknowledge that all expenses incurred by the plaintiff during the execution of the work are taken into account. Therefore, in the case of calculating the base with the said method, it is not possible for the expenses declared by the plaintiff to be included in the calculation of the base.
Accordingly, the Tax Court decision on the removal of the excess portion of the tax and penalty hit on the tax base calculated by taking into account the inflation difference and financing expenses of the plaintiff was not in compliance with the law.
For the reasons described, the acceptance of the appeal request was decided by the Sivas Tax Court on 18/10/2012. E:2012/348, K:2012/339 on the day of 09.12.2013, it was decided by a majority to dissolve the adoption portion of the numbered resolution.

VOTE AGAINST
Since the cost of the work completed by committing to the official institutions in 2004 could not be determined due to invoices that do not reflect the fact that they have been transferred to the records, in the case filed on behalf of the claimant company with the request to abolish the corporate tax and tax loss penalty for 2004 on the basis determined by accepting 20% of the, the decision of the Tax Court to remove the excess portion of the tax and penalty on the base calculated by taking into account inflation difference expenses and financing expenses was appealed.
In paragraph 4 of Article 49 of the Administrative Procedure Law No. 2577, it is stipulated that the courts may insist on the old decision by not complying with the annulment; that if the decision of the insistence is appealed by the relevant party, the decision of the Council of State will be examined by the Council of State Administrative or Tax Litigation Departments according to the subject of the case; that if the decision of the
In the file examined, the plaintiff the Tax Court as an expense recorded in the records of the company bills shipping and regulate mining machinery industry and Trade Company Limited is a publishing, company limited, oil and oil products, construction materials, Textile Industry Limited Company, Oil Products Company Limited … and Consulting Services, Construction, Transportation, cleaning, food technique limited company held about tax reports, organizing your bills is counterfeit since it has been determined that the invoice amount to bet in the case the assessment was made when it became clear the company’s costs by removing the company from the invoice released by the rejection of cuts in the VAT value-added tax with penalty, to demand the abolition of the tax loss opened, and of the courts E:2007/458 seen in the file numbered with the assessment made in the case of the Bills were fake reached the conclusion that, however, in terms of corporate income tax for the same reason, the assessment can be made before moreover,, in the case of dispute, it was decided to accept the case on the grounds that there was no compliance with the law in the corporate tax and tax loss penalty issued by removing these invoices from expense records, since it was determined by opposing investigations that the invoices were false without such determination by the defendant administration; as a result of the appeal review of this decision, 2009/8237, K. The decision of the Tax Court on the grounds that the corporate tax and the tax loss penalty issued on the basis of the 20% pure profit rate accepted for construction contracting works in the decisions of the Resident Council of State is in accordance with the procedure and law, since it is understood that some of the bills recorded in the books as commodity purchases in the
Although the decision to partially accept the case according to the basis found by taking into account the inflation difference and financing expenses was decided by the Tax Court in the decision examined by the appeal, the decision to be made in accordance with the law of the corporate tax and the tax loss penalty issued by the re’sen in the decision to, the decision made by taking into account the inflation difference expense and financing expenses is in the nature of insisting on action in the former decision.
In this respect, I disagree with the majority decision in the opinion that the appellate review should be conducted by the Board of tax litigation offices in accordance with the provision of Article 49 of the above mentioned Code of Administrative Procedure No. 2577.