In the Turkish legal system, the associations can engage in commercial enterprise activities in order to obtain the financing that they need for reaching the targets stated by their charters. But such commercial activities also introduce some legal obligations. Here, one should underline that associations that own enterprises are considered merchants and assessed as merchants in terms of bookkeeping.
If commercial books are not kept according to the principles & procedures required by the Law, those not fulfilling their obligations may face legal and penal sanctions. The Turkish Commercial Law envisages administrative and judicial monetary fines for irregularities and if such irregularities are assessed as crimes like fraud, misinformation about companies/cooperative societies etcetera, then sanctions within the scope of Turkish Criminal Law will come into question. And as per the Tax Procedure Law, associations that incorporate economic enterprises are subject to corporate tax for the income they obtain over such enterprises.
The said obligations of associations, which have become taxpayers as a result, should be fulfilled by the legal representatives of such associations. The verdicts by the Supreme Court of Appeals frequently show that if public receivables cannot be collected from the artificial personality of the association, then Members of the Board of Directors, who are considered to have neglected their obligations, will bear responsibility. In addition, irregularities related to tax obligations are punished with imprisonment both by the Tax Procedure Law and the Penal Law.
Comments