Murat Demir has been promoted to Regional Partner and Dogus Gulpinar to Partner at Nazali Tax & Legal in Turkey and Ukraine, respectively.
On December 15, 2020 CEELM gathered legal experts from across the region for its annual Year-in-Review Round Table conversation. In a wide-ranging discussion, participants shared opinions and perspectives on their markets, on strong (and less-strong) practices across the region, and the effect of the COVID-19 crisis on both, as well as on how technology is changing the legal industry, and what the industry will look like in 2021.
In 2015 the Organization for Economic Cooperation and Development created 15 base erosion and profit shifting (BEPS) action plans to equip governments to address tax avoidance by means of domestic and international rules and instruments. The purpose of the action plans is to ensure that profits are taxed where economic activities generating the profits are performed and where value is created.
COVID-19 has swiftly become a global outbreak, affecting not only people’s lives but also the global economic conjuncture. Like most countries, the Republic of Turkey, has adopted several measures to eliminate or lessen impacts of COVID-19 on the economy. With this article, we will provide an overview of the Turkish legal market and key legislation enacted during the COVID-19 outbreak.
In Turkey, a local and centralized commercial electronic communication management system (IYS) for obtaining, exercising, and tracking opt-in/opt-out requests as well as complaints from recipients of electronic commercial communications was established under the supervision of the Ministry of Trade, the competent authority, in line with recent amendments to the Regulation on Commercial Communication and Commercial Electronic Messages. Also, a company has been incorporated solely for the establishment and management of IYS on behalf of the institution authorized by the Ministry (IYSCo).
Antitrust authorities follow closely the transformation in communication technologies with the intent to preserve the efficiency of their investigative practices and evidence search, during handling their cases. Otherwise the authorities will be on the verge of losing their operability in detecting and proving infringements. A fresh amendment on Turkish Competition Act clarifies Turkish Competition Authority’s (TCA) powers associated with down-raid regarding digital documents. In this brief article, we authored TCA’s recent Burdur LPG Case, TCA imposed fine on LPG retailers of the city of Burdur, based on the evidence extracted from WhatsApp communication between executives of the undertakings.
The long-lasting bill of Law on The Act on the Protection of Competition (The Competition Act) was ratified by Turkish Parliement on 06.16.2020. This amendment is the most extensive reform of antitrust enforcement system since the enactment of the Competition Act in 1994. The most significant changes are explained below:
Fintech is described by the Financial Stability Board (FSB) as “technology-enabled innovation in financial services that could result in new business models, applications, processes or products with an associated material effect on the provision of financial services”. Fintech companies of all sort, have so far triggered a remarkable transformation in the provision of financial services. The impacts of this ongoing transformation on market structure is inevitable, as these companies are growing as new market players.
The coronavirus pandemic has produced material effects on economy and triggered a global economic crisis leading to major changes in commercial activities. Significant part of the world population has largely changed their spending habits that almost stopped the functioning of multiple industries while demand for several others such as health equipment, food products and cleaning materials upsurged. Towering demand for these products caught companies unprepared and led to a supply crisis.
Turkish Competition Authority (TCA) revoked the individual exemption granted in 2016 to BKM Express, the joint digital wallet service of 13 leading banks, operated by The Interbank Card Center (BKM). TCA also mandated the termination of this activity in 60 days after declaration of reasoned decision. This is a landmark antitrust intervention of Turkish antitrust watchdog, addressing the rising competition concerns in the newly emerging fintech markets in order to ensure a competitive market structure and pave the way for innovative fintech startups to enter the market and operate effectively.
Commitment is a procedural innovation and a way of settlement in competition law where undertakings under investigation, propose a set of behaviors (or structural remedies) addressing the competition concerns raised by antitrust authority. In return, the authority terminates the ongoing investigation in early stages and makes the proposed commitments binding on the undertaking, provided that the commitments are satisfactory in resolving the competition concerns in that specific case. Undertakings are not forced to acknowledge the violation and the undergoing probe is closed with no fine within this mechanism. Both parties, the Authority and the undertakings gain significant procedural efficiency in total.
The way people communicate is constantly under transformation following technological advances. Business communication is not away from this trend as cutting edge-technologies provide instant communication tools that brings efficiency and convenience in daily communication of employees. Not surprisingly, legal authorities in general and antitrust authorities in particular, are also keeping tabs on this transformation in order to preserve the efficiency of their investigative practices and evidence search during handling their cases.
“The Turkish Government acted well and used the experience of other countries to fight the battle with COVID-19,” says Ersin Nazali, Managing Partner of Nazali Tax & Legal in Istanbul. “The situation was well prepared-for, which ultimately led to a lower number of infected people. Soon, we expect to get back to normal life.”
The economic and social impacts of the new coronavirus ("COVID 19"), which emerged in Wuhan-China in December/2019, occur at an unprecedented level comparing to crises experienced before. Within this scope, as a precaution for prevent the spread of the COVID-19 pandemic in Turkey, the time limits in legal proceedings are suspended until April 30, 2020. The General Assembly of the Grand National Assembly of Turkey (“TBMM”) enacted this measure through the Amendments to Certain Laws (“Law No. 7226“) on March 25, 2020. Also on April 30, 2020 the President of the Turkish Republic issued the “The Degree to Extend the Suspension Period to Prevent the Loss of Legal Rights” (“Decree”) and under the Decree, the suspension of time limits in legal proceedings has been extended again from April 30, 2020 to June 15, 2020.
The economic impacts of the new coronavirus ("COVID-19") occur at an unprecedented level comparing to the crises experienced before. For many industries, both the supply chain has been interrupted and customer demand has shrunk at the same time. Restructurings and changes in transfer pricing policies will be inevitable for the continuity of businesses and activities since COVID 19 crisis has caused an unforeseen global risk realization which could not be predicted at the time when the intra-group contractual relationships were established and the group operation model was designed. Although the existence of conditions that require the need for policy changes is often considered as negative, it can also be turned into an opportunity by the multinational enterprises.
The new coronavirus (“COVID-19”), which emerged in the city of Wuhan, China in December 2019 and spread around the world in a short time with the contribution of interdependence between countries, continues to have significant effects in many areas of life. One of these areas is international tax law, and potential disputes should be expected in the near future regarding taxation rights, which are demarcated by Avoidance of Double Taxation Treaties (“DTT”).