Abstract:

Abstract enIn Turkey, publicly traded companies, which operate under the Law of Capital Markets, have been distributing advance dividends since 2001. With the introduction of the new Turkish Commercial Code, this right was also granted to corporations. In this respect, Ministry of Customs and Trade have become the authority to introduce new legislation. The Ministry published “The Notification of the Distribution of Advance Dividend” in the Official Gazette No 28379 dated 9.8.2012. In this notification, the decision of the general assembly of the company and the existence of the relevant interim profit are necessary for the distribution of the advance dividend. There are three tax-related issues in the distribution of the advance dividend. Firstly, there is an income tax cut, which is 15%. Secondly, there are concealed gains through transfer pricing. Thirdly, there is a refund of the tax cuts made by the recalled dividend advance. In this study, some mistakes and their reasons are presented in initial accounting transactions related to advance dividends. Moreover, alternative suggestions are shown. There are three main sections in the study. Firstly, the concept of the advance dividend and relevant legislation and tax issues are explained. Secondly, the principles of the calculation of the advance dividend are described. Thirdly, there is an example related to the above-mentioned sections. This includes a specific case and accounting transactions.

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